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Barlow responds to Globe and Mail columnist’s support for TransCanada’s NAFTA challenge

Maude and McKenna

Barlow responds to McKenna’s pro-NAFTA column

Council of Canadians chairperson Maude Barlow has challenged Globe and Mail columnist Barrie McKenna’s support for the TransCanada NAFTA challenge against US President Barack Obama’s rejection of the Keystone XL pipeline.

On Jan. 6, 2016, Calgary-based TransCanada Corp. filed a US$15 billion North American Free Trade Agreement (NAFTA) Chapter 11 investor-state dispute settlement (ISDS) challenge against the United States over US President Barack Obama’s rejection of the company’s proposed 830,000 barrel per day Keystone XL tar sands pipeline. While TransCanada had spent $2.4 billion on the pipeline, which was slated to ultimately cost $8 billion to build, the company says, “The preliminary damages figure [of $15 billion] for the NAFTA claim takes into account the lost value of these investments, as well as the lost economic return.”

In his column, McKenna wrote, “It took barely a nanosecond for anti-trade activists to decry what they say is the real meaning of TransCanada Corp.’s multibillion-dollar Keystone XL pipeline lawsuit. …The Council of Canadians quickly [complained] that trade agreements enable companies such as TransCanada to thwart the democratic will of Americans to manage their environment and economy. Wrong. If there is a lesson in the Keystone saga, it is that Canadians should be thankful that NAFTA, the Canada-EU free-trade deal [CETA] and the TPP [Trans-Pacific Partnership] give companies a tool to fight mistreatment at the hands of other governments.”

In a letter to the editor published today, Barlow responds, “Barrie McKenna’s column on TransCanada’s NAFTA lawsuit questions the Council of Canadians’ opposition to provisions in trade agreements that let foreign corporations challenge government policy for lost profits. TransCanada’s fight is a battle against an unjust U.S. government, he insists, where the real victims are investors stymied by arbitrary foreign governments. But the track record of these provisions, known as investor-state dispute settlements (ISDS), shows otherwise. Canada is among the most sued developed countries, facing claims for billions of dollars by corporate behemoths. In every case, the policies challenged are those that protect the environment, labour laws or human rights. …If TransCanada wins, the loser is our shared democracy and the right of governments to practise it.”

In his column, McKenna had also argued, “What these [ISDS] clauses do is give foreign investors access to an independent arbitration process when they believe they’ve been treated worse than domestic investors, or when their investments have been expropriated without fair compensation.” But while McKenna praises the “independent arbitration process”, he does not explain, as Barlow has previously highlighted, why transnational corporations need a special system outside established court systems, nor acknowledge that investor-state tribunals are not judicially independent, that the judges are paid per case, and in that only investors can bring forward cases there is a strong incentive for judges to side with them to generate more case and more income for themselves.

There can be no doubt that the Keystone XL pipeline would have made the problem of carbon pollution worse, a key test for the pipeline that President Obama noted in 2013. A 2014 study published in Nature Climate Change suggests the carbon dioxide emissions from the pipeline would have been about 110 million tons per year. US Secretary of State John Kerry stated that the “critical factor” in his determination to reject Keystone XL was climate change.

The Council of Canadians campaigned against NAFTA in the early 1990s and called for the deal’s abrogation after it came into effect in 1994. We believe that the decision of a democratically-elected government should not be subject to punitive damages in a secretive tribunal process by a transnational corporation that seeks to profit from the transport of a dirty fossil fuel that science says must remain in the ground to avert climate chaos. We have also argued that there should be a provision in UN climate agreements – such as the COP21 climate accord reached in Dec. 2015 – that would shield governments from ISDS challenges when taking action, such as rejecting a pipeline, to limit climate change.

To read Barlow’s letter to the editor, please click here.

Further reading
TransCanada launches US$15 billion NAFTA challenge over rejection of Keystone XL pipeline (Jan. 6, 2016)
Keystone XL: TransCanada’s embarrassing NAFTA lawsuit just the beginning (Jan. 7, 2016)
Globe and Mail columnist says Council of Canadians wrong on TransCanada NAFTA challenge (Jan. 9, 2016)