Debates of May 15th, 2007

Settlement of International Investment Disputes Act

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, the NDP member told us he would vote against Bill C-53 concerning the ICSID. In the end, it is just a tribunal. In my opinion, it is not necessarily the tribunal that presents a problem, but the poor investment protection treaties Canada negotiates and signs without the House's approval.

Consequently, does he not believe that this convention, which could be signed with the adoption of Bill C-53, could protect Canadian investments abroad and also protect Canada and other countries against investments? As I said, the centre is just a tribunal. The treaties Canada signs are not necessarily the best and should have tougher conditions with more bite. Because if necessary, the tribunal could put things right again.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, the issue for us is the tribunal process is not substantive in itself, but it has the potential, and I think a very bad potential, to lock in bad financial agreements and make them worse. That is why we oppose this. The example we use is NAFTA. We believe that NAFTA was put in place to give us a rules based sense of trade. If we are to have international trade, there has to be rules based trade.

We have seen how chapter 11 has been used and how it takes away the legitimate ability of a government to bring forth evidence as to why it has made decisions. If it is being used to simply penalize one company and to go after it, fair enough. Under the rule of law the evidence could be brought forward to substantiate that. However, what was to be the multilateral investment agreement was very similar to chapter 11. We believe the tribunal process is a continuation of basically a bad principle of reporting investor rights above the notion that investor rights are part of a larger common framework of rights in any functioning democracy.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, the story we have heard from the member for Timmins—James Bay is one of the most incredible tales I have ever heard in my life. I was spellbound by it. It is like an epic saga. My colleague has a background in the arts. I think he should write an epic poem about the saga of the Adams mine along the lines Beowulf or something like that. This is unbelievable.

I want to ask my colleague if I understood this correctly, because it is almost an unbelievable story. Does the member mean to say that we have a Canadian businessman, given investor state status through NAFTA, suing the nation state of Canada, or Ontario, for lost opportunity because he cannot do what he wants to do in this mine that he says he owns? Is that how convoluted our international trade agreements are?

First, do I understand that he is not even an American, that he is not an out of country businessman who has lost opportunity in this country, but rather a Canadian who somehow calls himself an American and says he has been inconvenienced and has lost $350 million worth of lost opportunity? Is that how twisted this story really is?

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, just to clarify this, Vito Gallo, the mysterious Vito, is an American as far as we know, but we do not know anything about him. We do not know any details.

He is claiming to be the sole owner of a derelict site through a numbered company registered in Ontario. There is nothing about this company that shows any kind of American investments at all. In fact, there is only one investment I have seen that it has made, other than apparently buying into the Adams Mine, which is that the 1532382 company gave political donations to the Conservative leadership in Ontario through this numbered company that is now being claimed as an American investment.

So there is certainly the question of what it was doing giving political donations through this group of companies, but through this dispute mechanism how do we even know who the owners are? There is no obligation under international trade to reveal this to the public or to bring forward evidence.

Therefore, we have a situation where there could be one, two or a dozen investors. We do not know if he is a small investor or the sole investor. He is claiming to be the sole investor right now. Again, the Toronto Star of May 9, 2003, said that Mario Cortellucci from Vaughan township was one of the key owners of that site.

We certainly think that basic jurisprudence would call for a forensic audit of this company to be made public before we would agree to submit to any kind of international dispute tribunal.

There is one final point on this question. Under this consent to arbitration, the plaintiff gets to ask for his own arbiter. He has asked for Professor Jean-Gabriel Castel from Orangeville, Ontario, so I find this situation even stranger. We do not even have a full court of law with full evidence so we do not know much. We know there is a numbered company in Ontario that is asking to have one out of the two or one out of the three arbiters picked by the company, this for $350 million of taxpayers' money.

It is an incredible tale. As for the government sitting back and allowing that to happen, when we think of this money that could be spent on Kelowna or on public transit but that might be going out the window and through a back door process under NAFTA to a donor to the Conservative Party, it is an incredible story. I agree. It is an incredible story.

[Paul Szabo, Liberal, Mississauga South, ON]

Mr. Speaker, I found the specific case very interesting, but the member has raised a point about chapter 11. I guess the rhetorical question is whether or not there is any confidence that the NAFTA dispute resolution mechanism works.

I do note that the ICSID option is already available and exists under NAFTA, but it is only available where the state making the investment and the state in which the investment is located both are parties to ICSID and to NAFTA. The only NAFTA partner that is a member of ICSID right now happens to be the United States, so that is not applicable.

Should Canada become a member, even under NAFTA the ICSID option would then be available, which is kind of interesting, because it basically provides that in countries where Canadian investors might lack confidence in the court system, which is part of the story the member has raised, there is ICSID's prohibition on court review, which, with its links to the World Bank as well, actually would appear to significantly improve the prospects of any arbitral award to be enforced.

I am not sure how the member feels about that, but it would appear that it means options for Canada.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I appreciate the member's question, but the issue we are looking at here is that we believe chapter 11 has failed some of the basic tests of allowing for a fair and open study of whether or not a particular company has been aggrieved.

As for this new dispute mechanism, it looks to us as though we are being asked to go from one really ugly dance partner to an uglier dance partner. We feel the situation could be improved.

We have to go with some fundamental principles. Again, there has to be open access for all interested parties. There has to be the open and full disclosure of all evidence being brought forward. There has to be the clear transparency of judges. Simply having a dispute panel working behind the scenes whereby people actually get to suggest their own arbitrators is not sufficient, especially when we have the public interest at stake, and, in this case, clean groundwater and $350 million of Canadian taxpayers' money that is on the hook.

Right now I do not feel any more confident about going under the proposal that is under Bill C-53 than I do going under chapter 11 of NAFTA. They are both flawed attempts to override the ability of a sovereign state to come forward in a House like this with clear legislation to protect the best interests of its citizens.

[The Acting Speaker, Andrew Scheer]

It is my duty pursuant to Standing Order 38 to inform the House that the questions to be raised tonight at the time of adjournment are as follows: the hon. member for Saint-Bruno—Saint-Hubert, Transportation; the hon. member for Algoma—Manitoulin—Kapuskasing, Softwood Lumber.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, first, I would like to confirm that the Bloc Québécois supports Bill C-53 in principle. I would also like to suggest to my colleague in the NDP that he should introduce the adjustments he would like to see in committee.

The passage of this bill will enable Canada to ratify the Convention on the Settlement of Investment Disputes between States and Nationals of Other States and join the International Centre for Settlement of Investment Disputes.

I will certainly be referring to this centre in my speech, and since it has a rather long name, I will just call it ICSID.

Bill C-53 incorporates the requirements of the convention into our domestic law, especially in regard to ensuring that arbitration awards are upheld and granting ICSID and its staff the immunities they need.

ICSID was established in 1965 by the World Bank under the Washington Treaty. One hundred and fifty-six countries are currently members. ICSID arbitrates disputes between states and foreign investors. These disputes can be of two kinds: first, disputes over compliance with bilateral foreign investment protection agreements, and second, disputes involving agreements between governments and foreign investors. The Government of Quebec regularly concludes agreements of this kind, encouraging foreign investment through promises, for example, to provide electricity at a particular price.

Canada joining ICSID will have no effect on the provinces and Quebec, except that they too will be able to provide for recourse to ICSID in the agreements they reach with investors.

The bilateral treaties binding on the federal government already provide for recourse to ICSID arbitration, although by means of a complementary arbitration system rather than the regular system, which is only available to countries that have ratified the convention.

The only thing that Canada’s joining ICSID will change is that Canada will be able to participate in the negotiations to amend the ICSID convention or regulations and rules and will be assured of being able to participate in the appointment of arbitration tribunals. Canada will therefore be able to participate directly in ICSID.

Ultimately, ICSID is only a tribunal. The problem, however, is not the tribunal but the bad treaties that Canada signs to protect investment.

The Bloc Québécois supports the negotiation of investment protection agreements provided, of course, that they are good agreements.

It is completely natural for investors, before making an investment, to try and make sure they will not be divested of their property or that they will not become victims of discrimination. This is the sort of situation that foreign investment protection agreements are meant to cover.

This is not a new idea. The first known agreement that included provisions relating to protection of foreign investments was signed between France and the United States in 1788, more than two centuries ago.

In the world today, there are more than 2,400 bilateral investment protection agreements. If we include the tax treaties that deal with the tax treatment of investments and foreign income, we find about 5,000 bilateral treaties concerning foreign investment.

The Bloc is in favour of negotiating such agreements and we recognize that they promote investment and growth. These agreements are almost all based on the same principles.

First, there is a respect for property rights regardless of the owner’s nationality. Second, there can be no nationalization without fair and prompt financial compensation. Third, there is a prohibition against treating property located within a country’s territory differently depending on the owner's origins. Finally, there is free movement of capital resulting from the operation and the disposal of investment.

In every case, when these rights are not respected, states may submit disputes over compliance with an agreement to an international arbitration tribunal. In the majority of cases, investors, themselves, may submit the dispute to an international tribunal, but only with the consent of the state. In many cases, the international arbitration provided in the agreement takes place before ICSID. By agreeing to this, as Bill C-53 provides, we are also agreeing to an international order in the field of investment.

In the investment protection agreements that they sign, only two countries, Canada and the United States, systematically grant investors the right to appeal directly to international tribunals. This is a deviation from the norm. By allowing a company to operate outside government control, it is being given the status of a subject of international law, a status that ordinarily belongs only to governments. The agreements that Canada signs contain a number of similar deviations that give multinationals rights they should not have and that limit the power of the state to legislate and take action for the common good.

The investments chapter of NAFTA, chapter 11, provides that a dispute can go to ICSID. That chapter is a bad agreement in three respects: the definition of expropriation, the definition of investor and the definition of investment.

The definition of expropriation is so vague that any government measure—except for a general tax measure—can be challenged by a foreign investor if it diminishes the profits generated by the investment. A plan to implement the Kyoto accord, which would have major polluters such as oil companies pay dearly, could be challenged under chapter 11 and result in government compensation. American companies have majority interests in Alberta oil companies. Chapter 11 opens the door to the most improper legal disputes.

The definition of investor is so broad that it includes any shareholder. Therefore anyone could take the state to court and attempt to obtain compensation for a government measure that allegedly reduced a company’s profits.

As for the definition of investment, it too is so broad that it even includes the future profits that an investor hopes to earn. In the case of expropriation, not only does the state find itself forced to pay fair market value, but it must also include revenues that the investor expects to earn in future. It would no longer be possible to nationalize electricity, as Quebec did in the 1960s.

Take the example of SunBelt, a corporation with a Canadian shareholder and a Californian shareholder. The corporation closed its doors when the Government of British Columbia withdrew the right it had granted for the bulk export of water. The Canadian shareholder, based on Canadian laws, received compensation equivalent to the value of his investment, or $300,000. The American shareholder, based on NAFTA chapter 11, included potential future revenue in its claim: $100 million. For better or for worse, the case was settled out of court for an undisclosed amount.

Given the amounts of money in issue, chapter 11 is a deterrent to any government action, particularly in relation to the environment, whose effect would be to reduce the profits of a foreign-owned corporation.

As well, the dispute resolution mechanism allows corporations to apply directly to the international tribunals to seek compensation, without even getting the consent of the state. How is it conceivable that a multinational could, on its own authority, create a trade dispute between two countries? And yet this is the absurd situation that the investment chapter of NAFTA permits.

Given these flaws, chapter 11 of NAFTA reduces the state’s capacity to take action for the common good and to legislate about the environment, and is a Damocles’ sword that could come crashing down at any moment on any legislative or regulatory measures whose effect was to reduce corporations’ profits.

In 2005, the United States changed some of the provisions in their standard form investment protection agreement. In 2006, Canada followed suit. Since both countries have now acknowledged the harmful and extreme nature of chapter 11 of NAFTA, the time is ripe for the government to move quickly to enter into discussions with its American and Mexican partners to amend chapter 11 of NAFTA

We say no to bad investment protection agreements. In addition to chapter 11 of NAFTA, and although its extreme nature has been widely decried, the government has entered into 16 other bilateral foreign investment agreements, carbon copies of chapter 11. All of these foreign investment agreements are faulty and should be renegotiated.

In 2006, the government recognized to some degree that these agreements were bad. Copying the amendments made by the Bush administration the previous year, the Conservative government made changes to its FIPA program to correct the most obvious shortcomings.

It clarified the concept of expropriation by specifying that a non-discriminatory government measure that is intended to protect health and the environment or to promote a legitimate government objective should not be considered as expropriation and should not automatically generate compensation. It is too soon to evaluate the real impact of that clarification, but at first glance, it looks like an improvement.

it restricted the concept of investment by specifying that the value of property is equal to its fair market value. That put an end to the folly of adding together all the potential profits that an investor might hope to earn from an investment. As for the rest, the standard investment protection agreement continues to be based on chapter 11 of NAFTA.

The government must continue to improve this standard agreement, particularly in terms of dispute settlement mechanisms. Multinational corporations must be brought under the authority of the state, like any other citizen.

Also, the government should submit international treaties and agreements to the House of Commons before ratifying them. At the start of the year, the government sent out a news release to announce that it had just ratified a new foreign investment protection agreement with Peru. It was only by reading that news release that parliamentarians and the public became aware of this agreement. Parliament was never informed and never approved it. That is completely anti-democratic.

Yet, the Conservative platform in the last election was clear: the Conservatives made a commitment to submit all international treaties and agreements for approval before ratifying them.

Since the Conservatives took office, Canada has signed 24 international treaties.

With the exception of the amendment to the NATO treaty, for which a mini-debate and a vote took place at the last minute, none of these international treaties were presented to the House.

Today, the consequences of international agreements on our lives are comparable to those that legislation may have. Nothing, absolutely nothing justifies the government quietly signing such agreements unilaterally, by going over the heads of people's representatives.

The Bloc Québécois has introduced bills in the past to restore democracy and ensure the respect of Quebec and provincial jurisdictions in the conclusion of international treaties. Since the government promised to do this, we did not bring the issue up again at the time.

We are now seeing that the word of the Conservatives is not worth very much. The Bloc Québécois will raise this issue again and will bring forward proposals to restore democracy in the conclusion of international treaties. Such proposals will include requiring the government to present to the House all international treaties and agreements it has signed before ratifying them, requiring the government to publish all international agreements by which it is bound, requiring the vote and approval of the House following an analysis by a special committee tasked with examining international agreements and major treaties before the government may ratify them, and calling on the government to respect Quebec and provincial jurisdictions in the entire process of concluding treaties, that is, all stages of negotiation, signing and ratification.

In conclusion, the International Centre for Settlement of Investment Disputes is indeed necessary to ensure that the states are treated fairly by multinational corporations. We must also ensure that the agreements signed by Canada are good agreements that respect all the stakeholders.

[Pat Martin, NDP, Winnipeg Centre, MB]

Mr. Speaker, my Bloc colleague's comments raised as many questions as they gave information about the view of this very complex international convention. The points made by the previous speaker, the member for Timmins—James Bay, cited a number of very legitimate concerns and provided reasons why the NDP will oppose Bill C-53.

The NDP is very concerned that the ICSID falls under the jurisdiction of the World Bank, an organization that the NDP has cited numerous concerns about in the past, partly in terms of transparency but also in terms accessibility for users of this tribunal process, this quasi-judicial arbitration process.

I am concerned that the House of Commons today, as we entertain Bill C-53, is not digging deep enough into how we envision this tribunal unfolding and the precedent setting status that it will have.

One of the most alarming concerns that I would like my colleague to comment on is that one of the arguments used by the government in favour of ratifying the international convention is that ICSID shelters foreign investors from the courts of any country or jurisdiction in which the investment is made. I thought we would be alarmed that we are setting up some kind of a dual parallel process that will shelter investors from the courts in the jurisdiction in which the investment is taking place.

In other words, this quasi-judicial arbitration process being set up by the World Bank will have precedence and primacy over the courts of the provinces of Quebec or Manitoba or the Federal Court if it, in fact, is an investment in the federal jurisdiction.

Are we prepared to cede that jurisdiction to an outside party such as the World Bank? Is our confidence in the World Bank such that we are willing to forgo our own court's jurisdiction? If we are interested in the best interests of Canadians, we should be throwing our confidence and faith in our own court system and let this foreign investor be judged by our high standards instead of a new arbitration process, which will likely be residenced in Washington, D.C. and under the jurisdiction of the World Bank.

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, all the agreements that Canada has signed on the protection of foreign investment have major deficiencies and are based to some extent on NAFTA chapter 11. As I said in my speech, most of the agreements Canada has signed are bad. A tribunal such as ICSID, which is the subject of Bill C-53, will always judge, treat and evaluate things on the basis of the agreement that was signed between the two countries. We are talking here about Canadian foreign investment. One hundred and fifty-six countries have signed this convention and can go directly to the ICSID tribunal.

We have international relations and Canadian foreign investment. I understand that the laws of Canada and of the various provinces and Quebec take priority when we are dealing with people who are here. However, when we are dealing with foreigners, we need some basis. This basis is primarily the agreements that have been signed. Everything depends on that.

As I said and say once again, this is just a tribunal. There are also the agreements that were signed, and unfortunately, most of them are bad. They should all be renegotiated, just like chapter 11 of NAFTA.

This is the basis on which people can at least seek justice on the international scene for Canadian foreign investment. I do not think that the reverse happens very often because I hope that Canada treats foreign investors fairly. It does not allow them to do everything they want, of course, whenever they want, or to be more important and take precedence over all the laws and regulations of Canada, which must be obeyed. Justice should always be done, therefore, on the basis of the international agreements that were negotiated but are mostly bad. In the future, all these agreements should be submitted to the House so that we can evaluate them.

That being said, I would tell the NDP member that he should table the amendments to Bill C-53; that would reassure them.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I listened with interest to my Bloc colleague's dissertation and certainly the rule of law is fundamental to any international trade agreement.

What we are talking about, though, is whether or not the rules' mechanism that is in place now is adequate and is on a fair and level playing field. For example, the courts have defined a corporation as a person. Now we are defining it basically as a nation state where it seems to have equal status and maybe even superior status because of the investment protection that we are giving to corporations.

Under NAFTA we are now allowing the principle that an investor in a company is somehow eligible to claim these nation-state cases. For example, the mysterious Vito G. Gallo and this 1532382 Ontario Inc. are suing the Canadian people for $350 million. That will be perfectly acceptable under NAFTA because it seems that, if anything, it is weighted continually on the side of the investor and not on fair jurisprudence, which takes one competing interest against another and balances them out.

We do not see those in the trade agreement. It is all fine and well to say that the trade agreements might not have been great and that we should renegotiate them but I would say, fat chance. Why should we renegotiate them when we are putting in place further issues that down the road will simply hurt us. We need tribunals that we insist are based on the rule of law that protects everyone.

I also would ask the member about confidence in the World Bank. Right now we have a situation where the World Bank is a dumping ground for failed neo-con hacks. We have Paul Wolfowitz who was the guy who basically helped initiate a war based on a lie. He was so bad he was run out of Washington. Now he is at the World Bank with his girlfriend. We are supposed to say that all the developing states in the third world should trust Paul Wolfowitz. We are supposed to tell everyone not to worry because he will look out for everyone's best interests.

Now we are seeing South Americans saying, “Whoa, we've had a whole series of failed policies through the World Bank but we certainly do not have confidence in Paul the wolf”.

Where is the protection to balance off the competing interests between investors?

[Serge Cardin, Bloc, Sherbrooke, QC]

Mr. Speaker, in reference to this little adventure, although I do not know what there was to it, there may be some reason to be fearful and think that the entire World Bank reflects it. I hope that people will succeed in fixing this and increasing the NDP's confidence in the World Bank. It is still true, though, that 156 countries have signed this treaty.

In one way or another, people have been appealing indirectly to this tribunal. Now they will be able to do so directly. Canada will benefit in other ways as well and will be able to participate in other regards, as I mentioned before.

Technically, the only thing that Canada’s joining ICSID will change is that Canada will be able to participate in the negotiations to amend the ICSID convention or regulations and rules. In addition, Canada will be assured of being able to participate in the appointment of arbitration tribunals.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, I will be speaking against implementing this International Centre for Settlement of International Investment Disputes and I will tell the House why.

A recently released report entitled, “Challenging Corporate Investor Rule”, shows that nearly 70% of cases brought to the investment dispute centre, an institution of the World Bank group by the way, settled in favour of the investor, with compensation being awarded against the country where the investment failed.

The report notes that in 7 out of 109 cases filed with ICSID, the investor's revenues exceeded the gross domestic product of the country they were suing. The case I will be describing may add to the number of these cases. These developing countries must pay fines that far exceed the gross domestic product.

The Center for International Environmental Law says that the arbitration raises a number of problems. I will describe to the House what is currently one of the big cases in front of this settlement dispute centre.

The U.K. based British investor, Biwater Gauff, is demanding $25 million from the Government of Tanzania after the latter terminated its contract with City Water Services in 2005, allegedly because the company had failed to provide clean drinking water to millions of people in Dar es Salaam. Paying $25 million to this British company is a tremendous amount of money for a very poor country like Tanzania. Biwater's 10 year contract to provide water service in this city was terminated by the Tanzanian government in 2005, only two years after it began operations in 2003. Why was that the case? It is because the Tanzanian government said that the company had not been able to provide clean water as it was supposed to for its citizens.

Normally one would think that engaging a private operator for running water service commercially is a radical departure from the free service tradition in place in that country since 1991. Why did Tanzania privatize its drinking water? It was one of the conditions imposed by the World Bank and the International Monetary Fund in order for Tanzania to qualify for debt relief under the heavily indebted poor countries initiative. Similarly, the World Bank's 2000 country assistance strategy made the signing of a concession agreement assigning the assets of this place to a private management company one of the conditions Tanzania had to meet in order to qualify for enhanced annual loans.

How did these heavily indebted poor countries get indebted in the first place? It was because the World Bank was lending them money with huge interest rates and they could not provide the debt repayment. It is an absurd situation where poor countries are sending more money to rich countries. The World Bank is telling them that in order for it to lend them even more money they must privatize their water.

This U.K. based British investor Biwater then goes in and privatizes their water. It tells the poor folks in Tanzania that it will deliver clean water but it did not do so after two years of operation. The government rightly said that it would not continue with the contract but the company took the dispute to the international centre. Seventy per cent of these cases end up in favour of the investors. It is biased against a lot of these poor developing countries.

Another organization, the Center for International Environmental Law, says that the arbitration case I am talking about raises a number of issues of vital concern to the local community in Tanzania, as well as for other developing countries that have privatized or are contemplating a possible privatization of water and other essential infrastructure services. Another organization, Public Services International, says that this dispute shows how problematic it is to include investment rules in trade investment agreements, particularly if they include investor-state provisions which allow the investor to sue host governments at international tribunals.

One of the problems with this dispute settlement mechanism is that the public has no way of knowing how the decisions are taken. The decision is not transparent. It is not clear how much the government is expected to pay if the government ends up losing. As a result, the public cannot hold a government or foreign corporate entities to account, or judge the legitimacy of the decisions. This erodes democracy.

Furthermore, because the decision is made in a body that will not be disclosed to the public, it has far reaching effects. It would seriously erode the sovereign authority of the Canadian state, and Canadians would have no say in the course of proceedings.

Instead of rushing in without any discussion with our public environmental groups and all the other NGOs, we should look at this situation very carefully.

In the case of Tanzania, what we have now is the Center for International Environmental Law from Switzerland, the Lawyers' Environmental Action Team, the Legal and Human Rights Centre, and the International Institute for Sustainable Development filing support letters and helping Tanzania in defending its case before the dispute settlement centre.

Instead of rushing in, we should ensure there is better international investment, which can bring substantial benefits to developing countries. We need to develop a comprehensive regulatory framework that actively promotes sustainable development and ensures that environmental limits are preserved.

We need to create the right regulatory framework for sustainable investment. It would require action at the regional, national and international levels.

We need frameworks that would provide host countries with the flexibility and ability to control investment flows that undermine their sustainable development targets as developed through transparent and consultative processes.

At the international level, there needs to be cooperation between states in consultation with civil society to ensure that existing and future bilateral or regional investment treaties allow host countries to set minimum environmental standards and prohibit the lowering of environmental standards to attract investment.

We need to make sure that legal barriers to suing foreign investors and forcing judgment in home countries are removed. We need to make sure detailed binding regulations are developed in environmentally sensitive industries, for example, in the chemicals and minerals industries, and that restrictive business practices such as transfer pricing, investment incentives, and bribery and corruption are addressed.

The host or recipient countries, supported by development assistance and in consultation with civil society, should strengthen their environmental and economic governance structures to support sustainable investment. That means taking measures to integrate environmental objectives into key sectoral policies such as energy, transport and agriculture and develop integrated policy packages that balance investors' rights with public needs.

Measures are needed to ensure foreign investors and domestic companies disclose any environmental and social impacts. We should also make sure that investment related activities are fully covered by environmental laws and policies including the polluter pays principle.

Home or investing countries should create mechanisms to lever additional funds from investors for projects aimed at sustainable development. Assistance to investors should be conditional on good environmental performance, for example, through export credit agencies. Development assistance that supports recipient country efforts to develop good environmental and social governance should be provided.

There also should be a mandatory code of conduct for companies to prevent those following environmental best practice from being undermined by unscrupulous competitors. At a minimum, companies must adhere to the existing OECD guidelines for multinational corporations.

Taken together, these measures and others should ensure that a proper balance is struck between protecting the rights of investors and promoting public goods. Once these measures are in place, perhaps Canada would be in a position to discuss the implementation of the Convention on the Settlement of Investment Disputes between States and Nationals of Other States. If we do not have that, we would be prematurely rushing in a World Bank mechanism that is now hurting a lot of developing countries.

[Charlie Angus, NDP, Timmins—James Bay, ON]

Mr. Speaker, I found my colleague's dissertation on this bill before us fascinating and full of very concrete information.

In her former life she was on the Toronto city council, so she brings a certain area of expertise. She might have been here when I was talking about the very mysterious Vito Gallo who is putting a hit for $350 million in the pocket of the Canadian taxpayer right now through chapter 11 dispute mechanisms. I want to ask my colleague because she followed the Adams Mine and she was at the committee hearings and meetings that went on year after year.

The member should correct me if my memory is mistaken, but was it not the people of Toronto who paid out of their homeowner tax rates for all the consultants and all the studies, not this Vito G. Gallo? Was it not the people of Toronto who paid for the drill studies, who paid basically to get that scheme up and running in the first place? Were the taxpayers of Toronto not the same people who are being hit upon by this guy who says he is being robbed of his investment? I would like to ask the member, first of all, was it not the people of Toronto who paid for everything that this Mr. Gallo is claiming?

Second, I am trying to get a sense of who Vito G. Gallo is. In fact, if the people back home know who Vito is, they should call my office. If they can help us save the Canadian taxpayer $350 million, I will at least give the people back home a T-shirt, something that reads, “I saved our system $350 million”, money that could go into culture, money that could go into health care, money that could go into international development.

In all the years, in all the meetings, in all the hearings that we had on Adams Mine has the member heard the name Vito G. Gallo ever mentioned once in any single meeting? Did this Mr. Gallo ever come out from that mysterious place where he is hiding and say, “I am the owner of this mine”? Right now he does not have to. He can go to an international dispute mechanism and say, “Give me all the money. I own everything. I am not disclosing anything because I hide behind an Ontario numbered company and the citizens of Toronto will pay for that”. The citizens of Canada who are being hit for this $350 million right now have no ability through this dispute mechanism to challenge Vito G. Gallo, whoever he is, wherever he is--

[The Deputy Speaker, Bill Blaikie]

Order. I am sure the House is anxious to hear the hon. member for Trinity—Spadina.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, I have no idea. In the years that I was a Toronto city councillor, I never heard of such a fellow. It is the hard-working taxpaying people of Toronto who paid for all the studies on the Adams Mine. I have never heard of that fellow, but I do know what $350 million can buy. It can buy very good training programs for young people, whether they are in northern Ontario or in the very much at risk neighbourhoods in downtown Toronto or Hamilton. I know $350 million would create jobs. It would create a tremendous amount of recreational activities for our young people. Summer is coming.

[An hon. member]

Child care.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Yes, child care, the environment, retrofitting of homes, there are any number of things that one could do with $350 million.

If the international mechanism is not transparent, if it is stacked against citizens, then it is harmful for democracy, for the environment. Ultimately it is the taxpayers, whether they are in Toronto, Timmins, James Bay or anywhere across Canada that it is going to hurt.

[Roy Cullen, Liberal, Etobicoke North, ON]

Mr. Speaker, I know the member for Trinity—Spadina's colleague, the member for Timmins—James Bay mentioned a few times chapter 11 of NAFTA.

We never are terribly thrilled when foreign companies can take on our own government policies, but is the member for Trinity—Spadina aware that chapter 11 can also be used, and has been used, by Canadian companies to attack U.S. policies that are prejudicial to the assets of Canadian companies? I can give a case in point.

The international trade minister in his previous life was CEO of Canfor, one of the largest forest products companies in Canada. Canfor to its credit launched a chapter 11 against the U.S. government saying that the countervailing duty process was patently unjust and unfair, that it lacked in due process and objectivity. Of course, when he went to the Conservative Party he changed his tune. I remember at the time forest products companies in Canada being encouraged to attack under chapter 11.

Is the member for Trinity—Spadina aware that the provision can be used by Canadian companies against foreign governments as well?

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, I remember in the debate on free trade former Prime Minister John Turner saying, “We are going to oppose free trade”. Then I remember Mr. Chrétien running in an election saying, “We are going to tear up the trade deal”. What happened? Speaking about changing their tune, not only did we sign on to NAFTA, but chapter 11 did not get torn up. It did not get negotiated properly. It did not get renegotiated even though it was promised over and over again that there would be some kind of renegotiation. What happened?

What is happening now with chapter 11 is multinational companies are allowed to sue, whether it is municipalities, provinces or other governments. I remember the case of Hudson where the local government said that it would ban pesticides. It was sued under chapter 11. How much money did that cost the taxpayers in Hudson and taxpayers across Canada? And why can a local government not decide to ban pesticides?

Do not tell me about changing tunes because I know that is a Liberal habit.

[James Moore, Conservative, Parliamentary Secretary to the Minister of Public Works and Government Services and Minister for the Pacific Gateway and the Vancouver-Whistler Olympics]

Mr. Speaker, I had no intention of entering this debate; however, the member opposite is taking shots at chapter 11 of NAFTA, as my colleague from across the way raised.

Chapter 11 extends the right of Canadian companies the same legal powers that existed for foreign companies to sue the Canadian government for changing laws under unfair treatment and it extends that principle of equal treatment for Canadian companies operating in other countries. What chapter 11 does is it empowers Canada, it empowers Canadian companies, so that we can do business abroad and be treated equally with companies in those domestic nations.

Chapter 11 has been a huge benefit to Canada, has extended free trade, has created tens of thousands of jobs. How in the world can she get up in her place, in full sobriety, and actually argue against chapter 11? My God.

[Olivia Chow, NDP, Trinity—Spadina, ON]

Mr. Speaker, tell every forestry worker who has been laid off in the last few years that chapter 11 of NAFTA is doing a marvellous job for them. Tell them that. Tell them it has certainly empowered the Canadian government and all the lumber companies.

Guess what? About $1 billion of Canadian money was left. Even though we won, so what? We gave up that right. It does not matter whether we win or not because we have a government that will actually reward the bullies who are completely ignoring trade agreements, even though we win.

Yet, over and over again, and we just saw the softwood lumber sellout, we said we will back-off and we left $1 billion on the table. Think of what $1 billion could do for those hard-working families in northern Ontario and Quebec who are losing their jobs because of this softwood sellout.

[The Deputy Speaker, Bill Blaikie]

The time for questions and comments has expired. Resuming debate.

Is the House ready for the question?

[Some hon. members]

Question.

[The Deputy Speaker, Bill Blaikie]

The question is on the motion. Is it the pleasure of the House to adopt the motion?