After facing the threat of international arbitration from foreign companies, India has ordered in January 2013 a freeze of all bilateral investment protection agreements negotiations until a governmental review is carried out and completed. Although news of India’s decision has not been mentioned in the Canadian media, the decision is clearly relevant.

“In November 2012, Prime Minister Harper told me in the House of Commons that the Indian Prime Minister was committed to signing a foreign investment promotion and protection agreement with Canada. I think Canada should take good note of India’s freeze on all investment protection agreements,” said Green Leader Elizabeth May, Member of Parliament for Saanich-Gulf Islands.

“The investor/state dispute system contained in investment agreements allows foreign companies to sue Canada outside of Canadian courts. Special arbitrators would take the decisions; their decision cannot be subject to judicial review. And the arbitrations are to be secret. Even the fact they are happening is to be secret,” said May.

“India is joining nations such as Australia and South Africa in saying ‘no’ to investor/state provisions. It’s time for Canada to also turn the page on this out-of-date and undemocratic international trade model,” said May.

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Could we not demonstrate our commitment to democratic values to the People’s Republic of China by submitting the treaty now for a debate and vote in the House?

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Right Hon. Stephen Harper: Mr. Speaker, unfortunately the leader of the Green Party has her facts wrong. As a matter of fact, we have not concluded a foreign investment promotion and protection agreement with the Government of India. We are obviously hopeful that we will do that. It is a commitment that Prime Minister Singh and I made. We will continue to work hard to complete those negotiations. An agreement is not yet completed, but we do have that as our ultimate objective.

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The Indian government’s resistance is understandable. Following an attempt by the Indian government to recover taxes from an Indian subsidiary of UK-based multinational Vodafone, Vodafone threatened to challenge the Indian government’s decision by initiating arbitration proceedings under a bilateral investment treaty such as the pending Canada-India or Canada-China FIPAs. In response to this threat by a multinational against a decision taken by a democratic government, the Indian Parliament is reviewing all such agreements and will not likely sign another, similar to the decisive stance taken against FIPAs by the Government of Australia.

“Despite signing this FIPA more than 5 years ago and despite Canadian pressure, the Indian Parliament has declined to ratify this treaty and instead decided to reconsider some aspects of the Agreement that it found troubling,” said Elizabeth May, Green Party Leader and MP for Saanich-Gulf Islands. “This is precisely what Canada should be doing now with the Canada-China FIPA”.

In an ironic twist, Prime Minister Stephen Harper calmly indicated his patience with the decision by the Indian Parliament to review such treaties, stating, “It’s hard to simply impose solutions and there are often a lot of barriers to getting things done at the governmental level. I’m one who happens to believe that democratic institutions, while they may slow things down, actually in the long term produce more robust outcomes with greater social buy-in and more secure long-term economic development.”

“What is truly shocking about the Prime Minister’s stated willingness to respect the democratic preferences and institutions of other countries while negotiating FIPAs”, observed May, “is his complete disdain for the will of Canadians and the role of our Parliament here at home. Will he take his own advice and submit the Canada-China FIPA to a Parliamentary review?”

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