The Lone Pine Resources investor-state challenge is proceeding. In September 2013, oil and gas company Lone Pine Resources filed a $250-million North American Free Trade Agreement (NAFTA) lawsuit against Canada over Quebec’s moratorium on fracking for oil and gas underneath the St. Lawrence River.
Investment Arbitration Reporter now reports, “A tribunal was recently constituted in a case brought by Lone Pine Resources, Inc. under Chapter 11 the NAFTA. Although Lone Pine requested arbitration more than a year ago in relation to the alleged deprivation of rights to explore and develop shale gas deposits under a portion of a major Quebec waterway: the St. Lawrence River. Lone Pine’s arbitration claim was slowed by the restructuring of the financially-struggling company and its Canadian subsidiary. Since then, the arbitration claim has been put back on the fast-track, with the claimant nominating Calgary-based energy lawyer David Haigh, Canada nominating French lawyer and retired academic Brigitte Stern, and the parties agreeing on UK barrister V.V. Veeder to chair the case.”
Lone Pine Resources, which is based in Calgary, is using its incorporation in Delaware to access the investor rights chapter of NAFTA to challenge the Quebec moratorium in front of a paid, largely unaccountable investment tribunal. The company says the Quebec moratorium is “arbitrary” and “capricious,” and that it deprives Lone Pine of its right to profit from fracking for natural gas in Quebec’s Saint Lawrence Valley.
Council of Canadians water campaigner Emma Lui has commented, “It may seem unbelievable that a company’s ‘right’ to frack where, when and how it wants could overpower the government’s responsibility to protect its citizens from harm. It’s equally alarming that investment treaties could obstruct a community’s right to say no to fracking or other mega-projects that tax the land and water for the sake of profit — and not the public good. Unfortunately, the paid and largely unaccountable tribunals that hear NAFTA and other corporate disputes under similar investment treaties frequently side with the companies. It’s why energy and resource firms are increasingly turning to investment arbitration instead of national courts to force governments to either back down or pay them hundreds of millions not to frack, mine or build a pipeline.”
The Toronto Star has previously noted, “The Canadian government faces a $250-million suit from a U.S. energy producer over Quebec’s environmental stance, raising new questions about the wisdom of investor rights treaties Ottawa is planning with China and the European Union.”
In May 2013, the Council of Canadians joined with its allies in Quebec and the United States to call on Lone Pine Resources to drop its threat to pursue this challenge. But the company went ahead and filed its challenge just a few months later. The Council of Canadians will continue to monitor for developments in this case and work to ensure that Lone Pine doesn’t win the right to frack under the St. Lawrence River.