OTTAWA, Ontario, Canada, October 24, 2012 (ENS) – To attract Chinese investment for development of the Alberta oil sands and other natural resources, Prime Minister Stephen Harper is pushing through a treaty that gives away Canadian legislative and judicial sovereignty with no public debate, warns a Canadian international investment law expert and law professor.

The deal could be ratified in Parliament as early as October 31, says Professor Gus Van Harten of York University’s Osgoode Hall Law School, one of very few voices raised in warning.

Canadian & Chinese officials

Canadian Trade Minister Ed Fast, seated left, and Chinese Commerce Minister Chen Deming, seated right, sign the FIPA at the APEC Leaders’ Meeting in Vladivostok, Russia while Prime Minister Stephen Harper and Chinese President Hu Jintao look on, September 8, 2012 (Photo courtesy Office of the Prime Minister)

Prime Minister Harper and Chinese President Hu Jintao oversaw the signing of the treaty in Vladivostok in September on the margins of the Asia-Pacific Economic Cooperation meeting.

Although the Canadian government has been “dodging the question of when they’re going to finalize it,” Van Harten says the Canada-China Foreign Investment Promotion and Protection Act could take effect at the end of November, 30 days after ratification, if there is no public outcry or constitutional challenge from any of the provinces or First Nations.

If the treaty is ratified, Van Harten fears Canadian and provincial governments and First Nations would lose their power to regulate natural resource extraction and the environmental damages that may result from any project in which a Chinese investor is involved.

In an October 12 open letter to Prime Minister Harper and Minister of International Trade Ed Fast, Van Harten wrote, “Chinese asset owners in Canada will be able, at their option, to challenge Canadian legislative, executive, or judicial decisions outside the Canadian legal system and Canadian courts.”

But Van Harten has not received a reply from the federal officials.

He has sent letters to provincial premiers, two of whom had no idea this was happening, although the deal could restrict provincial powers, said Van Harten, who declined to identify the two ignorant provinces.

In an interview with ENS, Van Harten detailed what could happen to the Canadian environment if this treaty is ratified.

“Any activities of any Chinese-owned company, even minority owned, in Canada would be subject to this treaty. That includes companies active in the resource sector – in oil sands, mining, processing lumber, fishing – wide ranging areas of the Canadian economy.”

Gus Van Harten

Professor Gus Van Harten (Photo courtesy Osgoode Hall Law School, York University)

“Let’s say the government passed legislation that changed the regulatory framework for protection of rivers and lakes, or carbon dioxide emissions, or the regulatory framework on remediation of lands by mining companies. All of those decisions would be subject to review by arbitrators under this treaty,” explained Van Harten. “Arbitrators are a power unto themselves, their decisions generally are not subject to review.”

“We’re putting ourselves in the position of a developing country,” Van Harten told ENS. “It seems Prime Minister Harper wants a lot of Chinese money to come in to develop the oil sands. It is reported that they need hundreds of millions to develop the oil sands. I don’t know whether he cares about future regulation of the oil sands development. Chinese investors would do the dirty work in stopping these regulations.”

After reviewing 200 cases under other investment treaties that involved disputes about health and environmental regulations, justice, basic infrastructure and essential services, Van Harten is convinced this deal “could affect regulations.”

He says this treaty is “unique” because there would be much more investment coming into Canada than under any other Foreign Investment Promotion and Protection Act, or FIPA, as these treaties are commonly called.

Van Harten says any province or First Nation could delay the ratification to allow time for public debate by filing a lawsuit in any Superior Court in the country before Parliament ratifies the treaty.

“Provincial governments are the best hope to pick up the phone and demand delay. They can seek an injunction to delay this,” Van Harten said.

oil sands

Aerial view of the Suncor oil sands upgrader plant and tailings pond north of Fort McMurray, Alberta, Canada. (Photo by Jiri Rezac / Greenpeace)

In a letter to British Columbia Premier Christy Clark, earlier this week, Van Harten wrote, “It must be emphasized that provincial governments are not simply another set of ‘stakeholders’ to be consulted by the federal government en route to treaty signature and implementation.”

“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,” he wrote to Premier Clark.

“Investor rights of the scale and breadth contemplated in the MAI [Multilateral Agreement on Investment] would affect many matters that fall partly or exclusively within provincial legislative jurisdiction.”

“Some of the more important to British Columbians include: the management and conservation of natural resources; health care, education, and other social services; the regulation of property and civil rights in the province; and municipal institutions and governments,” he wrote.

In his letter to Premier Clark, Van Harten posed a series of questions:

  • How is it that the federal government can expose provincial measures to binding international arbitration without the province’s consent?
  • Who will pay if a provincial measure is found to violate the federal government’s treaty obligations?
  • If the provincial government maintains an inconsistent measure, might the federal government be required to pay ongoing damages?
  • Setting aside the jurisdictional issues, is it fiscally responsible for the federal government to negotiate an agreement that exposes it to open-ended liability for provincial government measures?
  • And, faced with an adverse ruling, what steps might the federal government take to try to force provinces or municipalities to remove offending measures?

“The cost to Canadian taxpayers to defend provincial and local government measures against challenge and to vet future measures for potential inconsistency also cannot be ignored,” Van Harten wrote. “Nor, just as importantly, can Canadians ignore the cost to democracy of the chilling effect such potential threats exert on provincial and local governments’ ability to govern.”

Some Canadians are beginning to become alarmed. Greg Spendjian, representing the nonprofit Citizens for Cross-Party Cooperation, today expressed “extreme concern” in a letter to the editor of the “Vancouver Sun” newspaper.

“The deal appears to be a backroom way to weaken environmental and other regulatory laws in Canada,” wrote Spendjian. This far-reaching trade deal has been negotiated without Canadians being made aware of its contents. It is being rammed through Parliament without its provisions being fully debated.”

“The mainstream media has regrettably been surprisingly quiet and has not raised warning flags about the treaty. The Harper government is thumbing its nose at the democratic process in Canada. Citizens across the country should be raising objections to the treaty with their MPs.”

Copyright Environment News Service (ENS) 2012. All rights reserved.