Main menu:

History of RPE Thought

Posts by Tag

RSS New from the CCPA

  • 2019 Federal Budget Analysis February 27, 2019
    Watch this space for response and analysis of the federal budget from CCPA staff and our Alternative Federal Budget partners. More information will be added as it is available. Commentary and Analysis  Aim high, spend low: Federal budget 2019 by David MacDonald (CCPA) Budget 2019 fiddles while climate crisis looms by Hadrian Mertins-Kirkwood (CCPA) Organizational Responses Canadian Centre for Policy […]
    Canadian Centre for Policy Alternatives
  • Boots Riley in Winnipeg May 11 February 22, 2019
    Founder of the political Hip-Hop group The Coup, Boots Riley is a musician, rapper, writer and activist, whose feature film directorial and screenwriting debut — 2018’s celebrated Sorry to Bother You — received the award for Best First Feature at the 2019 Independent Spirit Awards (amongst several other accolades and recognitions). "[A] reflection of the […]
    Canadian Centre for Policy Alternatives
  • CCPA-BC welcomes Emira Mears as new Associate Director February 11, 2019
    This week the Canadian Centre for Policy Alternatives – BC Office is pleased to welcome Emira Mears to our staff team as our newly appointed Associate Director. Emira is an accomplished communications professional, digital strategist and entrepreneur. Through her former company Raised Eyebrow, she has had the opportunity to work with many organizations in the […]
    Canadian Centre for Policy Alternatives
  • Study explores media coverage of pipeline controversies December 14, 2018
    Supporters of fossil fuel infrastructure projects position themselves as friends of working people, framing climate action as antithetical to the more immediately pressing need to protect oil and gas workers’ livelihoods. And as the latest report from the CCPA-BC and Corporate Mapping Project confirms, this framing has become dominant across the media landscape. Focusing on pipeline […]
    Canadian Centre for Policy Alternatives
  • Study highlights ‘uncomfortable truth’ about racism in the job market December 12, 2018
    "Racialized workers in Ontario are significantly more likely to be concentrated in low-wage jobs and face persistent unemployment and earnings gaps compared to white employees — pointing to the “uncomfortable truth” about racism in the job market, according to a new study." Read the Toronto Star's coverage of our updated colour-coded labour market report, released […]
    Canadian Centre for Policy Alternatives
Progressive Bloggers

Meta

Recent Blog Posts

Posts by Author

Recent Blog Comments

The Progressive Economics Forum

Primer on Investor-State Dispute Settlement

In light of the latest NAFTA Chapter 11 decision to go against Canada, I was asked to put together some background notes for our Unifor leadership on this bizarre quasi-judicial kangaroo courtsystem.  Here they are, in case they are useful for anyone else getting up to speed on the whole investor-state dispute system.

Some very good and more detailed resources on the subject include:

The latest update from Scott Sinclair at the CCPA, who has painstakingly catalogued all the NAFTA Chapter 11 claims, and documented that Canada definitely hold the “most sued” award.

An interesting report from UNCTAD (referenced below) which highlights the worldwide nature of ISDS provisions, the accelerating pace of claims launched, and the frequency of successful claims.

Here are the briefing notes:

  • Investor-state dispute settlement (ISDS) is a quasi-judicial arbitration system whereby companies can sue national governments for perceived violations of various free-trade and investor freedom commitments.
  • The most infamous example of this system have been experienced under NAFTA, which was one of the first trade deals to spell out these special powers (in its Chapter 11).
  • In the first two decades of NAFTA, 77 claims were launched under Chapter 11’s ISDS system (as reported by the CCPA report cited above).  35 of them were against Canada (more than any other country).  Of those, at least 9 have been settled (either through arbitration or through out-of-court agreements) against Canada, with total monetary damages now approaching $200 million.
  • Claims against Canada under Chapter 11 have been accelerating: 24 of the claims against Canada have been launched in the last decade (since 2005), representing 70% of all Chapter 11 claims.  Within NAFTA’s kangaroo court system, it is clear that Canada is the favoured “target.”
  • The most recent Chapter 11 judgment awards $17 million to ExxonMobil and Murphy Oil in compensation for a provision of the 1985 Atlantic Accord energy agreement, which requires oil-producing companies to conduct minimal R&D in Newfoundland as a condition of their production license.  Note that the Atlantic Acord pre-dates NAFTA.  Also, the companies had sued Newfoundland in Canadian court to protest the requirement … and lost.  So Chapter 11 provided an alternate (and more business-friendly) way to press their same claims.
  • Past Chapter 11 judgments or out-of-court settlements against Canada include: $130 million awarded to Abitibi-Bowater for Newfoundland’s expropriation of land and water rights from a pulp mill that the company closed in 2008 (the affected workers were members of the CEP, now part of Unifor); an out-of-court settlement with Ethyl Corp. over a Canadian ban on import and sale of MMT, a chemical additive in gasoline; and a suit by Dow regarding Quebec government claims regarding the safety of the pesticide 2,4-D.
  • The actions currently being pursued against Canada include a total of $6 billion in additional claims, for a range of measures: including Quebec’s ban on natural gas fracking; several aspects of Ontario’s Green Energy Act; Canada’s support for building a second bridge crossing at Windsor-Detroit; and the federal government’s invalidation of a drug patent for a product that was clinically shown to be not useful.
  • ISDS provisions are now included in many other free trade and international investment agreements.  So while NAFTA unfortunately helped to pioneer the process, unfortunately it is no longer unique.
  • One especially dangerous ISDS provision is contained in the recently implemented Canada-China FIPA (Foreign Investment Protection Agreement).  It provides Chinese companies with access to a quasi-judicial ISDS provision for a minimum of 31 years (even if a subsequent Canadian government reneges on the treaty).
  • Globally, over 530 ISDS claims were launched between 2000 and 2013, according to the United Nations Conference on Trade and Development.  The rate of ISDS claims has accelerated (averaging over 50 per year since 2011).  Globally, most ISDS claims result in awards or out-of-court settlements against the “offending” governments.
  • Proposals to include ISDS in the proposed Canada-Europe CETA have been highly controversial, especially in Europe.  Millions of Europeans have signed petitions against any ISDS provision in CETA (or in the similar agreement being negotiated with the U.S.), and several EU-member governments have now said they will not endorse a CETA that includes ISDS.  But Canada’s government remain determined to include this anti-democratic feature in the agreement.
  • ISDS raised enormous questions of democracy, accountability, and rule of law.  The idea was supposedly justified originally by foreign investor concerns that their assets would be jeopardized by unilateral action from undemocratic “third world” governments.  But the repeated use of ISDS against Canada and other countries with mature, reliable legal systems confirms that is not the motive.  ISDS provides corporations with an undemocratic appointed business-friendly forum in which to press their claims against any government action seen as unfavourable to profits.
  • The regular use of ISDS has an additional “chill” effect on government policy-making, that extends beyond the actual judgments that have been awarded.  Governments are now even more reluctant to take any measures opposed by business, for fear of being called before this “kangaroo court” system.
  • An additional complication in Canada arises from the fact that many ISDS actions have been launched against provincial governments, which cannot be constitutionally liable for provisions of an international trade treaty.  Thus there is some legal and fiscal uncertainty about who would have to pay ISDS judgments against provincial governments.  The Harper government has paid for some past judgements that went against provincial governments (most notably the big Abitibi-Price award), but wants to make it clear the provinces will be on the hook for future judgments (including under CETA).  The provinces are resisting, and with good reason.

 

Enjoy and share:

Comments

Comment from Nautiak
Time: March 18, 2015, 9:34 pm

some countries have withdrawn from treaties with ISDS clauses perhaps provinces could do the same ? 🙂
please see this article:
http://www.economist.com/news/finance-and-economics/21623756-governments-are-souring-treaties-protect-foreign-investors-arbitration

Write a comment





Related articles