Why Trudeau supports ISDS: protecting Canada’s mining sector
18 May 2018: A new book by Canadian writer Joyce Nelson, Bypassing Dystopia: Hope-filled Challenges to Corporate Rule, gives insight into the Canadian government’s dogged support of Investor State Dispute Settlement (ISDS). It has been reviewed by journalist Damien Gillis here.
Joyce notes that suggestions to remove ISDS from trade agreements is often a ‘deal-breaker’ for Canada. Trudeau also insisted that the Canada-EU Comprehensive Economic and Trade Agreement (CETA) must include ISDS, and last year a trade negotiator from Canada’s NAFTA team told The Washington Examiner that Canada ‘would refuse any changes to the existing [ISDS] system’.
Canada has already been sued 41 times under the ISDS chapter in NAFTA, which has cost the country more than $300 million. So why would Trudeau and Canada support ISDS clauses so vehemently?
Joyce suggests it has to do with their close relationship with the Canadian mining and energy sectors. She points to a 2017 Corporate Europe Observatory (CEO) report, Gold-Digging with Investor-State Lawsuits, which notes that ‘62% of the 55 ISDS cases that involved a Canadian investor until 2015 were in the resource or energy sectors’. In the global ‘arbitration game’, companies – increasing backed by hedge fund money – are using ISDS clauses to bully governments over policies that undermine their profits at increasing rates.
Joyce notes that over 60% of the world’s mining and energy companies are based in Canada, ‘operating more than 8,000 mining sites in over 100 countries’. According to her sources, Canada is fifth in the world for lawsuits relating to ISDS – and these are led by these sectors. However, many countries are resisting ISDS, and Joyce discusses different forms of resistance to the ‘arbitration game’.
This book is a timely reminder of the dangers of ISDS in the TPP-11 of which Canada is a member. Ratification of the TPP-11 would expose future Australian regulation of mining and energy to ISDS cases from Canadian companies.