NAFTA QUEBEC FRACKING ISDS
TRUMP (State of the Union): “Our
nation has lost its wealth but we are getting it back so fast.
The era of economic surrender
is over. From now on, we expect trading relationships to be fair and to be
reciprocal.”
PATRICIA SABGA: On the campaign trail, upon taking office, right up to his recent
State of the Union Speech, President Trump has been consistent about what he
calls America’s “bad trade deals.” And that includes the North American Free
Trade Agreement … NAFTA.
The 1994 pact allows goods and services to move
more freely among and between america, canada and mexico. But critics
say it also threatens each country’s national sovereignty … its ability to
govern and enforce its own laws.
There’s a provision in nafta
and thousands of trade agreements called investor state dispute settlement, or isds. It allows foreign investors to sue governments for
passing laws or regulations that could harm the value of their investments.
Geoffrey Gertz is an ISDS scholar with the Brookings
Institution. He says ISDS was created in the 1960s to protect foreign investors
from governments taking control of their assets.
GEOFFREY GERTZ: If we can think back to original ISDS, the kinds of disputes they
often had was, you know, a nationalist government's coming in and saying, you
know, "Foreign investors, we are taking over this mine, you know, it is
ours. We're kicking you out of the country. We might be throwing you in
jail."
PATRICIA SABGA: Today, a growing chorus of critics say companies are often using isds for a very different purpose. One of them is an oil
and gas company called lone pine resources. It had plans to begin fracking in
Quebec, Canada.
Seven years ago citizens turned out by the
thousands in montreal
to demand an end to all fracking in quebec for at
least a generation.
Lone Pine, meanwhile, had obtained permits to
begin drilling beneath the St. Lawrence River.
The protests culminated in Montreal following a
march of more than 400 miles from small town to small town to garner support.
And get the attention of the Canadian government.
The march was organized by this man -
grassroots activist Philippe Duhamel.
PHILIPPE DUHAMEL: They had plans to drill 12 thousand wells around this area, the St
Lawrence Valley in Quebec. I took out my savings to organize it. Because there
was this urgency and no time to fundraise.
PATRICIA SABGA: So you spent your own money to organize this citizen’s march?
PHILIPPE DUHAMEL: Yeah, yeah and a few other people including my father. When we got
to Montreal. Faces are pure light. Pure delight. Because again you can feel
that history’s on your side and you’re winning
PATRICIA SABGA: As the protesters converged on downtown montreal,
the activists did win a partial victory. The quebec
government adopted and later passed a bill that temporarily banned fracking
beneath the St. Lawrence river.
To the protesters, it may have seemed like their
victory was sealed. But it marked the beginning of a much bigger fight.
That’s because oil and gas firm lone pine resources lost its permits to
frack beneath the St Lawrence. So it decided to use NAFTA’S Investor State
Dispute Settlement provision to fight back.
It could do that because though it’s based in
Canada, Lone Pine is incorporated in Delaware which technically makes it a
foreign investor And under ISDS, foreign
investors can sue national governments for damages. So lone pine sued canada. Lone Pine had received no compensation for the
money it had spent obtaining its permits -- or for the potential profits it
hoped to reap.
So in 2012, the company filed a lawsuit claiming
the act revoked its permits was “a clear
violation of canada’s obligations under nafta.” Six years on, the case is still pending and the
company is seeking roughly 90 million dollars in damages.
But these investor state disputes don’t play out
openly in a domestic court. They’re arbitrated behind closed doors by a
tribunal of corporate lawyers, and whatever they decide is final.”
In a statement to Newshour
Weekend, Lone Pine’s legal counsel said quote: “Lone Pine's argument is that
the [Canadian] government acted for political expediency rather than
environmental protection.”
Duhamel is outraged by the
suit, which he says impinges on canada’s right to
protect its environment, by allowing a foreign investor to potentially
undermines the government’s ability to determine
its own laws.
PHILIPPE DUHAMEL: This investor has rights that are supranational. When did that
happen? When did we renege the power, our sovereignty? We’ve been robbed
of our power to create our own laws.
PATRICIA SABGA: That concern has landed progressives like duhamel
on the same page as the trump administration. U.S. trade representative Robert Lighthizer worries that America’s right to determine its
own laws could be undermined by similar suits. He voiced his concerns to
congress last year.
ROBERT LIGHTHIZER: “I am troubled by the sovereignty issue. I’m troubled by the fact
that anyone, anyone can overrule the United States congress and the United
States when it’s passed a law. That is troubling to me.
PHILIPPE DUHAMEL: Canada and Mexico don’t appear to be as concerned as the trump
administration and they reportedly want to keep and update NAFTA ISDS
provision.
PATRICIA SABGA: So do more than one hundred U.S. business and industry
associations. They sent this letter to the Trump administration claiming
that Investor State Dispute Settlement has been highly beneficial to the United
States”
Linda Dempsey is with the National Association
of Manufacturers.
LINDA DEMPSEY: What ISDS does is ensure that the same basic rules that we have
in the United States are available for our manufacturers. Let me give you an
example. We had one manufacturer with a paper mill in Canada. The Province of
Newfoundland decided to end its contracts, seize some of the property up there,
and leave that manufacturer high and dry.
The only recourse that company had after all
that investment, investment that supports its US workforce, supports its
bringing US product into Canada; it was gonna lose all
that without ISDS. And so that's why we need ISDS, as a backstop. And it
has been used, I think, very responsibly.
PATRICIA SABGA: As for cases pursued against the United States, Dempsey and
supporters of the clause point out that companies have sued the U.S. Under
NAFTA fewer times than they’ve sued Canada and Mexico and when America has
been sued, it has so far never lost a case. Therefore ISDS is not a
threat to the U.S.
BEN BEACHY: We can’t expect to
dodge that bullet forever.
PATRICIA SABGA: Ben Beachy heads the Sierra Club’s trade program, which has fought
against ISDS for decades.He says the trade clause
threatens democracy by placing tribunals -- predominantly made up of corporate
lawyers -- above governments.
BEN BEACHY: “It may well be possible
to use such protections…”
PATRICIA SABGA: Beachy argues corporations are using the threat of ISDS lawsuits
to pressure governments not to enact regulations in the first place.
He showed us this webpage from a law firm which
advises multinational corporations. It describes ISDS as a tool companies can
use to exert influence over the regulatory process.
He also pointed to this study by researchers at toronto’s york university. They
conducted 51 anonymous interviews with current and former officials and
insiders in Canadian environment and trade ministries. The study’s top finding
-- government ministries have changed their decision-making to account for
trade concerns including ISDS.
BEN BEACHY: Time and again these government officials said YES, and in fact
named NAFTA cases, ISDS cases as one of the principal sources of litigation
that affected their policy making.
LINDA DEMPSEY: Are they taking into account trade agreements? Sure, because tho-- and we want them to, because those are the same basic
rules our own Constitution requires, and we wanna
make sure our investors aren't cheated, aren't treated unfairly, aren't--
harmed by foreign governments.
PATRICIA SABGA: Both Philippe Duhamel and the Trump administration will be
keeping a close eye on ISDS, as the current NAFTA negotiations continue.
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