Meanwhile, there is an even larger issue that no one is asking about. On September 8, when Prime Minister Harper was in Vladivostok, he and President Hu signed the Foreign Investment Promotion and Protection Agreement (FIPPA) between China and Canada. The text is still secret. I asked last week in Question Period when the text would be public and if we would be able to debate it in the House before the Nexen decision is made. Unfortunately, I got the pre-prepared answer from Minister Paradis about the thoroughness of the Nexen review with zero relevance to my question. The summary on the Foreign Affairs website about the FIPPA and various analyses by large trade-focused law firms suggests it will operate the same way Chapter 11 of NAFTA works.

Chapter 11 of NAFTAset the template for what are generally called ‘investor-state provisions.’ I talked to our negotiators for NAFTAa few years ago and believed them when they told me the idea was only to create a binding agreement to ensure any expropriation of investor property was compensated. But the provisions of Chapter 11 of NAFTA have been interpreted in a far more damaging way. The term ‘tantamount to expropriation’ has been interpreted to mean changes in domestic laws that reduce a foreign corporation’s expectation of profits.

Chapter 11 of NAFTA is now understood to allow 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 profit than had been anticipated. Canada actually repealed a law limiting a toxic gasoline additive, MMT, when the US-based manufacturer, Ethyl Corporation of Richmond, Virginia sued under Chapter 11–and we paid over $10 million in damages. The reality is that for the company to win in the Chapter 11 claim there was no need to show any scientific or policy flaw in the government’s decision. As Barry Appleton, the Toronto-based lawyer who represented Ethyl Corporation said at the time, if you were making a profit adding liquid plutonium to children’s breakfast cereal and a government made that illegal, you can claim damages under Chapter 11.

Canada has also paid millions in damages to a PCB disposal company, SD Myers of Ohio, for loss of profits when Canada banned the export of PCB contaminated waste. And without waiting for any decision from the NAFTA Chapter 11 arbitration, in 2010 Prime Minister Harper ordered a payment of $130 million to US-based Abitibi Bowater when Newfoundland and Labrador insisted the company had no right to keep water rights and forest cutting rights to sell to a new buyer when it closed its mill. At the time, the Prime Minister said he will create a mechanism to ensure that if provinces create liability under investment rules, provinces would have to compensate the federal government. The fact there was an argument to be made by Newfoundland and Labrador (Abitibi Bowater was benefiting from a 99-year lease, with water rights and logging contingent on running the mill) never got noticed as the money was paid out. The Prime Minister did not listen to the merits of the argument, cutting Premier Danny Williams off at the knees. Williams was left looking like a Canadian version of Hugo Chavez.

The idea that decisions by municipal, provincial and federal government can result in multi-million dollar payments to multinational corporations is quite distressing. As Steven Shrybman, lawyer for Council of Canadians, has said, ‘Chapter 11 is fundamentally corrosive of democracy.’

This outrage only gets more outrageous if the claims for multiple millions in damages come not from a private corporation, but from corporations which are branches of a foreign government. In the case of China, the FIPPA could mean that an authoritarian enormous country will have the right to claim damages if any level of democratically-elected government in Canada passes a law China claims hurts profits. 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 over claims launched by the Communist Party of China?

I hope against hope that the text, whenever we see it, does not convey Chapter 11-like rights for state-owned Chinese enterprises to claim damages in retaliation against Canadian laws. If it does, I will hope for support of my constituents to do whatever is required to protect Canadian sovereignty and democracy.

After this article was filed, on September 26, the FIPPA text was tabled. MP May promises an analysis as soon as possible.

The post The Nexen – CNOOC Deal & the Unasked Question appeared first on Elizabeth May.

Elizabeth May: Mr. Speaker, I commend my colleague from Ottawa South for a very cogent presentation on the number of issues that we are looking at. I am surprised I have not heard anyone in the House today give us the words of the CEO of CNOOC so we know what kind of people will be taking over Nexen.

The CEO of CNOOC, Wang Yilin, is quoted in the August 29 Wall Street Journal as referring to his offshore resources as “our national territory and a strategic weapon”. I know CSIS is concerned about national security concerns, yet they do not seem to be troubling the Prime Minister.

I want to emphasize again that if the Canada-China investment treaty goes through, questions such as the one that I heard from the member for Ottawa South will be answered for us.

Article 7 of that treaty says, “A Contracting Party may not require that an enterprise of that Party…appoint individuals of any particular nationality to senior management positions”.

We are discussing something today that is inextricably linked to something we are not discussing, which is the Canada-China investment treaty. I invite my friend’s comments on that.

David McGuinty: Mr. Speaker, it is not surprising that the government is proceeding surreptitiously.

These are major changes. These are risky propositions that we have not even had a chance to examine, not only in the House but in committee as well. Canadians have not been engaged. I do not know if the major industrial sectors in our country have been engaged. They may have been. They may not have been. I do not know whether other groups in Canadian society have been asked to comment on the merits of this proposed treaty.

What we are seeing is a kind of underhandedness that is disrespectful of Parliament and disrespectful of Canadians. Under the guise of promoting trade, running around the world and saying that we are the only ones open for business, carries with it a certain amount of risk because it actually weakens Canada’s negotiation position, I think, with different foreign entities like China.

The comments that were referred to earlier are precisely the kind of comments we should be examining in committee. In fact, we should be calling for the president and CEO of CNOOC to appear before committee to explain those kind of comments so we have a better understanding of what is at stake.

However, once again, there will be transaction after transaction coming forward. Until we flesh out the net benefit test appropriate for Canadians, we will go from crisis to crisis. There are many deals in the pipeline ready to be negotiated right now in the oil patch, and people are watching very carefully as to how Parliament is going to proceed.

The post Opposition Motion — Nexen appeared first on Elizabeth May.

Elizabeth May: Mr. Speaker, I thank the member for LaSalle—Émard for her very important speech. She spoke about a key national security issue, which is CNOOC’s takeover of Nexen.

I am particularly concerned that the government of the current Prime Minister chose to reject expert advice that the term “national security” should be defined and that there should be objective criteria within the Investment Canada Act. This was a recommendation that came when the special blue-ribbon panel was put together, following the moment when Minmetals nearly bought a Canadian mining giant.

The advice was objective criteria and an objective definition of national security. The Conservatives chose to ignore that advice, claiming in the 2009 notes to the Investment Canada Act within the Canada Gazette that the term was a fluid concept and impossible to define.

Now we know CSIS has national security concerns about this sale. Why do we not have hearings across the country on the national security impacts?

Hélène LeBlanc: Mr. Speaker, I thank the member for Saanich—Gulf Islands for her very apt comment.

This brings up the need to hold public hearings to clearly define the net benefit to Canada and to address national security issues, especially with respect to Canada’s strategic resources. She confirmed the importance of holding such hearings.

The post Opposition Motion — Nexen appeared first on Elizabeth May.

During the Prime Minister’s visit to China in February 2012, we learned of the existence of the Agreement between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments, an agreement with far-reaching implications for Canada’s sovereignty, security and democracy.

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This agreement that we first learned of in February was then signed by the Prime Minister in Vladivostok at the APEC summit on September 9 but tabled before the House on September 26, the first time any parliamentarians had the chance to see the text.

A 21-day clock is running on sitting days, which means we are now down to 18 sitting days before, as a matter of automatic decision-making within the Governor in Council, an agreement with far-reaching implications for the sovereignty of the country will become law. It is a treaty with the effect of legal force for a minimum of 15 years. If any future government wishes to get out of the onerous terms of this agreement with China, it would take a written notice of one year. It is not reciprocal but lopsided in the interests of Chinese rights to overturn and challenge Canadian laws and to seek damages from us. If any future government serves a one-year notice to get out of the agreement, any existing Chinese investments at the point of that notice would be further protected for another 15 years.

The agreement is sweeping. I know that with 18 days remaining one might say where is the urgency. The urgency is that the governing party plans no debate in the House. There will be no vote in the House. I note that the official opposition has an opposition day motion tomorrow touching on one specific deal, the proposed takeover of Nexen by CNOOC, but that will not touch at all, in pith nor in substance, the far-reaching implications of a mandate for the Government of Canada to encourage Chinese investments in Canada. It is a mandate for the Canadian government to give national state-owned enterprises of Communist China equal treatment to any Canadian enterprises, but to give Chinese state-owned enterprises superior rights to any Canadian corporation in the case of any laws passed in our country and to have arbitration over claims for damages that will remain secret. The Canadian public will not know of them.

I am shaken to my core by the depth and breadth of this motion that will not come before this House but merely before cabinet, and bind Canadians, municipal governments, provincial governments and federal governments for 15 years,

Mr. Speaker, I beg of you to allow an emergency debate in the House.

The Speaker: I thank the hon. member for raising this issue. I appreciate the importance she attaches to the issue, but I do not find that it meets the test set out for emergency debates.

The post Request for Emergency Debate – Foreign Investment appeared first on Elizabeth May.

In her notice, May stated that the “grave and sweeping implications for Canada’s sovereignty, security, and democracy” posed by FIPA – signed by Stephen Harper on September 9, but kept from the public and Parliament until quietly tabled on Wednesday last week – warrants much greater transparency and debate.

According to the Policy on Tabling Treaties in Parliament, FIPA must be tabled in the House for 21 sitting days before it can be ratified. Then, the Privy Council can, without any public or Parliamentary consultation or review, sign it into law.

“I pointed out in my notice to the Speaker that this is perhaps the most significant trade agreement since NAFTA,” May stated, “and the fact that it can be negotiated and ratified behind closed doors is very corrosive to our democracy.

“I also realize that an emergency debate is far from sufficient under the circumstances, but it might be the only opportunity Parliamentarians have to review and discuss FIPA before we are bound to it for the next 15 years, especially if neither the NDP nor the Liberals focus on it during their Opposition Days.”

Among concerns that urgently need public scrutiny and discussion are:

Article 3, “Promotion and Admission of Investment” – This compels each party to encourage investments from the other, and admit investments as national laws permit. It could oblige Canada to approve Chinese investments that threaten our national security or are of marginal or negative “net benefit” to Canada – a term as yet undefined.

Access to investor-state arbitration and dispute resolution mechanisms – As with Chapter 11 in NAFTA, Chinese State-Owned Enterprises (SOEs) have the right to sue the Canadian government for laws, regulations, even court decisions that might interfere with or prevent present or future profits. Unlike NAFTA, this can be done in secrecy with special tribunals. China recently claimed 3 Billion Euros in damages from Belgium for an investment failure.

Limited Access to Tribunals – Only the federal government can participate in the secret tribunals. Even if their interests are directly affected, provincial governments, Canadian companies, and others have no right of standing.

Performance Standards – China can impose conditions on foreign investors, such as the use of local suppliers, working with local business partners, training local workers and management, although Canada can’t do the same.

National Treatment Provisions – These prevent federal, provincial, and municipal governments from setting conditions favouring Canadian workers or materials for projects within Canada.

Article 33(2)(c) – This binds Canada to restrict domestic access to our fossil fuels, uranium, forests, fish, and all exhaustible resources in equal measure to any restrictions placed on exports to China .

“Given the pending takeover of Nexen by the Chinese National Offshore Oil Company and the subsequent flood of investment by Chinese State-Owned Enterprises, I am amazed that Stephen Harper is willing to thrust Canada into such a vulnerable position with FIPA,” said May. “I know I’m not the only Canadian who feels our prime minister is giving away the store. We need to debate FIPA before it’s too late.”

The post May To Request Emergency Debate on Canada-China Investment Deal appeared first on Elizabeth May.

September 28, 2012

Dear Mr. Speaker,

I write to you today on a matter of the utmost urgency. Pursuant to Standing Order 52(2), please accept this letter as written notice of my intention to rise, immediately following the conclusion of Routine Proceedings on Monday, October 1st, 2012, and move, “That this House do now adjourn”, for the purpose of an Emergency Debate.

With grave and sweeping implications for Canada’s sovereignty, security, and democracy, the Agreement between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments was announced in February during the Prime Minister’s visit to China, signed by the Prime Minister in Vladivostok during the APEC meetings on September 9th, 2012, but kept from the Canadian public and Parliament until September 26th, 2012.

According to the Policy on Tabling Treaties in Parliament, the Agreement must be tabled in the House of Commons for 21 sitting days prior to ratification, at which point the Privy Council could, without any public or Parliamentary comment or review, with the simple stroke of a pen, commit Canada to perhaps the most comprehensive trade agreement since the North American Free Trade Agreement was enacted in 1994. That such a trade agreement could be negotiated and ratified behind closed doors is profoundly corrosive of Canadian democracy. However insufficient an emergency debate will be under the circumstances, it could well provide the only opportunity to Parliamentarians to review and discuss this agreement before our country is bound by it for the next 15 years.

The assertion by a spokesman for Trade Minister Ed Fast that, if opposition Parliamentarians wish to debate the agreement they can do so on one of their opposition days, clearly indicates that there is no Parliamentary review of the agreement planned, and speaks to a profound lack of respect for the role of Parliament. Moreover, this assertion completely ignores the reality that only the New Democratic Party and Liberal Party are allotted opposition days, thus short of emergency debate, I am left with the likelihood that this Agreement will not receive any debate in the House of Commons.

Mr. Speaker, in the full knowledge that you will carefully read and consider this critical request, I wish to provide you with a brief overview of precisely what is at stake in your ruling on this debate.

Among the most egregious elements of this Agreement, I would draw your attention to Article 3, “Promotion and Admission of Investment”, and its implications for decisions taken under the Investment Canada Act. As a substantive obligation, Article 3 compels each party to encourage investments from the other party, and to admit such investments as its laws permit. While apparently innocuous, the impact of this obligation is a bias towards approving investments that risk threats to our national security, or are of marginal or negative net benefit to Canada, given that no published criteria or processes to determine net benefit or national security exist in Canadian law.

This aspect is of particular relevance and urgency given the pending takeover of Nexen by the Chinese National Offshore Oil Company (CNOOC), and the subsequent flood of investment by Chinese state-owned enterprises (SOEs) that is poised to follow. The ratification of this Agreement must inevitably result in any such takeover being viewed favourably, despite the stated opposition of a large majority of Canadians. Parliamentarians must be allowed to debate these implications.

Further to this point, and the unique challenges posed by the operation of SOEs and massive amounts of Chinese state capital in Canada, it is crucial that we collectively pause to consider the wisdom of granting such SOEs favourable access to investor-state arbitration and dispute resolution mechanisms. Even when restricted to strictly commercial enterprises, such mechanisms have a profoundly destructive and chilling effect on Canadian democracy, as has been aptly demonstrated by the Canadian experience with NAFTA Chapter 11 and the ability for US corporations to overturn Canadian laws.

Yet however troubling has been our experience with NAFTA Chapter 11, granting similar access to investor-state arbitration to Chinese SOEs promises to be exponentially more damaging. Any doubt about the interests for whom such enterprises operate was effectively removed this past May, as the Chairman of CNOOC exclaimed, “Large-scale deep-water rigs are our mobile national territory and a strategic weapon.” While such an admission is hardly surprising, it must lend additional weight to the urgency of this request before you, as we are mere days away from such an unaccountable and potentially hostile entity being granted the ability to overturn laws or decisions made by democratically elected Canadian Parliamentarians. If anyone imagines that the implications of such power are benign, they should consider China’s recent move to claim 3 Billion Euros in damages from Belgium, due to the failure of one of its investments in that nation.

As a specific example, should the Canadian public at some point decide that our fossil fuel wealth should be best preserved for domestic use, for any reason whatsoever, Article 33(2)(c) of this Agreement binds the Canadian state to restrict domestic access to fossil fuels in equal measure to those restrictions placed on exports to China. In addition, the national treatment provisions would prevent any level of government, municipal, provincial or federal from setting any conditions to favour Canadian materials or Canadian workers for projects within Canada.

Mr. Speaker, given the urgency and gravity of what is at stake, and the opaque and inherently undemocratic means through which it is poised to be carried out, Canadian Parliamentarians must have an opportunity to discuss this agreement before it is too late. With all due respect, if anything has ever been a Parliamentary emergency requiring a timely debate in the House of Commons, this pressing matter clearly is that moment. I humbly request an emergency debate.

Sincerely,

Elizabeth May O.C., M.P.
Member of Parliament for Saanich-Gulf Islands
Leader of the Green Party of Canada

The post Letter to Request Emergency Debate on Canada-China Investment Deal appeared first on Elizabeth May.

We have two looming deadlines coming up. One is the proposed takeover of Nexen by the China National Offshore Oil Corporation, and the other is to see the fine print of the deal that the Prime Minister signed with President Hu of China just this September 8, when he was in Russia.

Under such an investment deal, CNOOC may have more rights than Nexen did to challenge environmental laws.

When will we see the fine print of the investment deal and will we see it before the Nexen deal gets approved?

Hon. Christian Paradis: Mr. Speaker, as I said earlier, the proposed transaction of Nexen will be scrutinized very closely. Our job here is to ensure that it provides a net benefit for Canada. This is what we will do.

I want to reiterate that our policies will always ensure that this is good for the economy, job creation and will not hurt Canadian families, as is proposed by the other side of the House.

The post Oral Questions – Foreign Investment appeared first on Elizabeth May.

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.”

The post Why I think we are absolute idiots if we approve CNOOC take-over of Nexen appeared first on Elizabeth May.