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

from the off-the-media-radar dept

Mon, Mar 7th 2016 11:23pm — Glyn Moody

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.

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

29 Comments

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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.
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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!!
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Tom, 8 Mar 2016 @ 2:11am

WTF
Why the actual fuck is Corporate sovereignty even a thing?
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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.
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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.
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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.
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Ed (profile), 8 Mar 2016 @ 5:36am

Re: WTF
Because craven politicians and the USTR are guaranteed cushy and lucrative corporate gigs once they are done with their "public service" jobs.
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none, 8 Mar 2016 @ 6:17am

Please date your articles.
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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!
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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.
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Anonymous Coward, 8 Mar 2016 @ 6:50am

Re:
Legal Issues
by Glyn Moody
Mon, Mar 7th 2016 11:23pm
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Anonymous Coward, 8 Mar 2016 @ 7:23am

Re: Re:
I advocate that we just take all of the warning labels off of everything and let the problem take care of itself!
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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.
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PRMan, 8 Mar 2016 @ 7:44am

Re: WTF
Because stupid politicians vote for it on a "fast-track" vote.
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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.
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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.
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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.
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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?
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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?
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Anonymous Coward, 8 Mar 2016 @ 10:52am

Re: Re: The world is not their's soley
I said, "NOT to mention selling nuclear secrets to foreign governments.."
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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.
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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?
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That One Guy (profile), 9 Mar 2016 @ 1:27am

Re:
In the canadian courts? Couple hundred million perhaps. In the corporate sovereignty 'court'? However much they feel like claiming, so swap 'millions' with 'billions'.
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Wendy Cockcroft, 9 Mar 2016 @ 2:28am

Re: Re: WTF
Because stupid people believe there is such a thing as the free market, and that the market will correct itself so none of this really matters.
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Wendy Cockcroft, 9 Mar 2016 @ 2:30am

Re: Re: maybe, that's the plan...
This is becoming an increasingly moot point in China, where private industry reigns in tandem with the state.
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Craig Welch (profile), 9 Mar 2016 @ 10:04pm

Re: Re: @all
What stops the Government from filing a counter-suit?

Well, the agreement, for one.
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Anonymous Coward, 12 Mar 2016 @ 5:40pm

Re:
Canada is a gem
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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?
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Talmyr (profile), 14 Mar 2016 @ 6:42am

Re:
How much would a 14-acre diamond be worth?
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