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maude barlow
NAFTA's ISDS: Why Canada Is One of the Most Sued Countries in the World
This is evidence that even though trade agreements appear to treat all parties equally, the more powerful countries are usually more immune to trade challenges.
Canada has paid American corporations more than $200 million (approximately EUR135 million) in the seven cases it has lost and foreign investors are now seeking over $6 billion (approximately EUR4 billion) from the Canadian government in new cases. Even defending cases that may not be successful is expensive. Canada has spent over $65 million (approximately EUR45 million) defending itself from NAFTA challenges.
The Canadian Centre for Policy Alternatives reports that almost two-thirds of claims against Canada involved environmental protection or resources management challenges that allegedly interfered with American corporations' profit.
Cases include:
- Ethyl, a U.S. chemical corporation, successfully challenged a Canadian ban on imports of its gasoline that contained MMT, an additive that is a suspected neurotoxin. The Canadian government repealed the ban and paid the company $13 million (approximately EUR8.8 million) for its loss of revenue.
- S.D. Myers, a U.S. waste disposal firm, challenged a similar ban on the export of toxic PCB waste. Canada paid the company over $6 million (approximately EUR4 million).
- A NAFTA panel ordered the Canadian government to pay Exxon-Mobil, the world's largest oil and gas company, $17.3 million (approximately EUR11.6 million) when the company challenged government guidelines that investors in offshore exploration in the province of Newfoundland and Labrador - where the company is heavily involved - must invest in local research and development.
- New Jersey-based Bilcon Construction is demanding $300,000 (approximately EUR200,000) in damages from the Canadian government after winning a NAFTA challenge when its plan to build a massive quarry and marine terminal in an environmentally sensitive area of Nova Scotia and ship basalt aggregate through the Bay of Fundy, site of the highest tides in the world, was rejected by an environmental assessment panel.
- Chemical giant Dow AgroSciences used NAFTA to force the province of Quebec, after it banned 2,4-D, a pesticide that the Natural Resources Defence Council says has been linked in many studies to cancer and cell damage, to publicly acknowledge that the chemical does not pose an "unacceptable risk" to human health, a position the government had previously held.
- The Canadian government paid American pulp and paper giant AbitibiBowater $130 million (approximately EUR88 million) after the company successfully used NAFTA to claim compensation for the "water and timber rights" it left behind when it abandoned its operations in the province of Newfoundland and Labrador after 100 years, leaving the workers with unpaid pensions. This challenge is particularly disturbing because it gives a foreign investor the right to claim compensation for the actual resources it used while operating in another jurisdiction.
- Mesa Power Group, an energy company owned by Texas billionaire T. Boone Pickens, is claiming $775 million (approximately EUR523 million) in a challenge to the province of Ontario's Green Energy Act, which gives preferential access to local wind farm operators.
- Lone Pine, a Canadian energy company, is suing the Canadian government through its American affiliate for $250 million (approximately EUR152 million) because the province of Quebec introduced a temporary moratorium on all fracking activities under the St. Lawrence River until further studies are completed. This challenge is concerning because it involves a domestic company using a foreign subsidiary to sue its own government.
- Eli Lilly, a U.S. pharmaceutical giant, is suing Canada for $500 million (approximately EUR337 million) after three levels of courts in Canada denied it a patent extension on one of its products. This case is particularly disturbing because it challenges Canadian laws as interpreted by Canadian courts and represents a new frontier for ISDS challenges
These, and other examples show that trade and investment agreements such as NAFTA give transnational corporations incredible new rights to impose their will on governments. But they are probably just the tip of the iceberg because many new laws or changes to laws never come to light because of the "chill effect" of prior restraint. The Canadian government adopted a new policy soon after NAFTA was adopted whereby all new laws and any changes to existing laws have to be vetted by trade experts to ensure they are not challengeable under ISDS rules.
Stephen Harper's Politics Put Canada To Shame
The reason is simple: when it comes to climate change, we are simply out of time. Climate scientists have told us that this is the most critical decade to begin decisively weaning ourselves off fossil fuels if we are to have a decent shot at preventing truly catastrophic warming.
That's why we are seeing China, India, the United States, the European Union and pretty much every major country besides Canada unveiling their most ambitious climate commitments yet.
It's not nearly enough, but it puts our country to shame. Because when it comes to climate change, the Canadian government is doing worse than nothing - it is racing in the wrong direction.
The Harper government's single-minded obsession with tar sands expansion will inevitably result in massive increases of greenhouse gas emissions. It gutted every major water law and aggressively promotes oil pipelines such as Energy East, which will threaten more than 1,000 waterways including the St Lawrence river.
And the government is chasing free trade agreements such as the Comprehensive Economic and Trade Agreement (Ceta) with Europe, as well as the recently completed Trans-Pacific Partnership (TPP) with Asia-Pacific partners. The latter deal has been much in the news over its impact on dairy farmers and the auto sector, with the government attempting to throw money at the problems it has just created.
But no amount of money can solve the most serious problem created by the TPP: the way it can be used as a weapon against ambitious climate policy. This is because the TPP, like Ceta and the North American Free Trade Agreement (Nafta), gives foreign corporations the right to directly sue our government for new laws or regulations - whether environmental, health or human rights - that they claim negatively affect their bottom line.
Canada is currently facing $2.6bn in legal challenges from American corporations under Nafta. Current and past challenges have targeted bans against harmful additives to gasoline and exports of PCBs, and a moratorium on fracking. If a future government wants to reinstate our water laws or fulfill a commitment to serious fossil fuel reduction that might be agreed to in Paris, TPP adds a whole new batch of foreign investors to the current group that already have the right to challenge those laws before a private tribunal.
It is true that neither of the two main opposition parties has laid out a climate action plan that will get us off fossil fuels fast enough - which is why we both signed the Leap Manifesto, a people's platform for ambitious and justice-based climate action.
But this issue and this election are too important not to say this: another term of Harper's Conservatives is a guarantee that Canada's pattern of climate vandalism will pass the point of no return. At international climate negotiations, our government's defiant commitment to carbon pollution will continue to be a barrier to progress, giving other governments an excuse to lower their ambitions and waste what is left of this critical decade.
As we are seeing outside our borders, climate ambition is contagious. But as we know from experience at UN negotiations, so too is intransigence.
With Harper at the helm, our best hope will be that other countries cut their emissions enough to account not just for their own share of global pollution but for Canada's as well. It's a hope that is both unrealistic and deeply unworthy of our nation.
There is another path. When we vote on 19 October, we can choose to stay focused on the planetary stakes of this election. We must remove the single greatest barrier to climate progress, rejecting the politics of distraction and division. Then, on 20 October, we can begin the real work of moving to a clean economy, one that brings all who share this country closer together.
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