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NAFTA challenge to fracking ban reason to avoid investor-state dispute settlement: Australian trade minister

| April 16, 2013
Emerson: investor rights clauses "challenge a country's sovereignty"

The recent NAFTA investor lawsuit against Quebec's moratorium on shale gas development (fracking) is cited by Australia's trade minister as a reason to avoid including these excessive investor rights in trade deals. (Funny, we say the same thing in a recent fact sheet on how Free Trade is Fracking with our Future.)

On April 2, Australian Financial Review reported that Australia's Liberal-National coalition "would consider removing a major obstacle to Australia finalizing trade deals with South Korea and Japan." That obstacle is "the inclusion in trade deals of so-called investor state dispute settlement (ISDS) provisions, which would allow foreign companies to claim compensation for policy or legal decisions that hurt their investments."

Australia announced in a 2011 trade policy review that it would no longer include NAFTA-like investor rights in trade deals because they give foreign firms greater rights than local firms, put legitimate public policies at risk, and because Australian firms investing abroad can find other ways to insure those investments. Opposition parties are seizing onto this position as a barrier to concluding several trade deals on the go, and promising to reverse it if elected.

"The Coalition would, as a matter of course, put ISDS clauses on the negotiating table and then negotiate ISDS provisions on a case-by-case basis," said opposition trade critic Julie Bishop.

But Australia's trade minister, Craig Emerson, is having none of it. In a press release on April 2, he pointed out that "ISDS provisions were currently being used by an American gas comp any against the Canadian Government," in a case "over the Quebec provincial government imposing a moratorium on further exploration in the St Lawrence Valley pending the completion of environmental studies."

Emerson warns that these investor rights clauses would give foreign shale gas firms the right to sue Australia "if it or any state or local government sought to regulate coal seam gas developments" (their word for fracking).

"These provisions challenge a country's sovereignty by giving foreign companies the right to take a national government to an international court," said Emerson. "The previous Howard Government refused to include ISDS provisions in the Australia-US Free Trade Agreement, but an Abbott Liberal Government would be happy to hand these rights to multinational corporations -- rights that Australian companies don't have."

Harper's corporate agenda

In Canada, investor-state arbitration is increasingly controversial as the Harper government has multiplied the number of Foreign Investment Protection and Promotion Agreements (FIPAs) it is signing with other countries. The FIPA with China struck a nerve among Canadians because unlike many of the other FIPAs, where Canada is the net exporter of investment (e.g. Zambia, Cameroun, Tanzania, Jordan, etc), Chinese firms are heavily invested in Canadian oil, gas and mineral projects where a huge portion of investor-state challenges are launched globally.

This is why Canada's mining sector is a vocal supporter of investor-state arbitration. It let's Canadian mining firms such as Infinito Gold threaten to sue Costa Rica for $1 billion under a bilateral investment treaty from 1999. Vancouver-based but Russian-owned Rusoro Mining has also just filed a $3.03-billion investor-state claim against Venezuela under a similar FIPA with Canada, charging that Venezuela's partial nationalization of gold production, and a policy that all gold must be sold to the central bank, expropriated investments and violated the firm's minimum standards of treatment.

Amazingly, Canada is already the sixth most sued country under this excessive corporate rights regime, with the NAFTA Lone Pine case against Quebec's fracking moratorium being only one recent example. In total, Canada faces more than $5-billion worth of investor lawsuits under NAFTA. The FIPA with China, and a NAFTA-like investment chapter with Europe in the Comprehensive Economic and Trade Agreement, will only balloon the number of cases we see against government policies, including environmental and public health measures.

Take action: Demand end to corporate rights pacts

Tell the federal government that enough is enough -- that we should follow Australia's lead by eliminating investor-state dispute settlement from Canada's trade deals. You can use this easy Action Alert from the Registered Nurses' Association of Ontario to do it. Your letter will go to the Prime Minister, all party leaders and their trade critics. If one mining giant (Australia) can see the light, we should be able to convince another (Canada) that it's time to put the rights of people before corporate profits.

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Comments

Stuart Trew wrote:
Vancouver-based but Russian-owned Rusoro Mining has also just filed a $3.03-billion investor-state claim against Venezuela under a similar FIPA with Canada, charging that Venezuela's partial nationalization of gold production, and a policy that all gold must be sold to the central bank, expropriated investments and violated the firm's minimum standards of treatment.

It should be noted (and should have been mentioned here) that the Canada-Venezuela Bilateral Investment Treaty was made in 1996, a few years before Hugo Chávez became president of Venezuela. By making this corporate-rights agreement with Canada, the former corporatist government of Rafael Caldera ensured that any future attempts by a subsequent government to wrest control of the country's resources and economy from Canadian corporations would be severely undermined. Chávez himself never would have signed such an agreement.

It's important to remember that, while these investor-rights agreements infringe on Canadian sovereignty and Canadian economic interests, their impacts on the other treaty parties can be even more restricting and regressive, especially in the event that those parties take steps to rid themselves of some of the worst aspects of foreign ownership and control. The agreements act as a disincentive and brake on a contracting foreign government against standing up to imperialism any time in the near future.

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