The Sinister Reason Canada Bought The Kinder Morgan Pipeline

June 7th, 2018 by Steve Hanley

CleanTechnica contributor Michael Ballard published a well researched analysis of the economics behind Canada’s decision this month to buy the Trans Mountain pipeline from Kinder Morgan for $4.5 billion. He suggests the pipeline is intended to provide China with a reliable source of petroleum for its future needs and questions whether, with China’s increasing reliance on renewable energy, those needs will ever materialize.

Say Hello To FIPA

That’s a good question, but Bruce Livesey, writing in The Guardian, suggests the real reason may have little if anything to do with economics (the deal actually makes no economic sense for Canada) and everything to do with an obscure bit of legal mumbo jumbo called the Canada-China Foreign Investment Promotion and Protection Agreement or FIPA.

Never heard of such a thing? You’re not alone. FIPA is what Canada calls a bilateral investment treaty. Such agreements are common in international business but virtually unknown to the general public. In effect, they transfer a piece of national sovereignty to a foreign corporation, which can then challenge public policies or community decisions that go against its financial interest.

For instance, Livesay refers to an instance in which a Chinese insurance company launched a $2 billion arbitration claim against Belgium pursuant to the provisions of a foreign investment protection treaty. When the United States cancelled the XL Pipeline in 2016, Canada filed a $16 billion dollar claim for damages against the US under the terms of a FIPA that was included in the North American Free Trade Agreement.

Canada has paid $160 million to American corporations who say they suffered economic losses because of public policies enacted by federal, provincial, or local authorities. Canadian mining companies have sought millions in damages from developing nations who had the temerity to enact policies opposing mega projects they believed would harm their environments.

The FIPA with China was signed by the Harper government in 2014. It allows Chinese energy companies to challenge local, provincial, and federal policies or laws that interfere with their “right” to make a profit from energy projects. So any environmental regulations, or halted pipelines, or First Nations land claims, could become the subject of lawsuits brought by Chinese corporate interests. The same applies to Canadian corporations who feel China has impeded their ability to make a profit. The agreement, which was never approved by Parliament, will remain in effect until 2045.

Secret Awards

Gus Van Harten, an international investment lawyer at Osgoode Hall law school in Toronto, tells The Guardian, “More troubling, there is no requirement in the treaty for the federal government to make public the fact of a Chinese investor’s lawsuit against Canada until an award has been issued by a tribunal. This means that the federal government could settle the lawsuit by paying out public money before an award is issued, and we would never know.”

Livesey claims that Premier Justin Beiber Trudeau is “desperate to keep China happy. In 2016, his government began negotiating a free trade agreement with China. At the time, the Globe and Mail reported a senior Chinese official said such an agreement will require Canadian concessions on investment restrictions and a commitment to build an energy pipeline to the coast. Less than a year later, Trudeau approved the expansion of the Trans Mountain pipeline. Talks for the free trade agreement are ongoing.”

Civil Disobedience Ahead

“Now that Canada has bought the pipeline from Kinder Morgan,” Livesey adds, “there are likely to be court cases, protests, and other acts of civil disobedience. In what might be a strategy to avoid lawsuits from Chinese companies that could result in massive secret payouts, Trudeau’s government may find itself arresting Canadians.” Indeed, the Calgary Sun quotes United Conservative leader Jason Kenney as saying if illegal protests become widespread, the Trudeau government may have to call in the army.

Tzeporah Berman is the woman who organized the largest civil protests in Canadian history in the 1990s. She tells the Calgary Sun tens of thousands of people in western Canada are fully prepared to put their bodies in the path of the Trans Mountain pipeline. “This is the birthplace of Greenpeace,” she says. “This is one of the most engaged populations in the country on environmental issues and Indigenous rights. It’s not just individuals or environmentalists or hippies who are opposed to this pipeline.” How many of those protesters will know their own government has sold them down the river in a secret sweetheart deal?

What Does Any Of This Have To Do With Clean Tech?

Is your blood boiling yet? It should be. For those of you in the back of the room muttering, “What does this have to do with clean tech?” the answer is “Everything.” It is the smoking gun, the dirty little secret about how fossil fuel companies game the system. They have so much power and so much influence, they can force governments to hand over the sovereign power of entire nations and keep their nefarious dealings secret.

No wonder all efforts to force them to shoulder the costs of the pollution they create come to naught. No wonder they are able to get state governments to pass laws making criminals of anyone who dares protest against them. This, folks, is raw, naked power on display by those who could care less if they destroy the entire planet and every living thing on it in order to keep the money machine going.

Which leaves only two questions unanswered. Why are the people who demand these secret agreements and those who agree to them not in prison? And if stealing a nation’s sovereignty is not treason, what is?









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