The China National Offshore Oil Corp (CNOOC), one of three companies controlled by the Chinese government, is putting pressure on the Government of Canada to approve the purchase of NEXEN, an oil and gas company based in Calgary. NEXEN has worldwide operations located in Alberta’s Athabasca oilsands region, the North Sea, Columbia, and the Gulf of Mexico. If this deal gets approved, Alberta and British Columbia (BC) will lose more provincial powers and environmental rights than is being revealed.
Although investors have already approved the deal, it now has to be ratified by the Government of Canada which might be a challenge considering there is growing opposition not only from Canadians and our federal political opposition parties, but also from powerful political forces in the U.S. citing “security risks” supported in the article U.S. Deems Chinese Canadian Energy Purchase National Security Risk
Private shareholders and China will benefit most from this deal, as it will boost China’s presence in Canada’s energy markets increasing Chinese investment by a whopping 49 billion compared to their current 3.5 billion in U.S. acquisitions. Although China is urging Canada not to turn this business deal into a “political” issue, there is concern and a warning from our own intelligence agency CSIS about security risks this deal might impose. In The Canadian Press report NEXEN Deal: CSIS Warns Foreign Takeover Could Pose National Security Threat From China
, it is assumed the risk will be greater if approved.
China and Canada have very different political and economic systems as well as environmental standards that could potentially be problematic. This is most likely why the environmental laws have been either deleted or changed to the point of being unrecognizable, lax, and regressive, indicated by the quick passing of Bill C38.
Canada’s largest citizens’ organization The Council of Canadians, strongly urges that Canadians demand parliamentary hearings regarding the Canada-China investment pact. In the ACTION ALERT: Demand a debate on Canada-China corporate rights pact
, Canadians are encouraged to become more proactive. The Canada-China treaty between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments is defined as a “bilateral investment treaty”. This means that corporate rights will allow companies to sue governments when it is perceived that their investments or profits have been “undermined by public policies, including public health or environmental measures or by delays to energy and resource projects.”
Maude Barlow, National Chairperson of the Council of Canadians, explains, “It’s up to private arbitrators outside of Canadian courts and with very little accountability to decide if the investor’s rights have been upset. These treaties say nothing about democratic rights, human rights or Indigenous rights. A government cannot sue a company under the treaties if that company has done wrong, or is failing to meet its promises. They are one-sided corporate rights pacts where the outcome is decided by lawyers and judges with a perverse vested interest in deciding in favour of the companies, since it guarantees there will always be more work down the road, more work suing governments that is.”
Once established in Canada, Chinese energy companies will “threaten the federal, provincial or territorial governments against imposing environmental rules on tar sands production, pipeline construction and other projects. Delays or denials on energy and mining investments could result in costly lawsuits outside Canada’s courts, which will be settled by unaccountable private arbitrators with a vested interest in the outcome.” Considering this unfavorable result may soon be a reality, there is a need for greater public scrutiny prior to the deal approval.
Barlow warns that Canada’s Foreign Investment Promotion and Protection Agreements (FIPPA) will not be good for Canada especially since the Canada-China investment treaty invites multi-million dollar lawsuits against environmental measures
. “The FIPPA won’t wipe-out Indigenous rights or other protections, and there are supposed to be exclusions in the treaty for environmental or resource conservation measures. But these are very weak exclusions and Chinese firms will be able to claim millions if not billions in compensation from the federal government in disputes against delays or cancellations of their projects, or against what those firms consider too onerous environmental, resource conservation or public health measures. Around the world resource companies are using investment protections in agreements like this FIPPA to frustrate government attempts to better control energy and mining projects. It’s a matter of when, not if, a Chinese firm uses their investor rights to challenge any future Canadian policies that interfere with their tar sands and pipelines ambitions,” continues Barlow.
Additionally, it’s questionable whether Canadian entrepreneurs doing business in China will have the same rights there as the Chinese have here due to China’s different political and economic structure.
Once the NEXEN deal is approved, Chinese companies can sue British Columbia for changing course on Northern Gateway, says policy expert (Vancouver Observer)
. Furthermore, the bilateral treaty will protect the rights of investors for the next 31 years, stopping any future governments that want to fight for the rights of Canadians. The controversial state arbitration clause (Article 28) in FIPPA allows for a three-person tribunal to judge cases of the investor-host country but transparency, especially for the public and provinces of Canada, won’t be allowed in favor of China’s national profits.
Barlow adds, “Canada negotiates all its trade agreements and foreign investment protection agreements in secret, and there is never any real possibility to comment or change the treaties before they become law. In this case, where the consequences for tar sands and energy development are so severe, we demand that the treaty be debated, changed and ideally thrown out. We don’t need these treaties to attack investment to Canada. All they do is get in the way of proper regulation and control of energy and resources. They remove barriers to corporate profit and put them up to the public good.”
Any government with an interest in the well being of its people and the environment would not ratify this deal hastily if at all without the input of its citizens, the 99%. Consultation from the provinces, territories, and First Nations should be part of the democratic process before it is approved otherwise, the NEXXEN-CNOOC deal will be nothing more than a blatant “sell-out” of Canada’s natural resources and major economic source. As Canadians, we definitely have democratic rights worth fighting for before this deal becomes a reality.
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