The Campaign Against FIPA
Now that the approval of CNOOC’s Nexen takeover is history, China bashers and critics of the deal have banded together to lambaste the Canada-China Foreign Investment Promotion and Protection Agreement (FIPA). In fact, the Leadnow.ca advocacy group in collaboration with SumOfUs.org has been active for months, trying to rally support against the impending ratification of the treaty which they declare would “allow foreign corporations to sue the Canadian government in secret tribunals (sic.), restricting Canadians from making democratic decisions about the economy, environment and energy”.
Let’s set aside simpleton letters to the editor juxtaposing FIPA versus Canadian democracy and the vitriol and antics of the rabidly anti-China leader of the Green Party, not to mention the hyperbolic remarks of the federal NDP leader. A couple anti-FIPA commentaries appearing in the Vancouver Sun attacked the agreement on several fronts including provincial rights, Canadian environmental protection laws, protection of the rights of Canadian businesses and investors in China, and ‘secret’ arbitration boards.
On neglecting provincial rights, one commentary asks: “is it morally right and politically wise for the federal government to impose an agreement on the provinces that affects their rights without consulting them?” In mid November, responding to criticism of FIPA in the Comox Valley Record, Tory MP John Duncan for Vancouver Island North notes that under the agreement, “Chinese investors in Canada must obey all of the laws and regulations of Canada”, which includes respecting the rights of the provinces under the Canadian system of federalism.
Another criticism is that Canadian businesses would be at the mercy of the Chinese legal system if and when their businesses are expropriated. Mr Duncan writes: “The main purpose of FIPA is to ensure Canadian investors in a foreign jurisdiction greater protection against discriminatory and wholly arbitrary practices…The agreement also ensures that all investment disputes are resolved under international arbitration, ensuring that adjudications are independent and fair. Canadian investors in China will no longer have to rely on the Chinese legal system to have their disputes resolved”.
In this connection, critics are particularly outraged that a secretive three-member arbitration panel would decide on matters of Canadian environmental and economic policy and thereby undermine Canadian democracy and sovereignty. Under FIFA rules, they say, Chinese companies with interests in the Canadian oil sands could sue the Canadian government on the grounds of profit loss if, for instance, the Northern Gateway pipeline is cancelled due to environmental and/or First-Nation concerns.
Bob Zimmer, Conservative MP for Prince George-Peace River, however, rejects such speculation outright. Quoted in the Prince George Free Press, Mr Zimmer responded, “The FIPA that we have with China is a framework, somewhat of a reciprocity…The FIPA helps us with a framework for companies and foreign investment that wasn’t there previously. It gives parameters the Chinese have to operate under with us.”
Attending a Ottawa briefing with foreign affairs officials last month, John Weston, another Conservative MP, adds that FIPA sets new standards for transparency that guarantees public access to relevant documents and awards and sets terms for public hearings when disputes occur.
Critics further accuse FIPA of emasculating existing Canadian environmental laws since they can be construed as being applied in arbitrary or unjustifiable ways or a disguised restriction on international trade and investment. Mr Duncan retorts: “What the agreement does NOT do is impair Canada’s ability to regulate and legislate in areas such as the environment, culture, safety, health and conservation. Furthermore, Canada’s ability to review foreign investments under the Invest Canada Act to ensure that they provide a net benefit to Canadians and that our national security is not compromised is preserved.”
Mr Duncan likened FIPA to the 24 investment treaties that Canada has signed with other countries. “We join countries such as New Zealand, Germany, the Netherlands, Belgium and Japan, which have all signed investment treaties with China on terms that are similar to or in most cases less favourable than the terms we have negotiated with China. Finally, in 2008, the Conservative Government introduced the unprecedented process of putting Canadian international treaties to the scrutiny of the House of Commons. Every single treaty is now tabled in the house for 21 days to give the opposition an opportunity to debate the treaty”.
While reasonable debate on the ramifications of FIPA is positive, unfounded fanatical opposition isn’t. Opponents should not expunge common sense or lose sight of the numerous benefits that FIPA would bring to the peoples of both countries.