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Premier Clark must block China investment pact with injunction if necessary: Council of Canadians

Vancouver – B.C. Premier Christy Clark must demand more time from the Harper government to assess the impacts of the Canada-China Foreign Investment Protection and Promotion Agreement (FIPA) on the province’s constitutional responsibility for natural resources, conservation, environmental protection and labour rights, says the Council of Canadians. If this request is refused, the B.C. government has a responsibility to protect its constitutional authority by filing an immediate injunction against the expected November 1 FIPA ratification so that an impact assessment and public debate can take place.

“The province cannot let Harper give Chinese companies, state-owned or otherwise, a 31-year trump card on decisions related to pipelines, oil, gas and mining projects. This is exactly what the Canada-China investment treaty will do by giving foreign investors excessive rights to profit and the ability to challenge public policy in closed-door tribunals shielded from Canadian law and the courts,” says Maude Barlow, national chairperson of the Council of Canadians, who is on tour in B.C. this month to build community solidarity and support in the growing fights to stop pipeline expansions.

“Given the enormously important decisions B.C. will be asked to make about its energy future, and its constitutional authority over natural resources, Premier Clark has a responsibility to fully study the effect the China investment pact will have on its ability to say no to damaging or unpopular projects, or to strictly enforce labour and environmental standards on those projects,” said Barlow.

There are procedural reasons why Premier Clark should demand an injunction, writes Gus Van Harten, an expert in investment treaties, in a letter to Premier Clark, published in The Tyee this week, which also calls for an immediate halt to the FIPA ratification. 

According to a 1998 B.C. government report on the Multilateral Agreement on Investment (MAI), “Under the Canadian constitution, the federal government is incapable of unilaterally implementing international treaty obligations in areas that fall within provincial jurisdiction. Nor is it acceptable for the federal government to use its treaty-making powers to do an end run around the federal-provincial division of powers or in a way that diminishes Canadian federalism and democracy.”

“It’s as if Prime Minister Harper is purposely trying to duck these fundamental constitutional issues and to avoid any real debate or discussion on the China investment treaty,” says Stuart Trew, trade campaigner with the Council of Canadians. “Ask Harper or his ministers any difficult question about the FIPA and they just answer that the business community likes the deal so all is well. Well I’m sorry, but all is not well. The MAI was defeated for a reason. These treaties, including NAFTA and Canada’s many other investment pacts that give foreign investors super-legal rights, endanger our very basic notions of democracy.”

The Canada-China FIPA would leave Canada vulnerable to corporate disputes involving projects where there is any degree of Chinese investment. Any denial to run a pipeline through B.C., for example, could result in claims that a Chinese firm had been denied national treatment and most-favoured nation treatment guarantees, or fair and equitable treatment. These protections may sound reasonable but private arbitration panels are interpreting them far too broadly, such that a country can be fined hundreds of millions of dollars for otherwise legal changes to project approvals or environmental rules. In the most recent such case, Ecuador has been fined $1.8 billion for cancelling an energy contract with U.S.-based Occidental when it broke the terms of its lease by transferring a 40 per cent stake in the project to Encana without government approval.

Last year, the Australian government, faced with the threat of investor-state challenges to public health measures for cigarettes (plain packaging laws) and environmental regulations on coal-fired plants, decided it would no longer negotiate protections like the ones in the China-Canada deal into its own trade deals. The Council of Canadians is urging the federal government to also discontinue the policy of including investor-state dispute settlement in trade deals or standalone treaties like this FIPA with China.