AbitibiBowater NAFTA settlement has privatized Canadian water, trade committee hears

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From The Council of Canadians – March 8, 2011

Ottawa – The record-setting $130-million NAFTA settlement with
AbitibiBowater has effectively privatized Canada’s water by allowing
foreign investors to assert a proprietary claim to water permits and
even water in its natural state, says trade lawyer and Council of
Canadians board member Steven Shrybman, in a presentation to Parliament
today.

“It would be difficult to overstate the consequences of
such a profound transformation of the right Canadian governments have
always had to own and control public natural resources,” says Mr.
Shrybman in his presentation to the Standing Committee on International
Trade, which is studying the AbitibiBowater NAFTA settlement from last
August.

“Moreover, by recognizing water as private property,
the government has gone much further than any international arbitral
tribunal has dared to go in recognizing a commercial claim to natural
water resources.”

In 2008, AbitibiBowater, a Canadian firm
registered in the United States, closed its pulp and paper mill in
Grand Falls-Windsor, NL. The company asserted rights to sell its
assets, including certain timber harvesting licenses and water use
permits. These permits were contingent on production. More importantly,
under Canada’s constitution they are a public trust owned by the
Province, not by private firms. So the Newfoundland government moved to
re-appropriate them as it has a right to do under Canadian law.
AbitibiBowater sidestepped the courts to challenge the Newfoundland
government.

“The case clearly put the concept of water as a public
trust on a direct collision course with treaty-based corporate and
commercial rights. However, rather than defend public ownership and
control of water, the federal government has agreed to settle
AbitibiBowater’s claim,” says Mr. Shrybman. “By stipulating that the
payment of compensation is on account of rights and assets, the
government of Canada has explicitly acknowledged an obligation to
compensate AbitibiBowater for claims relating to water taking permits
and forest harvesting licenses.”

By settling with the company rather than
challenging its case, we have no response from the federal government
to refute the company’s proprietary claims to water and timber rights,
explains Mr. Shrybman. The settlement also fails to identify the
particular rights for which compensation will be paid, and makes no
attempt to exclude any of the company’s claims, “thereby acknowledging
the validity of the claims.”

“Moreover, by recognizing a proprietary
claim to water taking and forest harvesting rights, Canada has gone
much further than any international tribunal established under NAFTA
rules, or to our knowledge, under the rules of other international
investment treaties,” he says.

A statement by the government that the settlement shall
not set a precedent is “entirely ineffective,” because of NAFTA’s
National Treatment clause which grants foreign companies treatment no
less favourable than national companies in like circumstances.

“It is not therefore an overstatement to describe the
consequences of this settlement as effectively representing a
coup-de-grace for public ownership and control of water and other
natural resources with respect to which some license or permit had been
granted.”

Shrybman suggests water takings by tar
sands operations in Alberta, a golf course in Ontario or a water
bottling plant in Quebec are other examples of where even a partial
recovery of water rights by the provinces could detrimentally affect
business. If any of these companies were foreign owned they could claim
compensation on the same terms granted AbitibiBowater.

***

The Council of Canadians strongly believes there is no
place in existing or future trade agreements for such overstretching
investment protections. It has repeatedly called on the federal
government to reopen NAFTA to remove the investor-to-state dispute
process. The Council also recently joined several other Canadian
organizations in writing to all members of the European Parliament
urging them to reject the inclusion of NAFTA-like investment
protections in the Canada-EU Comprehensive Economic and Trade Agreement
(CETA), which could be signed by the end of the year.

Read original press release

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About Damien Gillis

Damien Gillis is a Vancouver-based documentary filmmaker with a focus on environmental and social justice issues - especially relating to water, energy, and saving Canada's wild salmon - working with many environmental organizations in BC and around the world. He is the co-founder, along with Rafe Mair, of The Common Sense Canadian, and a board member of both the BC Environmental Network and the Haig-Brown Institute.

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