ICSID awards $17.3 million to oil companies in NAFTA challenge

Exxon - MurphyThe Council of Canadians first spoke against a North American Free Trade Agreement (NAFTA) investor-state challenge by Texas-based Exxon Mobil Corp. and Louisiana-based Murphy Oil Corporation in September 2007. In a joint media release with the Communications, Energy and Paperworkers Union (now Unifor), we stated this challenge was an attack on Canadian sovereignty.

The two corporations sued Canada that year for $50 million because the Canada-Newfoundland Offshore Petroleum Board had established a rule in 2004 that required them to spend some of their profits from offshore drilling in the nearby Hibernia and Terra Nova oil fields on research in development in the province. In June 2012, a NAFTA arbitration panel ruled this was a "performance requirement" prohibited under Article 1106 of NAFTA, but did not settle on a monetary award at that time.

Yesterday, the Canadian Press reported, "An international tribunal [at the the International Centre for Settlement of Investment Disputes or ICSID] has ordered the government of Canada to pay more than $17 million in damages to two oil companies following a breach of NAFTA regulations. A spokeswoman for Natural Resources Canada says in an email the Feb. 20 decision awarded $13.9 million plus interest to ExxonMobil and $3.4 million plus interest to Murphy Oil." A CBC report adds, "Unless the governments of Canada and Newfoundland and Labrador agree to change the R&D legislation, Ottawa could be on the hook for continued damages."

The Council of Canadians disagreed with the 2012 NAFTA panel ruling and now with the $17.3 million awarded to these two US corporations.

In June 2012, St. John's-based Council of Canadians activist Ken Kavanagh stated, "This case really, in the bigger picture, has to do with free trade and, in particular, some of these up-and-coming deals like the proposed agreement with the European Union, so it was an opportunity for us to point out the failures and the shortcomings of some of these trade agreements." In July 2012, we asked then-Newfoundland and Labrador premier Kathy Dunderdale to request a judicial review of the decision and to oppose the investor-state provision in NAFTA and other so-called 'free trade' agreements.

The Council of Canadians also encountered Murphy Oil in September 2011. It was at that time that the US-based company partnered with a Calgary-based company to frack for oil and gas on the Kainai Nation (also known as the Blood Reserve) in southern Alberta. The Council of Canadians Lethbridge chapter partnered with Kainai Earth Watch to host educational workshops, organize petitions, and meet with government officials to stop the fracking. Three women were arrested that month for blocking Murphy Oil trucks on the reserve, including University of Lethbridge lecturer Lois Frank, who is now a member of the Council of Canadians Board of Directors.

For more about our ongoing campaigns against corporate 'free trade' deals, please click here.

Photo: An ICSID ruling requires a payment of $17 million to these two corporations.