Why I think we are absolute idiots if we approve CNOOC take-over of Nexen

On Tuesday, September 18th, 2012 in Blogs
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It is hard to know how else to put it. I don’t want to get anyone freaked out or overly alarmed, but are we paying any attention?

Attention should be paid to the fact that the Prime Minister has signed a deal with President Hu of China that promises investor protection. The text of said deal is not yet before the House of Commons, but everything I read about it (including from business analysts at Heenan Blaikie and Osler, Hoskin and Harcourt) anticipates the deal will include investor-state provisions similar to those in Chapter 11 of NAFTA.

Chapter 11 of NAFTA allows corporations from Mexico or the USA to claim damages against Canada if any level of Canadian government (municipal, provincial or federal) causes them to experience less profits than they had anticipated. Canada has actually repealed a law limiting a toxic gasoline additive when the US-based manufacturer sued under Chapter 11 — and we paid $10 million plus in damages. This outrage only gets more outrageous if the claims for multiple millions in damages come from a non-democratic enormous economy to which we have hitched our wagon as a compliant resource colony.

When will Mr. Harper share the text of this investor agreement with Parliamentarians? When will it be shared with Canadians? It was signed on September 8th when both Harper and Hu were in Russia. It must now be ratified. Assuming all the Conservative MPs who are worried about selling out our country to China do what they always do and submit to the will of the Boss, it will become a trade obligation. China will, if offended by any new health, labour, or environmental law, be able to make a claim for damages. I have already witnessed the chilling effect of Canada knowing a US based corporation can sue under Chapter 11. It was rumoured that former Liberal Health Minister Allan Rock refused to ban cosmetic use of pesticides for fear of Chapter 11 claims by US pesticide manufacturers.

What happens when Canadian laws, passed democratically, are struck down in hotel room arbitrations launched by the Communist Party of China?

I pay attention to things that CNOOC’s CEO says in public. In the August 29, 2012, Wall Street Journal, CNOOC CEO Wang Yilin said, “Large-scale deep-water rigs are our mobile national territory and a strategic weapon.” OK, so the bitumen isn’t mobile – until you mix it with diluents and stick it in a pipeline. But the oil sands do become Chinese territory. What did he mean about “strategic weapon?”

Are there national security implications?

I would love to trust in a national security review under the 2009 amendments to the Investment Canada Act, except that Stephen Harper specifically rejected the advice of the blue ribbon panel (struck after the Minmetal attempt to buy Noranda) that Canada needed a clear, objective definition of “national security.” The experts thought we should have a definition and use it to assess any takeovers of Canadian companies by foreign interests — particularly state-owned enterprises. Our PM rejected the advice. Instead the Canada Gazette for the 2009 amendments says that “national security” cannot be defined. It is, apparently, a fluid term.

Smart people I respect, like Andrew Coyne, say “don’t worry — there’s no national security threat when you cannot take the resource out of the country.” But then I run into stories like this:

Beijing hints at bond attack on Japan

Jin Baisong from the Chinese Academy of International Trade – a branch of the commerce ministry – said China should use its power as Japan’s biggest creditor with $230bn (£141bn) of bonds to “impose sanctions on Japan in the most effective manner” and bring Tokyo’s festering fiscal crisis to a head.

Writing in the Communist Party newspaper China Daily, Mr. Jin called on China to invoke the “security exception” rule under the World Trade Organisation to punish Japan, rejecting arguments that a trade war between the two Pacific giants would be mutually destructive.

Separately, the Hong Kong Economic Journal reported that China is drawing up plans to cut off Japan’s supplies of rare earth metals needed for hi-tech industry.

- The Telegraph, September 19, 2012

OK, maybe he’s just threatening to destroy Japan’s economy. Maybe he doesn’t mean it. Maybe the WTO wouldn’t let him do it…. but then there was the Sino-Forest fraud, busted by the Ontario Securities Commission:

OSC puts the spotlight on Sino-Forest gatekeepers

In its allegations Tuesday, the OSC noted that auditors Ernst & Young “were not made aware” of Sino-Forest’s “systemic practice of creating deceitful purchase contracts and sales contracts.” The commission makes no further comment on the audit firm’s work. A spokeswoman for Ernst & Young could not be reached for comment Tuesday.

The OSC issued a report in March calling on boards, underwriters, auditors and stock exchanges to improve the practices for listing foreign companies on Canadian stock exchanges, saying there has been a broad lack of “skepticism” about business practices in emerging companies like China.

- Globe and Mail, May 22, 2012

There’s a beautiful term: “broad lack of skepticism.”

It makes me nervous that Chinese companies are merely branches of the Chinese government. The Communist Party hierarchy appoints the boards of directors of CNOOC, Sinopec and Petro-China.

When I read in the business pages that Petro-China wants to bid on construction of the Enbridge pipeline, and read in the same story that Chinese companies are very competitive in their bids because of low labour costs, I picture the labourers who built the national dream of Pierre Berton’s imaginings… with a brutal and nasty history. We have a temporary foreign workers programme. It could happen. And the bitumen going through the proposed pipeline is to go to Chinese supertankers to Chinese refineries.

All this makes me nervous. It makes me nervous in two quite contradictory ways. Firstly, I am a tolerant small “l” liberal type of person. I am not Sino-phobic. China is not a country one can ignore. In terms of global climate negotiations, China’s engagement is essential. China has been, at least at COP17, far more progressive than Canada in talking about the need for a global climate deal.

I want greater ties with China for environmental endeavors, and cultural exchanges, and — yes – trade too. Losing sovereignty to China makes me nervous. I don’t want to be intolerant. But I want us to trade items made in Canada, by Canadians, to China. I don’t like the idea of China owning Canada. It makes it hard for us to point out to the Chinese government that it must start respecting human rights. We need to be really forceful in advocating for religious and political freedom in China. How do we do that when they have veto power over Canadian laws?

And then there are issues of global tensions. Mr. Harper and John Baird are talking tough to Iran. But what about the fact that, while we claim we are exerting sanctions on anyone doing business with Iran, Sinopec, now a major stake-holder in Syncrude, is Iran’s number one customer for oil? Or, that Chinese oil money helps prop up Bashar al-Assad?

So, bottom-line, the Nexen-CNOOC deal doesn’t have me nearly as freaked out as the investor deal Stephen Harper signed in Russia. But when I think about the idea of “net benefit” I just don’t see any answer but “no.”

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  • curt

    Well said. When will the terms of this deal be released to Canadians?

  • Fred

    Thank you Elizabeth, your’re the aces!

  • http://www.facebook.com/eve.richardson Eve Richardson

    So how do we stop this? Harper scares the daylights out of me, but nothing seems to stop him.

  • http://www.facebook.com/michael.v.marsh Michael V Marsh

    I agree completely.
    Canadians and the HoC should be reminded about known Chinese espionage activity tha has been observed over the last five or six year. The most notable one being the demise of one of our largest telecom manufacturer as a result of industrial espionage.
    CSIS has also been warning about Chinese intelligence penetration of our political system at nearly all levels. One of their report, principly centering around Quebec and Ontario, was thrown out by the Intelligence Oversight Committee, headed at the time by Frank McKenna
    Indeed we have a lot to worry about.

  • Terry

    I agree with this analysis. Harper came in in 2006 swinging against the godless communist China. Canada has come 180 in its China policy under Harper – and there has been no public debate about it.

  • http://www.facebook.com/michael.v.marsh Michael V Marsh

    P.S. keep up the good work.

  • Helene

    How come he is still in power???SCARY!!!

  • Polargold

    Very good review. I was wondering why no one has mentioned that tar sands companies do not pay royalties until their investment is paid off? Large vertically integrated companies can book their profits in many ways. The Chinese tanker company and refineries could be very profitable while the tar sands company (Nexen) could lose money and thus pay no royalties or taxes. If so, this takeover should be a non starter. Am I missing something?

  • http://www.facebook.com/jacqueline.evans.988 Jacqueline Evans

    Ms. May ,
    Once again you are at the forefront of bringing these criminals to task, I have voted NDP, since I could vote, but you are always catching my eye attention, You are a wonderful person, engaged and on top of things. You are a great leader for the shift we need in our government. I just really want This Crime Minister removed from office. Is there a way to use the Charter Of Rights to oust his ass? (pardon the expression)

    • Lillian Tetreau

      ” CRIME MINISTER” exactly what Harper is. Assuming he is all-knowing he arrogantly continues to sell out Canadians. Of course this must be kept secret, any intelligent debate prevented, and relevant information kept from the House. What a mockery of democratic process.

  • http://www.facebook.com/profile.php?id=1077246659 Donna Lecht

    A few years ago I was working in the Turks and Caicos Islands. The were experiencing a huge economic boom ( for their little country) Along came an corrupt government that sold out everything including their own people. In the process of pocketing the money. Among many other things, they allowed a huge army of Chinese workers ( controlled by an Israeli company) to displace nearly all of their workers. Small local contractors went broke, the poor Haitians TFWs working for min wage ($8hr) were reduced to working for as low as $4.or nothing. Crime skyrocketed. The locals tried to protest, but were powerless.

    At one point I had a conversation with 1 of the Israeli bosses, he told me “China’s biggest problem is unemployment, they have enough unemployed men to man every job in the world, and that is what we are going to do. Maybe I’ll see you when we get to Canada” It was a very chilling remark.

    Imagine my shock at returning home to Canada and finding the Harper government giving us to China. Lucky for TCI they were still under the British, who came in and dissolved the government. Who’s going to save us??

  • Jill

    Eventually the Conservative MPs will rebel against the Harper tyranny. Let’s all just hope it’s not too late. I do wonder if they even get information anymore.

    • http://www.facebook.com/jacqueline.evans.988 Jacqueline Evans

      If only they could be convinced to cross the floor.

  • Dr Mike Popovich

    We all know what happened when the Canadian gov`t allowed foreign control of the head offices of our manufacturing post income trust tax , the head offices were lost & as soon as the global shite hit the fan , they pulled out of Canada for cheaper labour zones.

    We were decimated.

    Resource is slightly different as the resource remains intact within the country.

    It is all the side stuff you mention Elizabeth that should be causing concern for all Canadians.

    My fear is the lack of attention being paid by the people on the street allowing these deals to be made & sanctioned.

    Once these deals are made , it is almost impossible to turn back.

    Scary stuff alright.

    Dr Mike Popovich

  • Allison

    Dear Elizabeth,
    Who says ‘No’.
    Who? If ALL of us do, will it make a difference?
    And who listens? Who in the PM’s office cares about ‘we the people’?
    We talk a lot. Or at least I do…in my mind! LOL!
    Really tho’, What are we to do?
    Resectfully,

  • glen cairns

    keep digging into this, Elizabeth… it all leads to the secret deal being concocted under the term “trans Pacific Partnership”, and it is a virtual corporate coup d’etat. Harper has already got us into it up to our eyeballs.

  • http://www.facebook.com/profile.php?id=100002424297455 ArgieRose Gillis

    thank you, we cont on you to hold the Harper government accountable. Brava for your wit and cool steady focus

  • Richard

    I guess the question that is on many Canadians minds is how do you stop this man, he has 3 years left, what else is on his agenda?

  • Marlene

    The Big Question–how do we stop Harper and if we cannot stop him at this point in history, can the damage be reversed ? Why is Harper’s alliance with the American based Koch Bros. ignored, unless it is not true. Now Harper is attacking women’s rights. Saw that one coming, all you have to do is watch the Republicans in the US and that will be what we are in for under Harper’s Alliance Party (as the Conservatives to not really exist)

  • gem

    Excellent – there is at least one voice in Ottawa that represents Canadians’ interests!

  • http://www.facebook.com/stella.britton.1 Stella Britton

    So how do we stop this from happening?

  • Julie Snider

    I keep asking people why Harper is still here. He was held in contempt of Parliament, received a slap on the wrist, and allowed to continue,. Why? I feel that Parliamentary process has let us down, and it smells of corruption.
    Steven Harper is a Island on to himself, he is surrounded by murky waters of lies,fear, ignorance, and complacency, and the only way to stop him, is to make him accountable for his actions.
    I don’t believe we’ve tried hard enough!!.

  • Doug DeVore

    Top shelf Elizabeth May!!! I like the way you rattle the chains.

  • Mike Dowd


    “Large-scale deep-water rigs are our mobile national territory and a strategic weapon.” OK, so the bitumen isn’t mobile – until you mix it with diluents and stick it in a pipeline. But the oil sands do become Chinese territory. What did he mean about “strategic weapon?””

    Here’s your answer to what I believe is meant.

    If China is considering any oil or gas platform to be ‘Chinese Territory’, then it gives them some sort of buffer zone around them that will de facto become Chinese territory. In this way, spread enough of them in resource areas, and the Chinese believe that they can crowd out other countries from those regions.

    A case in point is what they are doing at present in the Phillipene Sea, and the clashes over the Spratly Islands (http://en.wikipedia.org/wiki/Spratly_Islands_dispute).

    What would it mean for Canada if they had control over the Oil Sands? Likely nothing that would affect our sovereignty outside the boundries that were clearly defined in any contract, but I do not like the implications to our economy, our jobs or the fact that we are allowing a nation that has a systematic and documented system of abuse toward Human Rights to own our resources.

  • Maryse Quebec

    Merci infiniment, Mme May, d’être nos yeux et nos oreilles à l’assemblée!

  • Manuelle Mainguy

    Bravo pour vos mots Mme May! Et merci beaucoup pour la traduction de votre site et de vos textes, c’est merveilleux à lire!

  • Antonio

    Time to start a Freedom Party and reclaim our sovereignty. Let’s get Harper out, and if he likes the communist collectivist system he should move to China. Elizabeth, the Green Party is not big enough for you !

  • Andre C.

    Merci Mme May continuez votre bon travail, je ne veux pas que cette vente avec la Chine s’effectue.

  • Danielle Drouin

    Madame May,
    Je suis heureuse qu’il y ait encore des personnes honnêtes, intègres telle que vous pour nous représenter. Et je suis inquiète des nouvelles que vous nous rapportez…
    Et je le suis d’autant plus en sachant que nous avons un Premier Ministre qui travaille
    pour des intérêts douteux. Merci d’être nos yeux et nos oreilles! Félicitations pour votre travail !

  • florent lalonde

    continuée ce combat mme May Car ce gouvernement est le moin démocratique de tous. IL est inadmissible que le gouverment cache des choses aux député(es) dignement élus.C’est anti-démoncratique.Je vous appuis a 110%

  • Chris

    The Nexen-CNOOC deal must be stopped!

  • Marielle d’Auteuil

    Mme May,
    Merci pour les informations que vous nous transmettez. Vous êtes nos yeux et nos oreilles à Ottawa. C’est inquiétant et choquant de voir un leader politique vendre les matières naturelles de la population de façon aussi cavalière.

  • Jeff

    Is all the smoke-screen with the E-Coli and XL foods just a ruse to take away attention from this very serious issue?

  • susanonthesoapbox

    Great analysis Elizabeth. Both the investor protection agreement and the CNOOC takeover of Nexen are a disaster for Canada. We’re naive if we think that we’ll get reciprocal access to the Chinese market under the investor protection agreement and even if we did, the loss of control over our ability to pass our own laws is too high a price to pay. The CNOOC takeover of Nexen delivers control of the Buzzard oil field (under the North Sea) to CNOOC. Buzzard sets the Brent crude price. It’s been shut in for maintenance a few days longer than expected and has already “lifted” Brent prices to$24.20 a bbl intraday–the highest price since Oct. 17, 2011.

    As a state-owned entity CNOOC has access to credit at 1/3 the cost available to private companies and other benefits provided by the state–this gives it a huge advantage over its Cdn competitors.
    I’ve written letters to the PM, every MP I can think of and my own premier (Redford), I’ll sign the petition, is there anything else we do to put a stop to these maniacal plans?

  • Andrew

    To sum it up, this government is like watching an episode of the twilight zone, very hard to believe it’s even real, with the exception is they are playing with our very lives.

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