SPECIAL COMMITTEE ON THE MULTILATERAL AGREEMENT ON
INVESTMENT
SECOND REPORT
Third Session, Thirty-sixth Parliament
June 29, 1999
RECOMMENDATION 1
Your committee recommends that the federal government hold hearings in all regions of the country to provide the Canadian public an opportunity to debate Canada's interests and objectives in international investment negotiations. In the meantime, the committee will continue with the second phase of its hearings in various regions of the province in order to provide British Columbians with an opportunity to express their views on the important issues raised by the MAI and similar provisions in other investment negotiations.
RECOMMENDATION 2
Your committee recommends that multilateral negotiations on global investment rules must include the full participation of developing countries and must address developing country interests and concerns. Negotiations at the OECD should be terminated and shifted to a genuinely multilateral forum mandated to consider investment and development needs, such as the United Nations Conference on Trade and Development.
RECOMMENDATION 3
Your committee recommends that Canada pursue multilateral rules on investment that integrate the protection of investment interests with the broader interests and concerns of civil society and ordinary citizens. The committee stresses the need for greater openness and democratic debate in developing these rules.
RECOMMENDATION 4
Your committee recommends that exchanging reciprocal commitments not to discriminate, through the national treatment and most-favoured nation principles, should be an important objective of multilateral investment negotiations. Any future investment negotiations should be a "bottom-up" process. Treaty obligations would apply to sectors and measures that are specifically identified, instead of the opposite "top-down" approach in which all sectors and measures are covered unless specifically exempted.
RECOMMENDATION 5
Your committee recommends that as long as such requirements are transparent and apply equitably to domestic and foreign investors, an international investment treaty should not prevent governments from negotiating or enforcing performance requirements intended to meet economic development, environmental, or other legitimate objectives.
RECOMMENDATION 6
Your committee recommends that in the case of an expropriation for a public purpose, foreign investors must be assured of identical treatment under domestic law, the same rights to prompt, adequate and effective compensation as domestic investors and full access to the domestic court system to litigate disputes. Foreign investors do not require special rights beyond those accorded to Canadian investors and citizens.
RECOMMENDATION 7
Your committee recommends that provisions concerning "measures tantamount to expropriation" should be eliminated from the MAI and similar agreements. Furthermore, the federal government should engage immediately with its NAFTA partners to gain effective binding agreement that regulatory takings are not compensable under NAFTA's investment provisions.
RECOMMENDATION 8
Your committee recommends that the investor-state mechanism -- which enables a foreign-affiliated investor to bypass the domestic court system and challenge government measures before international arbitral panels -- should be eliminated. The use of international commercial arbitration procedures should be limited to their original and proper purpose, the adjudication of contract disputes, where the parties, whether governmental or private, expressly consent to submit the specific dispute to arbitration.
RECOMMENDATION 9
Your committee recommends that the government of Canada reopen NAFTA chapter 11 to eliminate the investor-state dispute settlement procedure.
RECOMMENDATION 10
Your committee recommends that because country-specific reservations provide only limited and temporary protection, they are therefore inadequate to safeguard vital Canadian and British Columbian interests. More effective means to safeguard such vital interests, combining a "bottom-up" negotiating process, prudential carve-outs, and general exceptions, must be achieved.
RECOMMENDATION 11
Your committee recommends that future negotiations should not include the concepts of "standstill" or "rollback." More flexible methods of maintaining a fair balance of commitments and obligations must be utilized, such as authorizing other contracting parties to withdraw reciprocal benefits, or to negotiate compensation, when a future government withdraws a commitment made by a previous one.
RECOMMENDATION 12
Your committee recommends that Canada should fully implement the OECD code outlawing bribery and seek to extend it to non-member countries. Canada should negotiate on a multilateral or bilateral basis with developing and emerging economy governments to ensure due process and non-discriminatory treatment for foreign investors under the host country's domestic law. Canada's bilateral investment treaties, should be reopened to focus on non-discrimination and transparency and to eliminate provisions creating special rights for foreign investors beyond those accorded to Canadians.
RECOMMENDATION 13
Your committee recommends that the Canadian government take a leadership role in developing a broad international coalition of governments, cultural creators, and cultural organizations to achieve international trade and investment rules that fully respect cultural sovereignty, diversity and plurality.
RECOMMENDATION 14
Your committee recommends that in all ongoing and future trade and investment negotiations Canada must gain a comprehensive cultural carve-out that is broad, self-defining, preserves future policy flexibility, and is effective against all obligations in the agreement.
RECOMMENDATION 15
Your committee recommends that the granting of concessions, licences, authorizations, and permits, including of rights to develop publicly owned natural resources, should be excluded from the definition of investment in the MAI and other multilateral investment agreements.
RECOMMENDATION 16
Your committee recommends that any multilateral investment agreement to which Canada is a party should contain a prudential "carve-out" for environmental protection, natural resource management, and conservation measures, to the effect that: "Notwithstanding any other provisions of the agreement, a contracting party shall not be prevented from taking prudential measures with respect to environmental protection, resource management and conservation, and related health protection matters."
RECOMMENDATION 17
Your committee recommends that any future multilateral investment agreement to which Canada is a party must contain a "carve-out" for measures related to health, education and social services, to the effect that: "Notwithstanding any other provisions of the agreement, a contracting party shall not be prevented from taking any measure with respect to the protection of health and the provision of health, education, child care and other social services."
RECOMMENDATION 18
Your committee recommends that Canada should revisit the NAFTA Annex II-C-9 reservations and corresponding American and Mexican reservations, to ensure that health, education, and other social services are fully and effectively excluded from the NAFTA.
RECOMMENDATION 19
Your committee recommends that the international trade and investment negotiating agenda must now be broadened to include effective and enforceable protection of core labour standards and basic human rights. The commitment by developed countries of substantial financial transfers to promote the upward reconciliation of labour, social and environmental protection standards in developing and transitional economies must also be a central component of any trade and investment integration initiatives.
RECOMMENDATION 20
Your committee recommends that sanctions which are genuinely intended to promote respect for and enforcement of human rights must be effectively exempted, at all levels of government, from national treatment, most-favoured nation and any special provisions developed to deal with the issues of "extraterritoriality" or "secondary investment boycotts."
RECOMMENDATION 21
Your committee recommends that in any ongoing or future investment negotiations, the federal government must fulfil its constitutional obligation to consult First Nations, including British Columbia's First Nations. In such negotiations Canada must satisfy British Columbia's First Nations and the province that the federal government has achieved complete and fully effective protection not only for measures related to aboriginal peoples, but for aboriginal self-governments and the treaty-making and implementation process.
RECOMMENDATION 22
Your committee recommends that when negotiating the MAI or any future investment treaty, the federal government must ensure that the agreement does not apply to matters within provincial jurisdiction, including local government matters, without the express consent of the Legislative Assembly of British Columbia. Such consent must be obtained before the federal government makes international commitments that apply to provincial or local government measures. If the federal government fails to provide for such consent, then the provincial government should explore all means, including legal action, to defend vigorously its own jurisdictional rights and those of local governments to represent the interests of British Columbians.
RECOMMENDATION 23
Your committee recommends that prior to engaging in any future international trade and investment negotiations, the Canadian government ensure that there must be an open negotiating process with full consultation with all interested citizens in all regions and that draft negotiating texts are made publicly available to Canadians as negotiations proceed.
RECOMMENDATION 24
Your committee recommends that before engaging in any future international trade and investment negotiations the federal government undertake a comprehensive public review of current Canadian international trade and investment policy with particular emphasis on the implications of NAFTA's investment provisions. Such a review should result in substantive changes in the Canadian government's existing international investment commitments as well as its negotiating objectives in any future negotiations.
RECOMMENDATION 25
Your committee recommends that the federal government end its support for including NAFTA-style investment rules in bilateral investment treaties, the Free Trade Area of the Americas talks and in the next phase of negotiations at the World Trade Organization.
RECOMMENDATION 26
Your committee recommends that the federal government act immediately and decisively to reinforce B.C. legislation banning bulk water removals by enacting federal legislation to prohibit bulk water removals from Canada.
RECOMMENDATION 27
Your committee recommends that if the Sun Belt NAFTA challenge proceeds, the province initiate a legal action challenging the federal government's authority to submit British Columbia's environmental prohibition on bulk water removals to binding international arbitration and potential monetary damages under NAFTA's investment chapter.
RECOMMENDATION 28
Your committee recommends that the provincial legislature consider a resolution endorsing the development of a Tobin tax on international financial transactions that could curb the flow of short-term, speculative capital flows and raise resources to promote global economic development and reduce world poverty.
RECOMMENDATION 29
Your committee recommends that the provincial legislature consider a resolution endorsing the Canadian faith communities' Jubilee initiative to forgive the debt of the world's poorest nations.
RECOMMENDATION 30
Your committee recommends that prior to engaging in any future international trade and investment negotiations the federal government undertake a comprehensive public review of Canadian international trade and investment policy. Such a review should include an assessment of the environmental, social and economic impacts of investment rules in existing agreements. It should also consider substantive changes in the Canadian government's existing international commitments as well as its negotiating objectives in any future negotiations.
RECOMMENDATION 31
Your committee recommends that prior to engaging in any future international trade and investment negotiations, Canadian federal and provincial governments, business, civil society and interested citizens develop a new Canadian negotiating mandate that ensures that new international rules fully integrate social, environmental and cultural priorities with trade and investment concerns.
RECOMMENDATION 32
Your committee recommends that prior to engaging in any future international trade and investment negotiations the federal and provincial governments develop a framework that ensures that Canada's international trade and investment obligations respect Canada's constitutional division of powers and provide for the express consent of provincial legislatures before Canada makes commitments involving matters falling within provincial jurisdiction.
RECOMMENDATION 33
Your committee recommends that the province establish an advisory committee comprised of business and civil society representatives to advise the provincial government on developing B.C.'s position and advancing B.C.'s interests in future international trade and investment negotiations.
RECOMMENDATION 34
Your committee recommends that the Legislative Assembly consider creating a special committee to advise the provincial government on developing B.C.'s position and advancing B.C.'s interests in future international trade and investment negotiations.
49 These recommendations are listed in the order they appear in the first and final reports, not in order of priority.
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