November 12, 1998

 

 

A

SUBMISSION

TO THE 19TH SESSION

OF THE

COMMITTEE ON ECONOMIC, SOCIAL AND CULTURAL RIGHTS

CANADIAN CIVIL SOCIETY PERSPECTIVES

ON COMMITTEE QUESTION 3 TO CANADA:

"What is the opinion of federal, provincial and municipal Governments as to the effect of current or proposed trade and investment agreements such as the North American Free Trade Agreement, the Free Trade Agreement of the Americas and the Multilateral Agreement on Investment on their ability to fulfill obligations under the Covenant and what processes have been put in place to review these questions?" from E/C.12/Q/CAN/1 10 June, 1998.

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Note: this submission was prepared for the Ad Hoc Canadian NGO Committee on Human Rights and Investment by Dr. John W. Foster, Ariel F. Sallows Professor of Human Rights, College of Law, University of Saskatchewan. (1) It was prepared after receipt, November 6, of the Canadian Federal and Provincial (partial) responses to the Committee’s list of issues.

 

 

 

 

 

 

CANADIAN CIVIL SOCIETY PERSPECTIVES ON COMMITTEE QUESTION 3 TO CANADA:

"What is the opinion of federal, provincial and municipal Governments as to the effect of current or proposed trade and investment agreements such as the North American Free Trade Agreement, the Free Trade Agreement of the Americas and the Multilateral Agreement on Investment on their ability to fulfill obligations under the Covenant and what processes have been put in place to review these questions?" from E/C.12/Q/CAN/1 10 June, 1998.

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The purpose of this brief examination is:

* to indicate the current inadequacy of the responses of the Federal and most Provincial governments to the Committee’s Question 3 (2)

* to provide examples of the deep concern of Canadian social, citizen’s and non-governmental organizations with regard to the issues raised by Question 3

* to encourage the Committee to invite much more thorough examination and response to Question 3 on the part of the Canadian government, with full consultation of social, citizens and non-governmental organizations, as well as consideration of the impact on human rights internationally of Canada’s actions in this regard

* to encourage the Committee and the United Nations Human Rights "system" to undertake comprehensive and participatory study of the implications of the new generation of trade and investment treaties and institutions (FTA, NAFTA, WTO, proposed MAI, FTAA, APEC, etc.) for the ability to fulfill obligations under the Covenants and other relevant human rights treaties.

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INTRODUCTION

The appropriateness of the Committee’s concern.

The posing of the broad question of the implication of the new generation of trade and investment agreements in the context of the Committee’s review of states-party is timely if not overdue.

In the case of the non-governmental and social movement community in Canada it resonates with questions that have emerged over the past twelve years as Canada has moved from the bilateral Free Trade treaty with the United States, the NAFTA and WTO agreements and into leadership in negotiations for a Multilateral Agreement on Investment and a Free Trade Agreement of the Americas, as well as continuing participation in the Asia-Pacific Economic Cooperation process. Canadian organizations, through multilateral relationships with Mexican, American and other hemispheric organizations -- currently expressed in the Hemispheric Social Alliance, the APEC People’s Summit Process and the international network on the MAI, are keenly aware that their concerns are shared by a diverse and widespread multitude of academics, organizations and networks around the world. Work on human rights and investment undertaken by the Harvard Law School and the Kennedy Memorial Center for Human Rights in 1997 and the more recent development of a statement on the MAI by the International NGO Committee on Human Rights in Trade and Investment are useful cases in point. (3)

Canadian civil society organizations note that some of the issues which have been raised by them with their own and other governments are beginning to gain recognition and response, although only partially. The recent statement of withdrawal from OECD MAI negotiations by Prime Minister Lionel Jospin of France together with the results of the study undertaken by Catherine Lalumiere and Jean-Pierre Landau for the French parliament, the comprehensive hearings by the Special Legislative Committee on the MAI of the Legislative Assembly of British Columbia, Canada, the 1998 OECD Ministerial commitment to consult civil society on the MAI and the recent invitation for citizen comment by Trade Minister Marchi of Canada on behalf of the Committee of Government Representatives on the Participation of Civil Society of the FTAA are initiatives of differing importance but positive response to the concerns of civil society organizations. (4) This shift, while initial and partial, is to be actively encouraged.

At the same time Canadian civil society organizations have undertaken initiatives to ensure that the future regulation and accountability of investors and traders is not left to trade and investment experts, lawyers and proprietors alone. Through such initiatives as "Towards a Citziens’ MAI", Canadian organizations, together with international counterparts, are raising the question what regulatory frameworks, responsibilities and rights with regard to investment and investors would be coherent with existing human rights and other U.N. and international agreements. (5)

 

While concern regarding the proposed MAI has been actively expressed in recent months -- so forcefully that the negotiations toward an MAI are suspended -- the issues raised by the MAI are not limited to the fate of the OECD MAI negotiations. The MAI is in many ways the child of an existing, ratified and operating treaty, the North American Free Trade Agreement, and in particular of its Chapter Eleven on investment. It can be regarded as a statement of intent which if not accomplished in one forum will inform agendas in other forae. (6) While the OECD negotiations may be re-tooled or transferred to the WTO, it is quite possible that the NAFTA investment approach may be applied to a much larger number of countries through the negotiation of an investment chapter in the FTAA. At the same time a plethora of bilateral investment guaranteeing agreements have been, are and will be negotiated, not only by Canada but by a number of other countries. The issues raised by the MAI are relevant to the need to review and reform the NAFTA, to ensure that the proposed FTAA does not embody the same difficulties of the existing NAFTA investment chapter and the proposed MAI, as well as the need to shape any potential negotiations regarding investment in the WTO in the light of human rights, environmental and other normative frameworks.

It is therefore important not only that the Committee seek full and detailed answers from Canada, but that it continue to raise Question 3 and related questions in upcoming sessions with other reporting states-party, that it proceed toward an assessment and comment with regard to these issues itself and that it engage other relevant parts of the U.N., including but not only the human rights bodies, in addressing these issues.

Qualification

This brief examination is a selective survey, highlighting some initial areas for review and study. It is not the comprehensive examination that one might expect either of governments like the Government of Canada or of the Committee or other relevant United Nations bodies.

This examination focuses on Economic, Social and Cultural Rights, but many other United Nations Human Rights agreements are implicated and study of the implications for them is overdue.

This examination does not attempt to provide an adequate review of the considerable emerging case history and literature of the operation of the NAFTA labour and environmental side agreements and institutions which pertain to the ability to implement a number of Covenant commitments. Their developing history provide – as would comparative study of the institutions of the European Community – a basis for evaluation of the strength and the evident limitations of the engagement of Canadian governments to the safeguarding of fundamental rights in economic agreements.

The considerable secrecy with which trade and investment agreements have been developed (7) together with the far-reaching implications of these agreements have contributed to a retarded awakening of many human rights and civil society organizations to the potential impact of the new generation of agreements on existing human rights treaties. A small but growing number of civil society, policy research and academic bodies have begun to take up the issues, but time, encouragement and support are required to ensure that human rights are not marginalized or treated as an afterthought as trade and investment negotiations move forward with high governmental commitment of expertise and resources.

The international Forum on Human Rights (Vienna plus Five) meeting in Ottawa in June, 1998, through its working group on Economic, Social and Cultural Rights not only recommended that the draft MAI be rejected as "fundamentally flawed" but urged the UN to address the related issue of corporate responsibility in the light of human rights law, recommending in part that the UN and related bodies clarify and where necessary establish "standards and mechanisms for holding multinational and national corporations, and international and regional institutions of finance, trade and investment, strictly and fully accountable to international human rights standards." (8)

Thus our first recommendation is that:

R 1. The Committee ensure that a comprehensive study of the implications of the new round of trade and investment treaties for human rights be undertaken including consultation with relevant United Nations bodies, participation by civil society organizations, and adequate resources; that such a study include a review of international law on trade and investment to identify inconsistencies with human rights law; and that the study develop recommendations which will enhance the priority of international human rights standards in the development of international trade and investment agreements and the further development of mechanisms to guarantee their implementation and enforcement.

 

THE COMMITTEE’S QUESTION 3 AND THE RESPONSES OF CANADIAN FEDERAL AND PROVINCIAL GOVERNMENTS

Content

Federal government

The Federal response affirms Canada’s intention to recognize and seek to promote "the complementarity between economic growth through trade liberalization and the protection and promotion of human rights, good governance and other social values of Canadians." The specifics of the Committee’s inquiry are ignored. The possibility of a conflict between these objectives is also ignored. There is no indication of whether or how Canada evaluated the extent of complementarity or of conflict with regard to its existing human rights treaty commitments and trade and investment agreements it has ratified or those which it is seeking to negotiation.

Provinces

The Canadian responses (as received November 6, 1998) give rise to deep concern over the seriousness with which the Committee’s Question 3 has been treated and the adequacy of the examination of the issues involved by the relevant Federal and Provincial authorities.

The Provincial Government reports vary but remain extremely limited. No reply from Ontario, Canada’s most populous and richest province or Quebec to Question 3 is included in the material forwarded by the Federal Government. New Brunswick has "no recorded official position", Manitoba sees "no discernable effect", Saskatchewan replies "as yet, there has been no conflict evident".

Alberta is more thorough. It indicates its commitment to the NAFTA labour side agreement and the importance of "meaningful labour standards". It also indicates periodic review of its provincial labour regulations in the light of the Covenant, and provides detail on existing labour rights protections in Alberta.

Newfoundland appears to be open to the potential impact and conflict, "the broadness of the Covenant could result in a party attempting measures to fulfill the intentions of the Covenant which would be contrary to trade obligations", but doesn’t venture as to which regime might triumph.

Municipalities

On the issue of municipal opinion, while the Federal government is silent, one might more naturally expect the Provincial governments to include this matter in their reply. Newfoundland takes the opportunity to state that "municipal governments have no recorded official opinion on this matter". Other provincial responses are silent.

The Committee might inquire as to whether in fact Canadian municipal governments have ignored or been silent on the issue of the MAI, for example. This is by no means the case. The draft MAI embodies a series of issues of direct concern to municipal governments as pointed out by Canadian trade lawyer, Barry Appleton in his brief "Municipalities and the MAI" (9)

However, while no province relays it, municipalities have taken positions on the MAI and those positions have, in general, been critical and skeptical. A resolution of the Union of British Columbian Municipalities (September, 1998) recognized that the MAI "appears to directly affect municipalities and regional districts" through such terms as those dealing with expropriation. The Union asked the Premier of British Columbia to intervene to have the Federal government make a "permanent and explicit exemption in the MAI limiting its application to areas of federal jurisdiction".(10)

 

Process

The Federal response deals essentially with process and indicates that international agreements provoke a review for consistency with domestic legislation. This does not deal adequately with the question of ability to fulfill, although the government does indicate that they have an eye to "other international agreements" and seek promote complementarity "between economic growth through trade liberalization and the protection and promotion of human rights". Putting aside for the moment the issue of potential conflicts between these allegedly complementary objectives, it might be inquired whether the Federal government undertook a systematic review to assess if and if so how this complementarity and the ability to fulfill obligations under the Covenant have been ensured.

Responding to a similar written inquiry early in 1998, the Canadian Minister for International Trade responded "on the relationship between the MAI and various human rights treaties, the core principles of non-discrimination on which the MAI rests will not prevent – or indeed excuse – governments from observing their respective international legal obligations arising from other sources, including those concerning labour and human rights. For Canada, these would include obligations arising from the International Labour Organizations (ILO) conventions which are in force and which Canada has ratified." This pledge, along with assurances that the Government would seek strong "language on labour issues" in any MAI, including a reference to ILO core labour standards along with the – non-mandatory – OECD Guidelines for Multinational Enterprises, were accompanied by commitments to consultation with Canadians but no evidence of any studies of potential implications done by the Foreign Affairs and International Trade or any other body. (11)

While the Federal Response to Question 3 does not mention it, the Federal House of Commons did undertake a review of "Canada and the Multilateral Agreement on Investment", through the Sub-Committee on International Trade, Trade Disputes and Investment of the Standing Committee on Foreign Affairs and International Trade. No session of that Committee focused on human rights implications, although these issues were raised by some civil society witnesses. No witnesses or organizations of particular and specific expertise in human rights were invited to appear and neither Federal or Provincial Human Rights Commissions were asked for their assessment.

Despite these limitations, it is useful to note that the Sub-Committee recommended an "unbound reservation for health, education and social services", (Rec. 16), sought "an adequate and effective cultural exemption" (rec. 14), called for "strong and unambiguous language" regarding environmental standards (rec. 13) and labour standards (rec 12), suggested that Canada press for "open, accessible and transparent procedures in dispute resolution," (rec. 11) expressed sensitivity to the implications for sub-national governments (rec. 15), recommended narrow language on expropriation (rec 10) and a clear definition of "investment", (rec. 6)

No recommendation deals specifically with human rights or human rights obligations beyond the specifics of labour and environment. There is no evidence presented that the Sub-Committee reviewed or sought to apply Canada’s existing human rights commitments, the Covenant on Economic, Social and Cultural Rights, for example with regard to its mandate.

It should further be noted that the import and validity of the Sub-Committee’s (and the Government’s) frequent reference to reservations with regard to the draft MAI have been put in doubt by advice drafted by trade lawyer Barry Appleton on the narrow and limited interpretation of reservations in international trade law. (13)

At the same time the Sub-Committee recommended proceeding with the Agreement (rec.1 and moving on to a global agreement along similar lines (rec. 8) It recommended increased efforts to inform Canadians of the merits of the MAI and an open and transparent process in future negotiations. (recs 2 and 5, ).

The Sub-Committee suggested that the Government "consider undertaking a full impact analysis which will note the reason why Canada should take part in the MAI. Where relevant this will include a discussion of foreseeable economic, environmental, social and cultural effects of the agreement and the obligations imposed by the final terms of the agreement." (rec 4) This

latter recommendation would appear to grant the case that there had been insufficient review of implications, particularly in areas like economic, social, cultural and environmental impacts.(14)

The Minister’s reply to the Parliamentary Committee reasserted the Government’s "bottom lines", continued negotiation, broad consultation with Canadians, protection of Canadian values including culture, education, health and social services, aboriginal people and minorities. The Minister indicated that an MAI must have rules to ensure the interests of labour and the environment are promoted in international trade negotiations, and that Canada would keep the negotiating process transparent.

With regard to the recommendation that an impact assessment be undertaken, the Minister indicated that continuing assessments were being made in any case.

The Minister listed all those organizations consulted by the Federal Government with regard to the negotiation of the MAI to April 17, 1998. While the list is extensive and multi-sectoral there are few if any human rights organizations listed. (15)

To date, to our knowledge, the only formal governmental review of the implications of the MAI for human rights commitments has been that undertaken by the Special Legislative Committee of the Province of British Columbia, which held one session devoted to human rights and a related session on implications for First Nations. The other provinces indicate processes such as consultation between trade and human rights departmental officials. No one refers to Provincial Human Rights Commissions. No province indicates that a study specific to issues of human rights and the MAI or other trade agreements has been undertaken, with the exception of the Special Legislative Committee in B.C.

Assessment

What are we to conclude from the evidence presented by the Federal and Provincial governments in their response to Question 3? There is no evidence that any detailed study of the possible implications for human rights of the existing agreements (FTA, NAFTA, WTO, for example) or agreements in negotiation (MAI and FTAA) has been undertaken or is available to the public. The reviews which are mentioned may be regarded as essentially routine and in no way indicative of a recognition of the "radical" or "revolutionary" departures implied by sections of the NAFTA or the draft MAI for example, (See below), despite the profound concerns expressed by a number of Canadian civil society organizations which were invited to the Federal parliamentary inquiry.

While the Canadian Minister of International Trade and the Government of the Province of Alberta cite initiatives to protect labour rights, and the Government of Canada elsewhere repeats its commitment to the environment, there is no clear commitment to mandatory inclusion of protective provisions for these areas. Further, there is no recognition that even with the inclusion of labour rights or environmental guarantees, they have not satisfied their Covenant commitments for many other aspects of life and classes of people, most importantly the poor.

The responses to Question 3 testify to a gaping chasm between the cursory and limited attention given the issues by the governments and the wide-ranging and deep concerns regarding the same issues expressed by Canadian civil society organizations in such fields as environment, culture, education, health, labour, economic and social justice.

A lacuna

The response to the Committee’s Question 3 omits one significant group of authorities, Canada’s First Nations. As is clear in testimony from First Nations representatives, environmental and legal experts at the British Columbia Legislative hearings, the implications of the draft MAI and similar agreements are manifold for First Nations and for the new round of treaties and agreements currently emerging in Canada in such cases as the Nisga’a.

The past-Grand Chief of the Assembly of First Nations, Ovide Mercredi further notes that "what is particularly galling about the federal government negotiating for all Canadians is that, in so doing, it has forgotten its constitutional obligation and duty to consult with First Nations before proceeding with negotiations that will utlimately infringe upon our Treaty and Aboriginal rights" and further "the assumption by Canada that it can bind our peoples and governments to international standards of any kind without our involvement or consent." (16)

In sum this leads us to the conclusion that Canada has already violated the Covenant in its negotiation of the NAFTA investment Chapter and the draft MAI, at least as reflected in the answers presented to the Committee Question 3. The Maastricht guidelines suggest that a state is in violation when it fails "to take into account its international legal obligations in the field of economic, social and cultural rights when entering into bilateral or multilateral agreements with other States, international organizations or multinational corporations." (17)

This leads us to our second recommendation:

R 2. that the Committee ask Canada to undertake a comprehensive review of the issues raised by Question 3, with the full participation of the Canadian Human Rights Commission, the relevant Provincial (including the Provincial Human Rights Commissions) and Municipal authorities, with First Nations representatives and interested civil society organizations and report back to the Committee within a year.

 

 

CANADIAN CIVIL SOCIETY CONCERNS

Overall concerns: the architecture of governance

Canadian civil society voices have sought to articulate the underlying meaning of the proposed MAI.:

"The MAI seeks to remove the right of states to regulate and control corporations, whether those regulations are for the environment, for health care or for labour standards. The MAI would also apply to culture and resources; it could interfere with food subsidies, agrarian reform and safety standards. An while it does remove the right of states to control those things, it does not establish international controls in its place. Consequently controls, if any, will be decided by the transnational corporations at their discretion. In other words, the MAI will be a bill or rights for the multinationals and for the free market." The Hon. Warren Allmand, President of the International Centre for Human Rights and Democratic Development (18)

Tony Clarke, former long-term Director of Social Affairs for the Conference of Catholic Bishops and Director of the Polaris Institute comments:

"After studying the five official drafts of the MAI...it appears that there are three underlying aims...: first, to confer on transnational corporations a quasi-nation-state status for the exercise of economic sovereignty in the new global economy – in other words, by transnational corporations; second, to establish a broad body of rules for transnational corporations, to regulate governments rather than governments regulating corporations; and third, to provide transnational corporations with a set of power tools that can be used to enforce these rules and make them binding on governments and their citizens." (19)

A leading trade lawyer, Barry Appleton expressed it "...this is, in essence, an economic constitution. We do not have the right to property in Canada under our constitution, and Canadians do not have the right to property under the MAI, but foreign investors would. That’s the difference. So we’re in a rather absurd situation..." (20)

One of the most far-reaching aspects of the draft MAI affects assumptions of the relationship of the state to other actors which are fundamental to the United Nations Human Rights agreements and system. In simplest terms the post-war system is founded on the assumption of the responsibility of the state to respect, protect and fulfill the human rights of its citizens. The effect of the draft MAI and such instruments as the NAFTA investment chapter is to elevate corporations to a quasi-state level, and many would argue to place their rights above state obligations to their own citizens.

Environmental lawyer Steven Shrybman comments: "When you compare investor-state suits against the norms of dispute resolution under international treaties and international trade agreements...you find this radical departure from the notion that international treaties create rights in other states. It is only in other states that the capacity to enforce multilateral agreements and commitments resides. This, in a sense, elevates this unknown universe of foreign investors to the same status of a nation state: being able to enforce rights arising under a treaty to which they are not a party and with respect to which they hold no obligation. That is a revolutionary development in the law, in my view". In short, he continued, it is "a profound assault on the principles of natural justice and transparent judicial processes." (21)

Shrybman argues that the radical extension of commercial arbitration mechanisms into fields which have implications far beyond commerce is dangerous and inappropriate. "When disputes are not commercial and when they don’t arise under contract and when they have everything to do with public policy and law and ...very little to do with ...commercial arrangement, then there’s an overriding public interest in seeing that the norms of public process are respected...particularly in some litigious proceedings between an private interest pursuing parochial objectives and the state."

Paragraph 15 (d) of the Maastricht principles points out that a state is in violation when it fails "to regulate activities of individuals or groups so as to prevent them from violating economic, social and cultural rights". (22) The effect of the draft MAI and its antecedents is to cede away much of the ability of the state to undertake effective regulation on behalf of the rights of its people.

a "profound assault on the principles of natural justice and transparent judicial processes." (23)

Thus, in the opinion of a number of Canadian civil society organizations, the MAI threatens the architecture of governance in a way which marginalizes democratic power and accountability.

Upsets the Canadian Constitution

As pointed out by the Hon. Warren Allmand in his testimony to the B.C. Special Legislative Committee and by the Director of the Centre for Equality Rights in Accomodation, Bruce Porter (23A) the MAI and the NAFTA reverse the exclusion of property rights from the Canadian constitution, bringing property rights into Canada "by the back door".

The linkage of social and economic rights with the issue of corporate-commercial rights was treated in the case of Irwin Toy v. Quebec (AG) [1989], which is familiar to the Committee. The effect of the MAI and the NAFTA is to advance property rights while the other family of economic, social and cultural rights remains in a zone of unclarity. (23B)

Transparency

In negotiation

In his scholarly examination of the ethics of the global market, Unequal Freedoms, Guelph University Professor John McMurtry notes that "the MAI was first leaked in 1997 – some two years after the plan had begun to be put in place. Here too the evident design was to replace responsible government by a borderless corporate regime whose rules few knew or voted on." (24) The concern with secrecy and exclusivity of negotiations has been repeatedly raised by Canadian civil society organizations. Canadian and American non-governmental bodies were instrumental in securing and releasing hitherto secret negotiating texts of both the NAFTA and the MAI at strategic moments. The Government of Canada has pledged transparency in future.

In implementation

The investor-state dispute settlement mechanisms of both the NAFTA and the draft MAI are characterized by extensive secrecy. The recent settlement of the Ethyl/MMT case in Canada, under the NAFTA, was arrived at in secret and released in the sleepy days of summer. But had it gone to the formal tribunal process specified in the treaty it would have remained secret as well. (25) When an environmental lawyer inquired of Federal officials as to whether there were other similar cases at issue and if so how many and with whom, "those officials told us they couldn’t say because the very fact of the complaint was subject to the confidentiality regime of the investor-state dispute resolution rules." As the lawyer pointed out "you really have to go back to the Star Chamber, which was abolished by Parliament in 1641, to find anything that looked anything like dispute resolution under the MAI." (26).

Thus Canadian citizens are confronted with the likelihood that they will see their government undertaking actions vis-a-vis particular corporate complainants without the knowledge of the specific terms of the complaint, the ability to access the process or perhaps even the right to know the specifics of the result.

Enforcement

One of the fascinations for human rights, labour or environmental advocates with the new trade and investment regimes is the power of enforcement embodied in the agreements. This was clearly established in the transition from GATT to World Trade Organization, but the investor-state dispute settlement mechanism in the investment chapter of the NAFTA and in the draft MAI is particularly worth noting.

In an examination of trends in Canada, while binding commitments for investors rights were being negotiated and implemented in the NAFTA, Canada’s primary vehicle of implementing Covenant Commitments to social and economic welfare of Canadians -- the Canada Assistance Plan -- was being dismantled. "The international agreed system of rights guarantees for all citizens is left with inadequate international enforcement mechanisms, while federal commitment to the treaties Canada has ratified is being subverted by the government itself. Individuals find standards and rights to appeal removed, while corporations have access to secretive procedures that result in compulsory enforcement, with significant monetary damages or restitution." (27)

Progressive realization in question

The Hon. Warren Allmand, President of the International Centre for Human Rights and Democratic Development and a former Canadian cabinet minister, noted the overall effects of agreements including NAFTA, the WTO, APEC and the draft MAI as they contribute to "pressures to reduce social programs and environmental programs to the lowest common denominator" and thus toward regress rather than progress in the achivement of human rights. "These agreements, by their very nature – they way they written at present – encourage countries to reduce these programs in order to reduce their costs and to compete with the lowest standards existing in the world.". (28)

The general effect of agreements like the MAI is to establish a "rachet" effect in which the scope of activities open to private market initiative is constantly increased and that available to democratic public enterprise is reduced in an irreversible fashion. The International NGO Committee on Human Rights in Trade and Investment has pointed out that the requirements of "rollback" and "standstill" in the draft MAI, "are incompatible with the requirement that economic, social and cultural rights be realized progressively, as explicitly stated in the International Covenant". Governments must demonstrate that they are moving forward and "there is a specific duty on state parties to not take retrogressive measures that would jeopardize economic, social and cultural rights." (29).

This point has been recognized by a number of Canadian civil society organizations and analysts as potentially affecting a diversity of sectors – child care, education, culture, social services – and limiting the likely long-term effectiveness of most of the proposals for reservations and exceptions thus far put forward. Michelle Swenarchuk of the Canadian Environmental Law Assoc. has pointed out that these provisions could threaten the process of environmental review as currently practiced in a number of Canadian jurisdictions, affecting regulation of mining, forestry, waste disposal and pollution abatement among other sectors. (30)

The proposed prohibition on a number of instruments often used by governments to ensure the progressive realization of economic, social and cultural rights – principally performance requirements – contributes as well to a framework which is regressive rather than progressive from a human rights perspective.

Globalization and economic, social and cultural rights

The Committee, along with some other UN Human Rights bodies, is taking initiatives to review the issues raised by the trends characterized as "globalization" and rights.

The investor agreements tend to serve large investors largely. In the specific area of employment and the attempt to expand investor rights, a number of witnesses at the recent British Columbia Special Legislative Committee hearings noted that the largest investors appear to be reducing rather than increasing their employee numbers. (31)

As to those who are employed, further testimony noted that "William Cline of the Institute for International Economics, which is the most respected pro-globalization think tank in the U.S., has determined that about 39 percent of the increase in wage inequality over the past 20 years is simply a result of trade. That’s only trade, and that doesn’t include the increased mobility of capital which is being sought by agreements like the MAI" (32)

In addition the competitive strategies employed by large foreign firms entering a new market often result in the destruction of local or competing firms who are employers in their own right. (33)

While note falling specifically in the scope of this paper, the impact of these agreements on relations between Canada and other industrialized states and less developed or developing countries is viewed as significant by a number of Canadian civil society commentators. (34)

 

 

 

 

THE ABILITY TO FULFILL OBLIGATIONS: FURTHER AREAS OF CANADIAN CIVIL SOCIETY CONCERN

The following list indicates very briefly some of the further areas of expressed concern:

provincial jurisdiction

As the Committee is aware, a significant portion of the responsibility for implementing the Covenant rests in provincial jurisdiction in Canada.

The impact of the draft MAI on the provinces has received significant attention in Canada, and several provincial governments – British Columbia, Prince Edward Island and Saskatchewan – stood away from the Federal Government’s pursuit of the agreement.

In testimony before the Special Legislative Committee, a spokesperson for the British Columbian Government indicated that his government was confronted by extensive pressures from globalization and required a variety of tools to ensure employment, for example. He put at issue the MAI clauses dealing with respect for national treatment, eradicating performance requirements and expropriation. He noted that even health care was not adequately protected.

"In our opinion," he concluded, "the MAI is just simply not necessary. Its purpose is to restrict the ability of governments to be able to act, to meet the needs of all the people in their communities." (35)

Many of the concerns raised with regard to the impact on provincial ability touch on the effect of expropriation and a number of other items in the MAI on article 1 (2) the right to "freely dispose of their natural wealth and resources", etc.

trade unions

Concern for respect to Article 8, its equivalent in other U.N. Human Rights agreements and ILO conventions has been raised with regard to the new generation of trade and investment treaties.

Canadian labour and its allies have been particularly active in opposition to the NAFTA and the proposed MAI, calling for clear and mandatory recognition in trade treaties of the ILO core labour rights and pointing out that preambular references to labour guarantees in trade treaties are quite insufficient.

The Canadian Labour Congress points out that the MAI changes the "balance of power" between the state, corporations and citizens. "The MAI provides rights to investors and transnational corporations without providing appropriate counterbalances that would allow other parts of society to protect themselves against the decisions and actions of investors." Even if such agreements include specific labour and environmental clauses, they have the effect of "freeing highly mobile capital from national legal constraints...It is too easy for ‘liberated’ capital to pit governments and people against each other. The result of these efforts by capital is to undermine living standards and to destabilize communities at the national and local levels." (36)

standard of living and continuous improvement

Many of the concerns above affect the ability of the Canadian governments to ensure an adequate standard of living and its progressive improvement. A significant sector of Canadian civil society organizations argue that the implementation of the bilateral FTA and the NAFTA if not directly causing the reduction of unemployment insurance benefits, social welfare (CAP) guarantees and a variety of other economic and social equity-producing programmes, were accompanied by these regressive measures and have reinforced a retreat of the state from ensuring the welfare of its citizens.

Illustration of the particular and disproportional impact of many of these changes on women in Canada will be part of other submissions to the Committee.

Jacqie Ackerly of the National Anti-Poverty Organization points out that "transfer payments have been cut and the Federal spending power used to maintain standards and social program delivery has been severely curtailed. Canada has entered wholeheartedly into the race to the bottom... well-established programs that address economic inequality have been gutted." She subscribed to the warning of Madame Falardeau-Ramsay, Chief Commissioner of the Canadian Human Rights Commission, "I fear we are watching the birth of a society right here in Canada in which we will no longer be able to cushion the negative fallout from economic shifts, let alone set individuals and families on a more equal footing and ensure equality of opportunity for all." (37 )

The likelyhood that more and more service delivery programmes and institutions would be privatized irreversibly is implicit in the draft MAI.

health

Concern regarding the implementation of Article 12 (1) is perhaps the most widespread and politically sensitive issue in Canada. The Chair of the Canadian Health Coalition termed the MAI "a landmine which has the potential to devastate Canada’s health system". The Canadian Public Health Association wrote the Prime Minister to indicate that the MAI, as drafted, means that "the health and well-being of Canadians may be seriously jeopardized" and called for "rigorous analyses in terms of health, environmental; and social equity impacts". (38 )

Their concerns have been reinforced by the comments of trade lawyer Barry Appleton who points out that "the MAI opens up markets for foreign investors and their investments. Our health care system is diametrically opposed to the concept of free trade. It is a system, that is, at its heart — like our cultural system – based on certain types of protections of certain values, and we have given up the idea of the free market in that area in exchange for being able to protect something that we think is important." (39)

Trade lawyer Barry Appleton has pointed out that under the NAFTA and under the proposed MAI the ability of Canadians through their parliament to regulate smoking, in the instance of requiring generic packaging for cigarettes. The House of Commons Standing Committee on Health considered such an initiative in 1995. The tobacco industry enlisted former U.S. Trade Representative Carla Hills to tell the Canadians that such a restriction would constitute expropriation under the NAFTA and the Canadian government would face costs of hundreds of millions of dollars. Thus the intellectual property rights, trade mark rights and marketing rights of tobacco companies would trump the right of Canadians through their democratic parliament to take measures which would contribute to the protection of the right to health. (40)

A further and very far-reaching issue is that while Canada might be able to protect currently publicly funded sectors of health care with a reservation, the effect of the standstill provisions in the draft MAI would mean that no new coverage by public insurance, for example a national drug plan or a national home care plan, would be likely to be implemented. (41)

environment

Concern for the environment is closely wedded with the right to health (Article 12 (b)), to economic well-being and self-determination (Article 1 (2)) as well as to a number of other United Nations agreements. The Canadian Environmental Law Association notes that"resource management is a fundamental element of both environmental protection and community stability"

Their spokesperson, Michelle Swenarchuk points out that while the NAFTA provided "very limited protection for some international environmental treaties which used trade sanctions as a way to achieve environmental goals, for example the Montreal protocol, the MAI provides no such "semi-exemptions".

The increasingly broad interpretation of the expropriation characterized in the Ethyl/MMT case and in the approach of the draft MAI gave particular preoccupation not only to environmentalists but to provincial and municipal spokespersons. At risk was the ability of local jurisdictions among others to regulate the use of land and resources.

An overall issue relating to the influence of investment and trade treaties on the environment, particularly from the perspective of impact on human health, is the importance of giving precedence to the precautionary principle. A number of environmental spokespersons point out that when trade disputes with significant environmental effects at issue and adjudicated by trade panels, the frame of examination/adjudication and the expertise brought to bear often represents only a trade impact analysis and not an evaluation of environmental or health effects. A number of current issues in Canada, including the health effects of MMT, the pressure to approve the bovine growth hormone, and the question of the reduction in the capacity and independence of environmental and health inspectors have pre-occupied the Canadian public.(42)

culture

Among priority issues for many Canadians is the protection of our unique English, French and First Nations cultures in a continent dominated by the powerful cultural enterprises of the United States. This is perhaps the primary context for considering the implementation of Article 15.

Garry Neil, the chair of the Cultural Industries Council of Ontario and former CEO of the Alliance of Canadian Cinema, Television and Radio Artists (ACTRA) noted recently that "Canadians want to be able to see ourselves reflected in what we watch, hear and read, and to able to choose to view the world from our own perspective, as well as that of others. But it’s difficult to provide the necessary range of quality Canadian choices on a purely commercial basis." Canadians have taken a variety of measures, in a difficult competitive situation, to permit artists and cultural industries to emerge and succeed. Many of these programmes are under "increasing attack from the U.S. entertainment industry" and the provisions of the MAI would "affect virtually every cultural support program and measure which Canada has implemented nationally, provincially and locally." (43) He argues that a "comprehensive cultural exception is an absolute prerequisite" and that the following principles should be applied to all negotiations between Canada and its trading partners:

"(1) a comprehensive definition of culture – which includes not only the cultural industries of radio, film, television, book and magazine publishing, and the music industry but also new media and key elements of the telecommunications sector – should explicitly include the performing arts, visual arts, and crafts and heritage as well as individual artists and creators;

(2) there must be agreement that the exception is self-defining for each nation, to permit it alone to determine what is a cultural measure and to change that determination over time.

(3) a provision that adjudication of any dispute arising from the interpretation of the cultural exception would be referred to a panel of cultural experts empowered to determine if a given measure is truly cultural;

(4) adequate language to ensure that the exception is not confined to certain parts of the agreement but rather overrides all of the obligations and is further not subject to the principles of standstill and rollback." (44)

With regard to the ability of local publicly-supported cultural subsidies, Prof. Tim Quigley of the University of Saskatchewan College of Law has pointed out that under the MAI use of national treatment, a cultural council in a Saskatchewan city might be forced to grant funds to the Disney Corporation as well as to small community based theatrical and craft initiatives. (45)

The Association of Canadian Publishers "has launched a vigorous campaign to ensure that the process is open to debate the merits of the MAI and to ensure that Canadian culture and the ability to set cultural policy are not traded away." Among provisions of the draft MAI of concern to the publishers were standstill and roll back, threatened removal of legislated Canadian ownership/control provisions in the book production and distribution industries and doubts that proposals to exempt culture would be effective. (46)

Keith Kelly, the director of the Canadian Conference of the Arts, Canada’s oldest and largest arts advocacy organization, and R.H. Thomson a leading Canadian actor, propose the drafting of an international charter of parallel rights, to remedy the erosion of national sovereignty and protect matters of inherent importance to national values and identity, and to make certain that democratic national decision-making bodies are not bypassed or overruled by trade tribunals. Mr. Kelly indicated, in testimony to the British Columbia Special Legislative Committee that such an initiative held more promise than "the vague hope of a country-specific reservation". Such a charter should have equivalent power of current trade agreements. (47)

 

CONCLUSION: NEXT STEPS

In addition to the two recommendations cited above, we believe that the Committee should take a series of further actions.

Further recommendations

R 3. That the Committee express strong concern about the lack of transparency and public accountability in the negotiation of the MAI and recommend an open and accountable process for any future negotiation and consideration of treaties regulating trade and investment, including participation by a wide-range of civil society actors.

R 4. That the Committee express strong concern that Canada has taken no action on improving enforcement mechanisms for economic, social and cultural rights of its citizens, while promoting unprecedented enforcement mechanisms for the protection of the rights of investors and transnational corporations.

R 5. That the Committee express concern that the draft MAI and the Investment Chapter of the NAFTA, as well as other bilateral investment treaties, have the effect of institutionalizing corporate "property rights" of the kind which the Supreme Court of Canada rejected in the Irwin Toy decision.

R 6. That the Committee express concern that the lack of transparency, judicial accessibility and democratic accountability characteristic of the implementation of the Investment Chapter of the NAFTA is in conflict with the civil and political rights of Canadians and in conflict with the ability of the Government of Canada to protect the economic, social, cultural and environmental rights of its citizens and should be cancelled or reformed.

CONCLUSION

At this time of the observance of the 50th Anniversary of the Universal Declaration of Human Rights, we find human rights threatened from a new quarter.

As the first major published critique of the MAI in Canada pointed out:

"in 1998, the richest nations of the world, including Canada, are...poised to ratify a treaty that will grant so much power to transnational corporations and stateless global capital that the democratic rights granted to the peoples of the world by the UN Declaration will be seriously compromised. The Multilateral Agreement on Investment (MAI) is the culmination of a global assault, in the name of commercial freedom, on these social rights and on the commitments to ecological stewardship made by the world’s nations at the 1992 Rio Earth Summit.

"The MAI, if ratified, will serve as a Charter of Rights and Freedoms for transnational corporations against citizens and the earth, and represents a grave threat to democracy in Canada and around the world." (48)

The MAI as contemplated by the OECD appears to be stillborn. The objectives which motivated the negotiations in the OECD are not. And a number of important questionable aspects of the MAI are already operative, as we have pointed out, in the investment chapter of the NAFTA, affecting Canada and Mexico both signatories of the Convention and the United States.

In the light of the challenge represented by the draft MAI and MAI-like agreements the Committee may wish to ask:

* why such a cursory response was made to their Question 3 raising these issues

* why the extensive and deep concerns of Canadian civil society organizations were quite unrepresented in the response of governments to the Question

* what this portends for the future of the respect for and implementation of Covenant Commitments by the Canadian state and other signatories of the Covenant.

The most important matter, however, which should guide study and review, is to move from critique to proposal for effective regulation and accountability of corporations and investors within human rights norms and in response to the rights and desires of citizens.

Once again, on behalf of non-governmental and civil society organizations in Canada we welcome and thank the Committee for raising the issue through the posing of Question 3 to Canada. We join with the Committee in waiting for adequate responses.

 NOTES AND REFERENCES

Note:

Two recently published volumes offer significant treatment of the interface between the draft MAI and human rights:

Tony Clarke and Maude Barlow, MAI: The Multilateral Agreement on Investment and the Threat to Canadian Sovereignty. Toronto, Stoddart, 1997 ISBN 0-7737-5946-8.

Andrew Jackson and Matthew Sanger, Eds., Dismantling Democracy: The Multilateral Agreement on Investment (MAI) and Its Impact. Toronto and Ottawa, CCPA/Lorimer, 1998. ISBN 1-55028-614-5 Hereafter Jackson and Sanger (eds.), Dismantling...

The Legislative Assembly of the Province of British Columbia mandated a Special Legislative Committee on the MAI to review a wide range of issues associated with the draft agreement. The testimony made to this Special Legislative Committee are contained in 1998 Legislative Session: 3rd Session, 36th Parliament. Report: The Multilateral Agreement on Investment: The Transcripts of Proceedings (Hansard). While an official printed record is anticipated, the version currently available is on the internet at www.legis.gov.bc.ca/cmt. Hereafter The Transcripts.

Notes:

1. The Ariel F. Sallows Chair of Human Rights at the College of Law, University of Saskatchewan is the first endowed chair in Human Rights in any college of law in Canada. It was established through an agreement with the late Ariel F. Sallows Q.C., in 1979. Among incumbents have been Dr. Virginia Leary, Dr. Abdullahi Ahmed An-Na’im, Mr. Martin Ennals, Dr. Robecca Wallace and Dr. John Foster

2. Federal Responses and (partial) Provincial Responses as circulated be e-mail and received November 6, 1998.

3.) The Hemispheric Peoples Alliance was celebrated at the Summit of the Peoples of the Americas in Santiago de Chile in April, 1998, involving a cross-sectoral conference of several hundred participants. The APEC People’s Summit took place in Vancouver, Canada in November, 1997 and is taking place this month in Kuala Lumpur, Malaysia. See "The Multilateral Agreement on Investment: A Step Backward in International Human Rights", Cambridge, Harvard Law School Human Rights Program in consultation with the Robert F. Kennedy Memorial Center for Human Rights, 1997 and "Investment, Trade and Finance: The Human Rights Framework", Geneva, International NGO Committee on Human Rights in Trade and Investment, 1998.

4. see Catherine Lalumiere and Jean-Pierre Landau, Report on the Multilateral Agreement on Investment, Intermediary Report, Paris, September, 1998 and Mark Vallianatos, "Update on MAI Negotiations, October 27, 1998", Washington, Friends of the Earth, 1998, Brewster Grace, "Whither the MAI?", Geneva, Quaker United Nations Office, November 3, 1998, and News Release "Marchi invites Canadians, Hemisphere to Express Views on the Free Trade Area of the Americas", (November 5, 1998 No. 256) Ottawa, DFAIT, 1998

5. Council of Canadians, Towards a Citizens’ MAI: An Alternative Approach to Developing a Global Investment Treaty Based on Citizens’ Rights and Democratic Control, Ottawa, 1998 This discussion paper was developed by Tony Clarke of the Polaris Institute, with comment from a number of international participants. See also discussions of the development of a draft Civil Society Treaty facilitated by the Public Citizen’s Global Trade Watch and the Institute for Agriculture and Trade Policy, among others, in the United States.

and also

Alternatives for the Americas, Building a People’s Hemispheric Agreement, November, 1998. This document includes a significant treatment of general principles regarding trade and investment together with a detailed proposal regarding the role of governments in regulating investment. It was prepared by a consortium of socially-oriented policy research institutions in Canada, Chile, Mexico and the United States.

6) see Part Five, Chapter Eleven "Investment", North American Free Trade Agreement. Final Text. CCH International, Special Report, December 17, 1992.

7) see John McMurtry, Unequal Freedoms, The Global Market as an Ethical System. Toronto, Garamond, 1998. pp. 236-7.

8) Forum on Human Rights (Vienna Plus Five), Working Group on Economic, Social and Cultural Rights, Ottawa, June, 1998. From the Recommendations.

9) Barry Appleton, LL.B., LL.M., Municipalities and the MAI. Toronto and New York, Appleton and Associates, 1998.

10) Testimony of John Ranta, Mayor of Cache Creek, representative of the Union of B.C. Municipalities in The Transcript, Issue No. 5, Victoria, September 30, 1998. p.

11) Sergio Marchi, Minister for International Trade to Dr. John W. Foster, May 11, 1998.

12) see Barry Appleton to Peter Bleyer, Executive Director, Council of Canadians, Memorandum re: Reservations to the Proposed Multilateral Agreement on Investment, Toronto, November 14, 1997 Appleton points out, for example, that Canada’s proposed reservation to protect social services such as health and public education is inadequate to permit provincial governments to continue to provide these services without compensating affected foreign investors and governments. (P. 24)

13) House of Commons Canada, Third Report of the Standing Committee on Foreign Affairs and International Trade, First Report of the Sub-Committee on International Trade, Trade Disputes and Investment: Canada and the Multilateral Agreement on Investment. Ottawa, House of Commons, 1997.

14) Government Response to the Report on Canada and the Multilateral Agreement on Investment, Ottawa, Minister of International Trade, April 21, 1998.

15) Ovide Mercredi, "The MAI and First Nations" in Jackson and Sanged (eds), Dismantling..., p. 69.

16) The Maastricht Guidelines on Violations of Economic, Social and Cultural Rights, Human Rights Quarterly 20 (1998), Baltimore, The Johns Hopkins Press, 1998.

17) Testimony of the Hon. Warren Allmand, President, International Centre for Human Rights and Democratic Development, The Transcript, Issue No. 8, Victoria, October 8, 1998. p. 241.

18) Testimony of Tony Clarke, Director, Polaris Institute, The Transcript, Issue No. 5, Victoria, September 30, 1998, p. 110.

19) Testimony of Barry Appleton, The Transcript, Issue No. 5, Victoria, September 30, 1998, pp. 141 ff

20) Testimony of Steven Shrybman, Executive Director, West Coast Environmental Law Association, The Transcript, Issue No. 5 , Victoria, September 30, 1998. pp. 145 ff.

21) The Maastricht Guidelines...

22) Testimony of Steven Shrybman..., p. 146.

23) McMurtry, Unequal... p. 237

23 A) See Testimony of Hon. Warren Allmand, The Transcript... and Bruce Porter to John Foster, November 11, 1998.

23 B) in the Irwin Toy decision the Supreme Court held "Lower courts have found that the rubric of "economic rights" embraces a broad spectrum of interests, ranging from such rights, included in various international covenants, as rights to social security, equal pay for equal work, adequate food, clothing and shelter, to traditional property-contract rights. To exclude all of these at this early moment in the history of Charter interpretation seems to us to be precipitous. We do not, at this moment choose to pronounce upon whether those economic rights fundamental to human life or survival are to be treated as though they are of the same ilk as corporate-commercial economic rights."

24) Testimony of Steven Shrybman.... p. 146 The Ethyl/MMT case despite having received only marginal publicity in 1998 appears in virtually every individual testimony in the B.C. Special Legislative Committee hearings.

25) Testimony of Steven Shrybman..., p. 146.

26) John Foster, "The MAI and Human Rights" in Jackson and Sanger (eds), Dismantling..., p. 109.

27) Testimony of the Hon.Warren Allmand...., p. 241.

28) see International NGO Committee on Human Rights in Trade and Investment, Policy Statement. P. 3. This statement was utilized extensively in the Testimony of the Hon. Warren Allmand. p. 241 ff.

29) Michelle Swenarchuk, Brief, Toronto, Canadian Environmental Law Association (CELA).

October, 1998.

30) see, for example, testimony by Susan George, Associate Director, Transnational Institute, The Transcript, Issue No. 5, Victoria, September 30, 1998. p. 105 ff.

31) Testimony of Mark Weisbrot, Director, The Preamble Center, The Transcript, Issue No. 11, Victoria, October 15, 1998, p. 412.

32) Testimony of several witnesses, B.C. Special Legislative Committee

33) See articles by Greg Albo, Martin Khor and others in Jackson and Sanger (eds), Dismantling...

34) Testimony of Noel Schacter, Government of British Columbia, The Transcript, Issue No. 5, Victoria, September 30, 1998. p. 98.

35) Testimony of Bob White, President of the Canadian Labour Congress, The Transcript, Issue No. 11, Victoria, October 15, 1998. p. 382 ff.

36) Testimony of Jacquie Ackerley, Second Vice-President, National Anti-Poverty Organization, The Transcript, Issue No. 10, Victoria, October 14, 1998. p. 357 ff.

37) Cathleen Connors, Speaking Notes to the House of Commons Standing Committee on Health Regarding M.A.I. and Medicare. Ottawa, 1997 and letter Gerald H. Dafoe, Chief Executive Officer, Canadian Public Health Association to the Jean Chretien, Prime Minister, et al., Ottawa, December 4, 1997.

38) Testimony of Barry Appleton... p. 33

39) Ibid.

40) Memorandum, Prof. T. Quigley. Saskatoon, November 10, 1998

41) Testimony of Gary Neil, The Transcript, Issue No. 4, Victoria, September 29, 1998, p. 70.

42) Ibid.

43) Memorandum, Quigley.

44) Testimony of Bob Tyrell, The Transcript, Issue No. 4, Victoria, September 29.

45) Testimony of R.H. Thomson, The Transcript, Issue No. 4, Victoria, September 29, 1998,

46) Clarke and Barlow, MAI: The... pp. 7-8.