Multilateral Agreement on Investment

Examining the MAI - Who wants corporate rule?

By Aaron Koleszar, in The Guardian (Charlottetown)
13 March 1998

Below is my op-ed, and ethyl's response. i will respond to ethyl's letter. i left him a small hole, by saying that MMT was banned in Canada (it's not "technically" banned). he also says that it isn't damaging to health and it's good for controlling greenhouse gasses.

The purpose of the Multilateral Agreement on Investment (MAI) is not to regulate investment, but to regulate governments. The main goal is to disallow laws which affect foreign investors' profits. In alternative, if any laws or regulations (even those made in the public interest) affect a foreign investor's profits (or reputation), the MAI entitles that investor to monetary compensation equivalent to the estimated loss in profits.

On February 13, 1998, Sergio Marchi said "We have no intention of leaving the government open to the prospect of being hauled before an international tribunal by companies or investors from any of 28 or eventually 100 or more countries whenever it legislates to safeguard the interests of our people." However, the MAI stipulates that EVEN THOSE LAWS MADE IN THE PUBLIC INTEREST that in any way negatively impact a foreign investment must be accompanied by compensation. Marchi is up to his old tricks of doublespeak. Any measures which don't conform to the MAI would be subject to "rollback," (elimination), and "standstill" would keep any non-conforming regulations from being enacted.

Who does the MAI benefit? Foreign investors, in other words: large transnational corporations, or the rich. Mainstream theory contends that foreign investment creates jobs. What we have been seeing however, is that large corporations fire, lay off, or "downsize" thousands of jobs in order to increase their profitability. While a rare large corporation may create jobs, this is the exception to the rule. While government officials and economists spout off hollow theories about how many jobs are created for every million dollars of foreign investment, more people are fired. The BC forest industry is a prime example of huge foreign investment, and subsequent layoffs of thousands upon thousands of workers. There are countless other examples.

The MAI was originally drafted by the International Chamber of Commerce (the rich), then taken to the World Trade Organization (WTO), where it was rejected by the poorer countries who felt it would hamper, if not remove their rights. Next, it was taken to the Organization for Economic Cooperation and Development (OECD), the rich countries' club of 29 of the richest countries in the world. The entire process has been rife with secrecy and deception. The MAI was kept totally secret from the public until one year ago. Then, as luck would have it, a copy of the draft MAI was leaked, and spread around the world via the Internet. Yet the mainstream media (with limited exceptions) refrained from covering the story, and the public remained blissfully unaware. Even most Canadian MPs knew nothing of it for six months or more. Many government officials denied the existence of the MAI throughout the year, and others assured us it was only in its infancy. Provincial government officials were kept in the dark, and knew little or nothing about it even as late as December (or later). In Canada, no thanks to the federal government, there has been some public discussion of the MAI. In this we are nearly alone, as public discussion in other countries has only begun in February, if at all. The federal government only met with the provinces as a reaction to their MAI opposition and public discontent. The secrecy up to this point shows that the federal government is NOT acting in good faith, and has continuously tried to pull the wool over our eyes. The government has not even made an effort to inform their constituents of the implications of the MAI. If they had their way, the MAI would have been signed last May, before the public knew about it at all. The MAI Dispute Resolution System (MAIDS) would decide who is right in the case of a disagreement. This MAIDS panel will consist of three individuals from the OECD, hearings will be conducted in secrecy, and decisions are final, with no chance for appeal. To top it off, this process is only available for foreign investors. The protections and powers that foreign investors are given under the MAI do not apply to local investors. An example of how governments could be sued is presently taking place under NAFTA. Ethyl Corp., a US company, has filed a suit against the Canadian government. The suit claims that a Canadian law, in effect banning the toxic gasoline additive MMT, constitutes an expropriation of property. Ethyl Corp. is demanding $350 million in compensation for lost profits and a damaged reputation. Under the MAI, this right to sue would be extended to all signatory countries. Already precedents are being established that do not bode well for Canada, or for any country interested in maintaining its right to form laws and regulations.

The MAI restricts the right of governments to impose performance requirements on foreign investors that would, for example, force them to hire locally or use local suppliers. The MAI could overrule all other international treaties on environment, human rights, climate change, etc. Foreign companies could be given unfettered access to our resources. Limits to foreign ownership of land, as on PEI, would be rendered impotent. Our government could not specify that fishing licences be given to Canadians and/or Islanders, even for conservation purposes.

One reason given for the necessity of the MAI, is that there are thousands of trade agreements out there, and this makes investment difficult. However, the Business Council on National Issues, one of this country's most influential business lobby groups, could not give an example of where an outward investment from Canada has been treated unfairly. The MAI does nothing to control the excesses of irresponsible investment. In fact it gives investors new rights - and no obligations!

In their statement, of Thursday, February 19, the federal and provincial trade ministers "agreed on the desirability of public consultations to defend key interests in such areas as labour, the environment, health, and other social services, natural resources, culture, expropriation, and extraterritoriality.'' Despite how they make it appear, this is by no means a commitment to cross-Canada public consultations. I predict that there will be no such consultations, because the government knows exactly what the public's response would be - rejection of the MAI.

There is no question that foreign investment creates a "healthy economy", at least in the short term. A "healthy economy" however, has no relation to the well-being of the citizens. An economy's "health" is measured by dollars spent (or GDP). But it doesn't matter how much money is being spent if most of it is going into the pockets of the rich. High unemployment is often a key part of a "healthy economy." Globalization and economic growth do not benefit the people, they benefit the rich. And the gap between the rich and the poor is growing every day, in Canada and around the world. There is more than enough wealth to go around, it's just a matter of who owns that wealth - definitely not us. Globalization and the MAI will only continue to collect the resources and money into the hands of the few, at the expense of the rest... and the poor will continue getting poorer and hungrier.

If we are to have an international agreement on investment, it should be to protect citizens, jobs, culture, and the environment from investors, such as Canadian mining companies, who have a long history (and present day legacy) of polluting Latin American rivers, and of destroying pristine rainforests. But that's a little too much to ask from our politicians, isn't it? The numbers of MAI opponents are swelling dramatically and we are gaining momentum, but look for the federal government to launch a pro MAI public relations blitz. If citizens don't take action now, a giant step will be taken toward the completion of corporate rule.

Response from Ethyl Corp.: The Facts on MMT

Re: 'Examining the MAI: who wants corporate rule?' (The Guardian, March 13, 1998).

Aaron Koleszar's opinion piece of March 13, 1998 (examining the MAI: who wants corporate rule?) contains a vivid example of the type of non-scientific innuendo that pervaded the debate on bill C-29. C-29 is the act passed by Parliament which banned the importation and interprovincial trade of MMT. MMT is a fuel additive which has been used in Canadian gasoline since 1977, improves the performance of gasoline and cuts nitrogen oxide emissions by up to 20 per cent. Nitrogen oxide is one of the major causes of urban smog.

Mr. Koleszar should have done his research. He got it wrong when he states quite emphatically that ''The suit claims that a Canadian law banning the toxic gasoline additive MMT constitutes an expropriation of property.'' The legislation that was passed did not ban MMT, it banned the importation and interprovincial transportation MMT. And despite the claims of Mr. Koleszar, there is nothing wrong with MMT from both an environmental and health perspective. In fact, MMT has been given a clean bill of health by Health Canada and it certainly does not have a detrimental effect on the environment. Quite the contrary, it has been proven in independent testing that MMT is one of the few gasoline additives which reduces the amount of greenhouse gases that are emitted.

MMT was not banned outright by the federal government because there is nothing wrong with it. If there was, then I am sure that both Environment Canada and Health Canada would have pushed for the outright ban. The federal government bowed to the pressure from the automobile companies and passed the trade legislation and this had led to trade problems both internationally and nationally.

Jim Hanes, Ethyl Canada, Mississauga, Ont.