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Do You Know About Canada's Contentious FIPA Trade Treaty With China?

There is a famous Chinese curse that goes "may you live in interesting times." The government ushered in some interesting times indeed on September 12 when it ratified the Canada-China Foreign Investment Promotion and Protection Agreement [FIPA]. It's been two years since the treaty was signed at the Asia-Pacific Economic Co-operation summit in Vladivostok in September 2012. The deed was done on the last day of the meetings, in an oily grip and grin between Stephen Harper and Communist Party leader Xi Jinping. Elizabeth May sent an energetic email in 2012 after the announcement that put the treaty into context: "for the first time in Canadian history, the Canada-China Investment Treaty will allow investors (including Chinese state-owned enterprises such as CNOOC or Sinopec), to claim damages against the Canadian government in secret, for decisions taken at the municipal, provincial, territorial or federal level that result in a reduction of their expectation of profits. Even decisions of Canadian courts can give rise to damages."

FIPA gifts one of the Northern Gateway pipeline's strongest proponents, national oil giant Sinopec, with the right to sue the BC government or any sub-national organization if it moves to block the pipeline. The "super-large petroleum and petrochemical enterprise group," as its website describes Sinopec, could even demand that only Chinese workers and materials be deployed on the pipeline project. In its annual report, Sinopec dispels any and all confusion as to its status; "Sinopec is state-owned company solely invested by the State, functioning as a state-authorized investment organization in which the state holds the controlling share." There is no rule of law in China.

The Chinese Communist Party reigns supreme and its decisions are beyond appeal. FIPA could have been ratified in late October 2012, but it was delayed as a storm of protest erupted across Canada. After the news of the treaty signing squeezed out of Stephen Harper's iron grasp, CBC's Rick Mercer, never one to pass up the chance for a mighty rant, asked rhetorically if it was a scene from a James Bond movie. "Since when do Canadian prime ministers sign secret agreements with the Chinese in Russia? Was Dr. No there? Was there a naked lady painted in gold?"

Gus Van Harten is a global authority on investment trade deals and international arbitration panels. In October 2012, Van Harten wrote an open letter to Prime Minister Harper urging a comprehensive review of FIPA. Van Harten painted a glaring picture of humble servitude if FIPA is ratified: "the legal consequences of the treaty will be irreversible by any Canadian court, legislature or other decision-maker for 31 years after the treaty is given effect," Van Harten wrote. Financial Post columnist Diane Francis used a hockey metaphor to describe the FIPA deal in a November 2012 column; "Ottawa capitulated to China on everything. The deal ... allows only a select few to play on Team Canada on a small patch of ice in China and to be fouled, without remedies or referees.

By contrast, Team China can play anywhere on Canadian ice, can appeal referee calls it dislikes and negotiate compensation for damages while in the penalty box behind closed doors." Francis compared the government's negotiating skills to those of the British prime minister whose strategy of appeasement led to Hitler's Nazis running roughshod over Europe. "The Tories, backed by a naive Canadian Chamber of Commerce and a handful of big, conflicted business interests, have demonstrated the worst negotiating skills since Neville Chamberlain."

In early 2013, the 300-member Hupacasath First Nation on Vancouver Island filed an injunction against the federal government, arguing Ottawa breached its constitutional obligations to consult First Nations when negotiating the FIPA. On the 27th of August 2013, the challenge was dismissed. Chief Justice Paul Crampton wrote that the potential adverse effects of the treaty that the Hupacasath submitted "are non-appreciable and speculative in nature." Hupacasath representative Brenda Sayers said they would appeal the ruling. "Hupacasath remains steadfast in our commitment to defend the people, the land and our constitutional rights for present as well as for future generations," says. "We firmly believe the FIPA will have a deep and profound impact on our inherent Indigenous rights and for all Canadians who cherish the environmental heritage we inherited from our grandparents."

This is an excerpt from Trevor Greene's new, self-published book, co-written with Mike Velemirovich, There Is No Planet B: Promise And Peril On Our Warming World.

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