by Douglas Zannis Wylie
Let’s begin with Ricker Mercer’s Rant from two years ago on the newly ratified Chinese FIPA gives an excellent base to our topic.
To expand upon Mercer’s words, FIPA stands for Foreign Investment Promotion/and Protection Agreement, and are routine trade agreements between countries in order to promote prosperity and investment between the signing parties. Canada has a total of 28 (1) agreements now as the Chinese one was ratified on Ocotber 1st, 2014. This particular FIPA has clearly been the point of much controversy since its inception in 2014. First, let’s expand on the main points of contention of this FIPA:
1) It’s 15 years minimum before we can cancel the agreement, a 1 year notice period after that , and then an additional 15 years of coverage for Chinese assets after termination. 31 years total before we can leave this agreement while in comparison NAFTA only requires 6 months notice.(6)
2) Chinese companies will now have the power to sue over legislation that could negatively affect their investments in Canada. Furthermore these arbitrations will take place between a Canadian representative and two non-Canadians, one Chinese, and one from the World Bank. We’ll return to these points afterwards.(6)
3) The agreement was signed behind closed doors between Canada and China, in Russia, and was not brought to council or voted upon. Furthermore the arbitration of the lawsuits will be done secretly and will not release the details to the public.(6)
There are valid arguments to be made for and against these points, such as for point 1, a 31 year contract isn’t too long if you are referring to long-term investments; oppositely we’re locked into this deal for 31 years when our own government is restructured every 4 years. Even point 3 could be defended in that the public doesn’t need to know the details of such arbitration, even though Harper based much of his platform during election time on governmental transparency.(3)
The power to sue over legislation however is the real point of contention and is where we finally get to the relevance of the topic of this post. There exists a process called Environmental Assessment, in which experts consider and model the effects of a proposed project on the surrounding environment and its future effects. These assessments are crucial to ensure that the project meets the environmental standards set by environmental legislation.
As it stands, the assessment process, beginning in 1972, has progressed slowly and is far from perfect, many aspects of it are still only partially completed, or are being bypassed entirely.(2) A more rigorous assessment means minimizing damage done to the environment in the present and future and improved mitigation techniques to control possible harming effects to human lives. Now with this newly signed FIPA, if the Canadian Environmental Assessment Agency tries to enact stricter regulations on oil extraction, or elongate the assessment process so that proper modeling of potential risks can be completed, Chinese companies have the legal right to sue to recoup damages incurred by the strengthening of our own countries environmental protection.
It has been hard to stay impartial (or at least somewhat) throughout the critique of this agreement, but considering China has a large investment in our energy sector, for example Nexen Inc. being bought by CNOOC last year, and are only continuing to grow(4), isn’t it clear that giving China this power could significantly hinder any progress to the assessment process, progress that has already been sluggish and incomplete. Why is Harper bent on ruining the Canadian environment, something that used to define the Canadian persona, does he really want for his lasting legacy to be that of an environmental protections disaster? All indications seem to be yes.
Looking a little nervous mister Prime Minister, heavy conscience?(3)
Here are some external links for further reading :
An opinion letter voicing FIPA concerns, written by an international trade expert sent to Harper: http://thetyee.ca/Opinion/2012/10/16/China-Investment-Treaty/
The official FIPA agreement page: http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fipa-apie/china-text-chine.aspx?lang=eng
(1) Foreign Affairs, Trade, and Development (2012) Agreement Between the Government of Canada and the Government of the People’s Republic of China for the Promotion and Reciprocal Protection of Investments. Retrieved from http://www.international.gc.ca/trade-agreements-accords-commerciaux/agr-acc/fipa-apie/china-text-chine.aspx?lang=eng
(2) Gibson, R. B. (2002). From Wreck Cove to Voisey’s Bay: the Evolution of Federal Environmental Assessment in Canada. Impact Assessment and Project Appraisal, 20(3), 151-59.
(3) Gordon, S. (2014). Don’t Fear the FIPA. Retrieved from http://www.macleans.ca/economy/economicanalysis/dont-fear-the-fipa/
(4) Jones, J. (2014). China is Still Purchasing Canadian Oil Assets-Just Smaller Ones. Retrieved from http://www.theglobeandmail.com/report-on-business/industry-news/energy-and-resources/china-is-still-purcashing-
(5) Van Harten, G.(2012). Taking apart Tories’ Party Line on China-Canada Treaty. Retrieved from
(6) Van Harten, G.(2012) China Investment Treaty: Expert Sounds Alarms in Letter to Harper. Retrieved from http://thetyee.ca/Opinion/2012/10/16/China-Investment-Treaty/canadian-oil-assets-just-smaller-ones/article19274478/