If you want to know why TTIP would be a nightmare, look what just happened in Canada

If you want to know why TTIP would be a nightmare, look what just happened in Canada

Date: 25 March 2015

If anyone tries to convince you that TTIP is no threat to a government’s ability to protect its people, just point them to Canada. Last week, Canada’s government was successfully sued for daring to turn down a large mining quarry which threatened to cause environmental damage in Nova Scotia.

It is the latest in a long line of cases which have been brought against Canada, for attempting to introduce environmental protection, under the North America Free Trade Agreement (NAFTA). And these cases have been brought about under exactly the same mechanism – known as ISDS (Investor State Dispute Settlement) – which is at the centre of the TTIP deal.

ISDS is essentially a corporate court system – allowing foreign corporations to sue governments in secret tribunals, overseen by corporate lawyers, with no right of appeal. Even losing can cost a country a small fortune.

The most recent ruling focuses on Canada’s decision, following an environmental review, to block a 152-hectare basalt quarry in Nova Scotia, which happens to be a key breeding area for several endangered species, including rare whales. US corporation Bilcon wanted to open the quarry and argued that it had put time and money into the development. The environmental review, however, found that the project clashed with “community core values”.

The company argued that the Canadian government shouldn’t even have resorted to an environmental review and is now seeking $300 million in compensation.

Two aspects of this case prove what critics have always said about these corporate courts. First, the case didn’t relate to a breach of contract or to discrimination in favour of a domestic company. It simply related to a regulation which a foreign corporation didn’t like.

Second, the case is a challenge to Canada’s ability to make decisions based on environmental protection, as pointed out by the dissenting voice in this tribunal. Donald McRae warned: “a chill will be imposed on environmental review panels which will be concerned not to give too much weight to socio-economic considerations or other considerations of the human environment in case the result is a claim for damages under NAFTA”. He continued the ruling “will be seen as a remarkable step backwards in environmental protection” and a “significant intrusion into domestic jurisdiction.” 

Canada has been sued for environmental protection regulations again and again. Previous cases include Canada being taken to task for attempting to ban the import of toxic waste and for trying to prohibit dangerous chemical MMT from petrol. In the latter case, Canada reversed its ban.

Only days before the Bilcon ruling, Canada had an award made against it for a regulation which required oil giant Exxon Mobil to invest some of its profits from offshore drilling in the local economy. It has been suggested that unless the requirement is withdrawn, this will be the tip of the iceberg in terms of ‘compensation’ – another example of a completely moderate and sensible government regulation being threatened by unelected, unaccountable corporate lawyers. 

It is often claimed that these corporate courts ‘only’ effect developing countries with dubious standards of law. That would be bad enough, but Canada is not a developing country, yet has lost millions of dollars to these corporate courts after signing an investment deal like TTIP with the US. These cases should be instructive to European governments.

The European Commission is keen to tell us that they are reforming the corporate court procedure for TTIP, so there’s no need to worry. But from what we’ve seen of such reforms to date, they may actually make matters worse. Veteran investment arbitrator Todd Weiler said of the reformed system: “I love it, the new Canadian-EU treaty…we used to have to argue about all of those [foreign investor rights]…And now we have this great list. I just love it when they try to explain things.”

In a ground-breaking report, the House of Commons Business Select Committee came out today saying it wasn’t convinced of the need for the corporate court system. ISDS is also opposed by the Labour Party, the SNP, the Green Party (who in fact oppose the whole deal) and 97% of respondents to a recent Commission consultation. It has recently been flagged by a number of US Senate Democrats as a reason to oppose TTIP. 

Canada shows why it’s important that all these politicians stick to their guns. The corporate court system fundamentally challenges our ability to protect the environment. However you reform it, it has no role in a democratic society.

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Image: Angula Berria/Flickr