Impending investment deal raises concerns about transparency and the rule of law
By Caitlin McLachlan, Staff Writer
When news broke of an impending Foreign Investment Protection and Promotion Agreement (FIPA) signed by Canada and China on September 9, 2012, concerned Canadians raised the red flag.
Within days of the announcement, social justice organizations, international investment experts and opposition parties demanded more time for independent and public assessments. Concerns, shared by opponents, involve the negative impact it would have on Canada’s environment and natural resources, as well as the compounding factors of unbalanced reciprocity and lack of accountability in the agreement.
“The environmental assessment is completely inadequate and confusing… we need to take it back to the drawing board right now.”
A press release issued by the Council of Canadians on Nov. 8, rejects the final draft of the FIPA’s environmental assessment. Stuart Trew, a trade campaigner with the Council of Canadians says, “The environmental assessment is completely inadequate and confusing… we need to take it back to the drawing board right now.”
Trew is not alone in his concern for clarity.
In an op-ed republished by the Canadian Centre for Policy Alternatives, Scott Sinclair explains that Canada’s resources will be of primary interest to Chinese investors. Sinclair, a senior trade policy researcher at the Canadian Centre for Policy Alternatives, writes “The Canada-China FIPA will govern all future Chinese investment in Canada, not just in the energy sector. The issues raised by this treaty deserve a thorough public airing.”
The most common concern regarding environmental preservation and the FIPA agreement is the language used. On Oct. 18, Liberal MP Wayne Easter submit a list of questions regarding the Canada-China FIPA to government officials. Question 18 deals with concerns about the agreement’s impact on Canadian laws protecting consumer safety, the environment, labour rights, and so on.
In response, the Department of Foreign Affairs and International Trade writes, “All foreign investors in Canada, including those from China, are subject to the same laws and regulations as domestic investors. Nothing in the FIPA prevents federal, provincial and territorial governments from regulating in the public interest, as long as it is done on a non-discriminatory and not wholly arbitrary manner.”
The agreement states that disputes between contracting parties will be dealt with by an ad hoc arbitral tribunal outside of Canadian and Chinese court systems. Since the language is so broad, opponents fear that arbitrators will be free to determine how these definitions fit to their standards.
There is growing concern that the agreement works more in favor of Chinese investors and to the detriment of evolving Canadian environmental policies. “The rights the treaty gives to foreign investors to challenge environmental policy can, and more and more often do, undermine policies to protect the environment, public health or to conserve resources,” says Trew.
What is a FIPA? – Foreign Investment Promotion and Protection Agreement (FIPA) is a bilateral agreement aimed at protecting and promoting foreign investment through legally-binding rights and obligations.
How long has this agreement been in progress? – Negotiations began in 1994; were put on hold until 2004; final negotiations were completed in January 2012 and the agreement was signed on September 9, 2012.
What is an arbitral tribunal? – A “mini-trial,” somewhat less formal than a court trial. In most cases the arbitrator is an attorney, either alone or as part of a panel.
To read the full Canada-China FIPA, visit: http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fipa-apie/china-text-chine.aspx?lang=en&view=d
To read the full Environmental Assessment of the Canada-China FIPA, visit: http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/china-chine/finalEA-china-chine-EEfinale.aspx?lang=eng&view=d
Caitlin McLachlan is a freelance writer/photographer whose passions include the environment, culture, serendipitous animal rescue and the mysterious unraveling of a life lived adventurously.