It is a bit surprising that articles such as this should be published in the
Globe a paper that touts itself as Canada's #1 daily business newspaper.
Cheers, Ken Hanly
The Globe & Mail
April 9, 2001
How Free Trade Threatens Democracy
by Michael Valpy
Why protesters are going to Quebec City:
They're going to be marching on the streets at Quebec City's Summit of the
Americas within a couple of weeks because, among other things, they oppose
"investor-state rights." To free-trade critics, nothing more starkly
illustrates the imbalance of power that transnational corporations have
acquired over democratically elected governments.
The investor-state rights provision, Chapter 11, of the North American
free-trade agreement, permits corporations to challenge governments'
sovereignty to make policy regarding public health, the environment, labour
standards and other public services.
Chapter 11 permits corporations to sue a foreign government -- claiming
compensation for lost and future business -- on the grounds they have been
denied "fair and equitable treatment" by government policy alleged to be
tantamount to expropriation of their investment. The disputes are decided
upon by tribunals that conduct their proceedings in camera.
While the Canadian government has stated its intention to oppose the
inclusion of similar language in the proposed free trade area of the
Americas, it is the fear of critics that Canadian objections will be hollow.
Many corporations, including Canadian corporations, see investor-state
rights as significantly beneficial in developing new hemispheric business
opportunities.
Here is how Chapter 11 works:
The U.S. Ethyl Corp. sued the Canadian government for $250-million (U.S.)
and obtained, in 1998, a settlement of $13-million for the government's ban
on the gasoline additive MMT, labelled a known nerve toxin by reputed
scientists. The ban was reversed.
In 1998, U.S.-based S. D. Myers Inc. filed a claim for more than $10-million
against the Canadian government for losses it claims to have incurred during
an 18-month ban on the export of PCB wastes from Canada. The government says
it imposed the ban in accordance with international conventions on disposal
of PCB wastes to which it says the company did not adhere. The case is
before a court.
California-based Sun Belt Water Inc. is suing Canada for the decision of the
British Columbia government to refuse consent for the company to export bulk
water. Sun Belt's president, Jack Lindsay, has declared: "Because of NAFTA,
we are now stakeholders in the national water policy of Canada."
The U.S.-based Pope and Talbot lumber company, which has operations in B.C.,
is suing for $510-million in damages, alleging discrimination in government
quotas set on softwood lumber exports to the United States -- ironic, given
that U.S. softwood lumber producers are claiming that Canadian softwood is
unfairly subsidized.
U.S.-based United Parcel Service is claiming $230-million damages against
the Canadian government, alleging that Canada Post provides unfair
competition through its Purolator courier service. The Canadian Union of
Postal Workers and the Council of Canadians have applied to a Canadian court
to take jurisdiction away from the tribunal, arguing that constitutional
Charter rights of Canadians are at stake and secret trade tribunals violate
the independence of the Canadian courts to protect those rights.
Will the governments of Mexico and the U.S., Canada's partners in NAFTA,
agree to narrow the interpretation of the investor-state provision? Will
language in the draft FTAA text assure sovereignty for democratic
governments? How much influence do corporations have on their governments?
The public doesn't know. Which is why there will be protests.
