ACTION ALERT: Harper must tear up the Canada-China investment treaty
October 19, 2012
Canadians are fuming about the Canada-China Foreign Investment Protection and Promotion Agreement (FIPPA), tabled quietly by the Harper government at the end of September. Tens of thousands of us have used action alerts like this one to ask Prime Minister Harper to cancel the investment treaty. It is resonating with opposition parties, which are demanding a public debate the government does not want to have. In fact, the FIPPA will become law on November 1 unless we can stop it.
WHAT IS A FIPPA?
The Harper government’s new investment pact with China fundamentally undermines democracy. It will give Chinese firms in Canada and Canadian firms in China 31 years of “protection” – from environmental, human rights or resource conservation measures they don’t like. It gives companies and private investors the right to sue Canada or China in controversial private, unaccountable tribunals outside the court system.
As a net importer of Chinese investment, especially in energy and resources, the treaty will compromise what we can do to better manage mining and energy projects. Globally, mining and oil companies have used their excessive corporate rights in trade and investment treaties to bully or punish governments that don’t give them the project approvals they want.
Even when a project was cancelled or improved because the community demanded it, multinational oil and mining companies have demanded hundreds of millions in compensation. Investment panels have obliged them with ever growing awards paid by governments to corporations. This is of the greatest importance given the need to power down the tarsands and stop proposed pipelines to the west coast.
Demand parliamentary hearings into the Canada-China investment pact!
Phone or send a short email to your Member of Parliament today saying you oppose the Canada-China investment treaty and ask that the issue be debated in the House of Commons. You can use the form below to send a note to all MPs, or find your own MP’s contact information here if you want to send personalized letter. Phone calls can go a long way, so please consider phoning your MP today in support of a debate on the Canada-China investment pact.
Video by Caitlin Dodd, Heather Libby and Kai Nagata. Starring Dylan Burns and Kaylah Zander. Music by Kevin McLeod and used under a Creative Commons license.
What is the Canada-China investment treaty?
The Agreement between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments is a bilateral investment treaty similar to what Canada has included in its free trade deals, or standalone investment deals (FIPPAs), since NAFTA. These corporate rights pacts allow companies to sue governments when they feel their investments or profits have been undermined by public policies, including public health or environmental measures, or by delays to energy and resource projects.
These bilateral investment treaties (BITs, as some countries call them) have proliferated over the past decade to the point where today there are over 3,000 in effect between countries. Canada has dozens of FIPPAs in place, mostly with developing countries where Canadian mining and energy firms want to establish or expand projects, with as few obstacles as possible. For example, the Harper government just announced the conclusion of a FIPPA with Tanzania and is beginning negotiations with Nigeria. The right to sue the host country for policies or decisions they don’t like is very attractive to Canadian mining profiteers.
But in reality, this investor-state dispute process has been unambiguously harmful to Canada. Because of the investment protections in NAFTA, we are the sixth most sued country in the world, and the federal government has paid out $157 million in awards and settlements to foreign investors. It is perverse that Canada continues to pursue ever larger investment treaties with China, with the European Union through the Comprehensive Economic and Trade Agreement (CETA), and in the Trans-Pacific Partnership trade negotiations, which Harper recently joined.
Let the oil profits flow freely
The investment pact with China will notably allow Chinese energy companies, once they are established in Canada, to threaten the federal, provincial or territorial governments against imposing environmental rules on tar sands production, pipeline construction and other projects. Delays or denials on energy and mining investments could result in costly lawsuits outside Canada’s courts, which will be settled by unaccountable private arbitrators with a vested interest in the outcome. It’s a corrupt process to begin with, made more so by the lack of transparency in this particular investment treaty. It will be up to the Chinese government whether any of the investment lawsuits are made public or not.
Chinese firms are almost certain to make use of their new treaty protections as they increase their investments in Canadian energy and resource projects, including through the planned CNOOC purchase of the Canadian energy firm Nexen. About one in five investor-state lawsuits relates to resource extraction, and at least nine of the NAFTA investment lawsuits against Canada involve resources. For example, U.S. firms Exxon Mobil and Murphy Oil had no qualms about suing Canada under NAFTA because they did not like having to transfer a portion of their profits into research and development in Newfoundland and Labrador. A private NAFTA tribunal ruled earlier this year against the R&D measures. Canada is on the hook for another $65 million, most of that to be paid to 2011’s richest company in the world (Exxon).
There IS an alternative
Ideologues like the Harper Conservatives will argue that investment treaties are an important tool for attracting foreign investment to Canada but there is no evidence to back this up. On the other hand, the evidence keeps piling up that the pacts undermine democracy by making corporate rights to profit more important than environmental and other social priorities. In a very real sense, this China deal and other investment pacts are tools for locking in and expanding controversial resource projects like the tar sands in Alberta, the digging of mega-quarries in Ontario, or hydro-fracking for natural gas across Canada.
Last year, the Australian government, faced with the threat of investor-state challenges to public health measures related to cigarettes (plain packaging laws) and environmental regulations on coal-fired plants, decided it would not negotiate protections like the ones in the China-Canada deal into its own trade deals. If companies wanted to invest abroad, they should take out insurance instead of dumping the financial risks onto the Australian public. When companies invested in Australia, they should have no greater rights than local companies whose disputes with government policies must go through national courts.
Send a letter to your MP today saying you oppose this unfair corporate rights pact and demand a public debate!
I am opposed to the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA). These investment agreements are nothing but corporate rights pacts that put public policy at risk from costly, secretive lawsuits. They undermine basic notions of democracy. Canada has already paid out more than $157 million in awards or settlements with foreign investors under NAFTA's investor-state dispute settlement system. It was a bad idea then, it's a bad idea now.
Last year, faced with the threat of investor-state challenges to public health measures related to cigarettes and environmental regulations on coal-fired plants, Australia decided it would not negotiate these extreme investment protections into its trade deals. The Australian government decided that if companies wanted to invest abroad, they should take out insurance instead of dumping the financial risks onto the Australian public. When companies invested in Australia, they would have no greater rights than local companies whose disputes with government policy must go through national courts.
I urge you to support the Australian government's approach to investment protection, and to discontinue the policy of including investor-state dispute settlement in trade deals or standalone treaties like this FIPA with China. At the very least, Parliament should have the opportunity to debate and make changes to the treaty, or to eventually reject it if MPs determine it is not in Canada’s best interests.
The Chinese government denies their people basic democratic rights. We would be sinking to that level if we bring this treaty into force without public scrutiny or debate as the Prime Minister is proposing.
I look forward to your response.