Corporate Sovereignty Now So Toxic, For Once It Isn't Being Used Against Canada -- Yet

from the off-the-media-radar dept

Corporate sovereignty was devised decades ago as a weapon for Western nations to wield on behalf of their investors against emerging nations who stepped out of line. However, its inclusion in NAFTA, the 1994 trade deal between the US, Canada and Mexico, changed the situation dramatically, and saw numerous investor-state dispute settlement (ISDS) suits being brought against Canada, rather than by it. As a 2015 report on ISDS cases under NAFTA from the Canadian Centre of Policy Alternatives noted:

Canada has been the target of over 70% of all NAFTA claims since 2005. Currently, Canada faces nine active claims challenging a wide range of government measures that allegedly interfere with the expected profitability of foreign investments. Foreign investors are seeking over $6 billion in damages from the Canadian government. These include challenges to a ban on fracking by the Quebec provincial government and a decision by a Canadian federal court to invalidate a pharmaceutical patent on the basis that it was not sufficiently innovative or useful.
Despite that painful track record, in 2014 Canada signed the Foreign Investor Protection Agreement (FIPA) with China, which not only included corporate sovereignty provisions, but guaranteed that they would take precedence over the Canadian constitution for 31 years. However, it seems that something -- maybe the decision by TransCanada to sue the US for $15 billion because of President Obama's rejection of the Keystone XL pipeline -- has started to make people aware of ISDS's dangers. That, at least, is what a blog post on the Canadian Dogwood Initiative suggests. It's a story about a Chinese mining company filing a lawsuit against Canada's provincial government in British Columbia (BC) over a land transfer. You can read the details on the blog, but what's really interesting here is what the Chinese company is not doing:
The Chinese corporation's allegations of expropriation and lack of consultation will be considered under established Canadian law by the Supreme Court of British Columbia. Generally speaking, weak corporate interests in land -- such as mineral tenures -- while entitled to "procedural fairness" are not entitled to "consultation." Nor will the Chinese corporation be entitled to compensation if the court rules the province’s transfer was an "indirect expropriation." Under Canada's law, only direct expropriation is compensable.
In other words, this is not a case involving corporate sovereignty -- well, not yet. As the Dogwood Initiative post points out, if the Chinese company loses its case in the Canadian court, it can simply invoke that FIPA deal and use ISDS to try again:
If China Metals goes this route, the secret trade panel would not be bound by Canadian law. As environmental lawyer David Boyd points out, unfortunately for the province, and taxpayers, "ISDS tribunals have repeatedly held that indirect expropriation […] gives foreign investors the right to compensation."
So, the obvious question is: why didn't the Chinese company invoke FIPA immediately, and enjoy the huge advantages of corporate sovereignty? The blog post has a pretty plausible explanation:
Had China Metals launched a FIPA-based investor-state lawsuit right now, Canadians would have a tangible example of the corporate superpowers entrenched in these trade deals. That might spark a backlash against trade deals and could delay not only a [more extensive trade] deal with China, but the controversial Trans Pacific Partnership (TPP) as well. So for the time being this mining case is proceeding in BC Supreme Court, almost entirely off the media radar.
In other words, as in Europe, corporate sovereignty in Canada is becoming so toxic that companies are trying hard to avoid any association with it. Of course, if China Metals loses in the provincial court, it seems likely that it will then move on to using ISDS anyway. However, at least doing so will expose the vastly different legal standards of domestic courts and corporate sovereignty tribunals.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Filed Under: canada, corporate sovereignty, isds, nafta
Companies: china metals


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  • identicon
    martial law ended in the 90's, 8 Mar 2016 @ 1:24am

    trudeu is a neo con

    Him and wynne will stop at nothing to destroy this country even more than bush(S) and reagan combined tried to destroy the US and they will succeed, cause the NDP threw the election and Canadians are really stupid.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 Mar 2016 @ 12:23pm

      Re: trudeu is a neo con

      bush(S) and reagan did not try. they succeeded.

      this is the same scumbag plot they used all over the americas and the rest of the world. division and global domination. world conquest.
      that is what these jerks do for a living.
      money. power. total control. by any means necessary.

      reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 Mar 2016 @ 1:46am

    no wonder companies insist on this being included in all these 'Trade Deals'! why dont governments refuse to recognise these deals in the first place, let alone sign to accept them? they should never be allowed to be started, let alone discussed! and as for letting them be negotiated behind a complete veil of secrecy, that's preposterous! nothing good ever comes from secrecy!!

    reply to this | link to this | view in chronology ]

  • identicon
    Tom, 8 Mar 2016 @ 2:11am

    WTF

    Why the actual fuck is Corporate sovereignty even a thing?

    reply to this | link to this | view in chronology ]

  • icon
    frank87 (profile), 8 Mar 2016 @ 4:41am

    maybe, that's the plan...

    The whole TPP-deal is a kind of all against China. So maybe China is trying to block it (The difference between a company and the state isn't obvious in a communist country).
    Maybe the story "sign this, because China is evil" is backfiring.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 Mar 2016 @ 8:51am

      Re: maybe, that's the plan...

      (The difference between a company and the state isn't obvious in a communist country).

      While in a capitalist country the difference between the state and companies is difficult to discern.

      reply to this | link to this | view in chronology ]

  • icon
    Ninja (profile), 8 Mar 2016 @ 4:52am

    Actually, it's good that more and more countries and the people are aware of it. It's a two-way road and it can be used as a weapon against the countries using it.

    Let the Corporate Sovereignty Hell break loose! Maybe then the morons in power will think twice before negotiating these deals in obscurity.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 Mar 2016 @ 5:31am

    A trade agreement overrides the constitution?!?

    "Despite that painful track record, in 2014 Canada signed the Foreign Investor Protection Agreement (FIPA) with China, which not only included corporate sovereignty provisions, but guaranteed that they would take precedence over the Canadian constitution for 31 years."

    WTF! How is it even legal for a treaty to override your own constitution? The constitution is the supreme law of the land that must be amended to be changed.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 Mar 2016 @ 6:24am

      Re: A trade agreement overrides the constitution?!?

      Where have you been?

      Show me a group of people trying to put a stop to this short so shit that is not nearly universally reviled by both sides?

      Let me assure you that people want it this way because they are either to damn ignorant to know any better or are afraid to ruin their public reputation by saying intelligent things.

      Trust me, there are far... FAR more stupid ignorant mouth breathers out that will do nothing more than yell, scream, and whine the moment you say something their dogma does not agree with. Take a trip to an American University some time and try see how much people hate their liberties. Heck, just read the news!

      reply to this | link to this | view in chronology ]

    • icon
      That One Guy (profile), 8 Mar 2016 @ 6:25am

      Re: A trade agreement overrides the constitution?!?

      Because money, pools of money, and lucrative 'retirement' offers left open for anyone involved in the agreements 'helpful' enough to certain industries.

      reply to this | link to this | view in chronology ]

  • identicon
    none, 8 Mar 2016 @ 6:17am

    Please date your articles.

    reply to this | link to this | view in chronology ]

  • identicon
    Anonymous Coward, 8 Mar 2016 @ 7:39am

    You mean then Prime Minister Stephen Harper signed the deal with China while keeping it a secret from most Canadians, and ignoring the fact it breaks several Canadian Laws protecting Canadian citizens. All for a significant personal gain to wannabe dictator harper.

    Canada had nothing to do with signing that agreement just a corrupt politician pretending to act on behalf of Canada.

    reply to this | link to this | view in chronology ]

  • identicon
    TheScamCalledTPP, 8 Mar 2016 @ 7:55am

    @all

    if i were the govt id find a person to sue those places back usng the charter of rights and freedoms. WHILE courts for criminals have been able to get small time frames to go round it, you cant form outset with no crime gut the charter.....

    THAT ITSELF IS A VIOLATION AND ILLEGAL TO DO...PERIOD....this s why corporate scam er sovereignty is all a scam.

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 Mar 2016 @ 8:11am

      Re: @all

      I don't know about Canadian law but in the US it is legal to file a counter-suit. One can allege the original suit has no standing or merit, can claim the original suit is frivolous, can ask for double damages (and some jurisdictions allow more), and claim malpractice against the lawyer(s) that filed the original suit.

      Adjudication, however, is another story. In the specific case in the article should the government be named as defendant what's stopping the government from filing a counter-suit? Even if it never gets adjudicated - or the government loses - the case will likely be noticed thus calling attention to the situation.

      reply to this | link to this | view in chronology ]

  • identicon
    The next great thing, 8 Mar 2016 @ 9:22am

    The world is not their's soley

    A moratorium vote by the citizenry should have to be taken before deals the government wants to make with foreign corporations who could yield this power over them go through. DUH and WTF?

    reply to this | link to this | view in chronology ]

    • identicon
      Anonymous Coward, 8 Mar 2016 @ 9:53am

      Re: The world is not their's soley

      How is it even possible to have officials selling off chunks of the country they are in charge to protect without being charge with HIGH TREASON when these kinds of deals are made with foreign corporations?

      reply to this | link to this | view in chronology ]

    • icon
      Craig Welch (profile), 12 Mar 2016 @ 9:29pm

      Re: The world is not their's soley

      The deals (treaties) are not made with foreign corporations. They (the treaties) are made with foreign countries.

      BTW, are you OK with US corporations having the right to sue foreign governments?

      reply to this | link to this | view in chronology ]

  • icon
    KJ (profile), 8 Mar 2016 @ 10:01pm

    "The mining company, holding mineral tenures to 5.6 hectares out of the 58,900 hectares transferred..."

    How much can mineral rights to 14 acres be worth?

    reply to this | link to this | view in chronology ]


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