Canada's Strict New Anti-Corruption Rules Might Lead To Yet More Corporate Sovereignty Lawsuits Against It

from the no-good-deed-goes-unpunished dept

Recently, we wrote about the extraordinary free trade agreement between Canada and China that places itself above the Canadian constitution. Here's another development where Canada can serve as a warning to the rest of the world about the dangers of giving too much power to corporations in free trade agreements, as reported by the The Globe and Mail: Canada risks being hit with a World Trade Organization challenge and NAFTA investor lawsuits over its threat to bar some companies from selling to the government for up to 10 years, warns a report commissioned by the Canadian Council of Chief Executives (CCCE) and delivered to federal officials.



And a number of foreign multinationals are already exploring possible trade action, according to an industry source, who declined to be named. The problem is that Canada has introduced new anti-corruption rules: Under the newly revised federal regime, companies seeking to bid on federal contracts must certify that neither they nor their affiliates have been charged with a long list of criminal offences anywhere in the world, including bribery and fraud, dating back 10 years. Apparently, the inclusion of affiliates is much stricter than anti-corruption laws elsewhere, and that might open up Canada to claims that it is unreasonable for Canadian subsidiaries of foreign companies to be held responsible for the actions of other affiliates over which they have no control. No lawsuits have yet been filed, so it's too early to say how serious this threat is. But it certainly emphasizes how signing up to corporate sovereignty chapters in free trade agreements -- in this case, the 1994 North American Free Trade Agreement -- increases the risk that companies will use them in unexpected ways to attack governments when they introduce new policies, however praiseworthy those may be.

Follow me @glynmoody on Twitter or identi.ca, and +glynmoody on Google+

Thank you for reading this Techdirt post. With so many things competing for everyone’s attention these days, we really appreciate you giving us your time. We work hard every day to put quality content out there for our community. Techdirt is one of the few remaining truly independent media outlets. We do not have a giant corporation behind us, and we rely heavily on our community to support us, in an age when advertisers are increasingly uninterested in sponsoring small, independent sites — especially a site like ours that is unwilling to pull punches in its reporting and analysis. While other websites have resorted to paywalls, registration requirements, and increasingly annoying/intrusive advertising, we have always kept Techdirt open and available to anyone. But in order to continue doing so, we need your support. We offer a variety of ways for our readers to support us, from direct donations to special subscriptions and cool merchandise — and every little bit helps. Thank you.

–The Techdirt Team

Filed Under: anti-corruption, canada, china, corporate sovereignty, free trade, isds, trade agreements