The article below is about our sovereignty. There is so much more on the table than money
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Tearing up NAFTA? Please start with Chapter 11
By Michael Harris.
Canada has been sued 41 times under the investment provisions in NAFTA, more than any partner. While the United States has yet to lose in decided or settled cases, Ottawa’s record is middling — nine wins, eight losses. If the federal government were a hockey team, it wouldn’t make the playoffs.
The brigandage of Bilcon, all of it legal, is upon us.
Commencing on February 19 and running through to February 27, this U.S. Corporation will try to convince a three-person Permanent Court of Arbitration (PCA) that Canada owes it almost half a billion dollars in damages. The same court ruled last year that Canada had in fact “misbehaved” in its treatment of the Delaware company by rejecting its project back in 2008.
In a nutshell, here is what happened. Bilcon wanted to crush basalt from a site in Nova Scotia and then ship it by sea to New Jersey. The 50-year project was rejected by a joint federal/provincial environmental panel in Canada. The U.S. company contends that the panel’s decision created $500-million worth of damages to the American cement company. It is now trying to recover those alleged losses through NAFTA’s chapter 11 process.
Let’s move from nutshell to just plain nuttiness. Under NAFTA’s so-called Investor State Dispute Settlement process, all domestic laws and regulations in the U.S., Canada, and Mexico must rise to certain levels of what is quaintly called “fairness.”
In plain language, here’s what that means: any of a member country’s laws or regulations can be trumped by foreign corporate interests should a court, where two judges comprise a majority, find in the plaintiff’s favour.
There is no appeal of its decisions, which are 100 per cent driven by a mere trade agreement.
And, oh yes, the court meets behind closed doors.
Green Party leader Elizabeth May used one word to describe that shameful but strategic secrecy: “outrageous.”
How crazy is the Bilcon situation? Depending on what the PCA decides, every Canadian might have to pony up $15 to pay off the U.S. company. And all because a representative panel of duly-elected governments in Canada opted to protect marine life, rather than stand up for New Jersey’s right to Nova Scotia basalt, no matter what the cost to this country’s living species or environment.
Under the Canadian Environmental Assessment Act, the Joint Review Panel (JRP) generally determined that Bilcon’s project was a danger to the area’s richly diverse marine ecosystem, and several endangered species. The NAFTA tribunal rejected the JRP’s finding, accusing it of improperly assessing the environmental impact of the proposed quarry. That’s odd. The same thing could be said of Bilcon when it was applying for project approval.
Bilcon wanted to build the terminal for its basalt quarry near Digby Neck, facing the Bay of Fundy. That spot was just over the “horizon” from the Critical Habitat Area for the right whales, as Mark Dittrick, put it. Dittrick is the founding chair of the Atlantic Canada chapter of Sierra Club Canada.
The company insisted that environmental concerns were uppermost in the planning for its proposed quarry. If so, it had a strange way of showing it.
Although the company put together an ostensible Right Whale Mitigation Plan, they managed to do so without ever retaining a marine mammal expert. One of the experts that the company did identify as “doing a lot of marine work for us,” Mike Brylinski of Acadia University, is not a marine mammal expert. He’s a limnologist.
A limnologist is an expert in fresh water, especially rivers and lakes. Although Brylinksi did author five studies for the Environmental Impact Study for Bilcon’s quarry, something big was missing. Here is how Mark Dittrick described that shortcoming:
“Brylinksi wrote nothing on right whales or any marine mammals. There were studies on everything from butterflies to Harlequin ducks. None of the 36 Reference Documents in the EIS were about right whales or any species of marine mammals – because Bilcon didn’t have anyone on staff or under contract who could do it.”
When whale expert Paul Brodie wrote that “a high level of caution is necessary in planning any long-term industrial venture within or proximate to [North Atlantic right whale] habitats,” and “that no reasonable assessment panel would approve the project,” Bilcon ignored his advice as “unscientific.”
They also ignored another expert, Chris Taggart of Dalhousie University, who concluded that Bilcon’s proposed shipping route for their 40,000 ton capacity bulk carriers was far from safe for right whales. The company’s ostensible reason was that Taggart’s 23-page submission had not been “peer reviewed.”
The problem with that quibble? None of the 36 studies commissioned by Bilcon to support the project were peer-reviewed either.
The person who wrote Bilcon’s EIS, and whom the Sierra Club chair describes as the company’s “de facto” marine mammal expert, was David Kern. Dittrick describes Kern as a “landscape architect and artisanal beef cattle raiser….”. For the record, Bilcon claimed that Kern was just liaison between whale experts and Bilcon, not a whale expert himself.
So why is this high stakes game of legal poker between Bilcon and the government of Canada so important — besides the fact that the public is putting up Ottawa’s huge pile of chips? Two words really. Democracy and sovereignty. Both are there to be won or lost.
If Bilcon gets some or all of the damages it is asking for, Canada will be seriously diminished. That is what Ottawa has essentially argued in this long, drawn out case. An award to Bilcon would in effect usurp the exclusive right of Canadian courts to determine whether or not the Joint Review Panel departed from Canadian law in the decision it reached on Bilcon’s quarry.
Untangle the fishing line and it comes down to this: If Bilcon wins a big award, a NAFTA tribunal will have successfully told the federal government to go to hell. As experts like University of Ottawa law professor Donald McRae and Scott Sinclair of the Canadian Centre for Policy Alternatives have pointed out, the villain of this piece is NAFTA’s arbitration panels.
These panels are undergoing mission creep — moving from economic adjudications under NAFTA to replacing domestic court decisions and shoving aside Canadian public policy.
Sadly, Bilcon is not a one-off. Canada has been sued 41 times under the investment provisions in NAFTA, more than any partner. So far that has meant $219 million in payouts, and another $95 million in what Scott Sinclair calls “unrecoverable legal costs.”
While the United States has yet to lose in decided or settled cases, Ottawa’s record is middling — nine wins, eight losses. If the government were a hockey team, it wouldn’t make the playoffs.
It’s time for Canada to dump Chapter 11 as it currently stands in any renegotiated NAFTA deal. There is so much more on the table than money