Quebec Fracking Ban Lawsuit Shows Perils of Free Trade Deals

If you read our latest Truthdigger column, you know that certain existing and potential future international trade deals (including the wildly underreported Trans-Pacific Partnership, which is a subject of secretive, ongoing negotiations) allow private corporations to sue governments for profits they claim to have lost as a result of a nation’s laws. Here’s an example of such a suit currently filed against Canada.

A company called Lone Pine Resources Inc. is seeking $250 million in damages from the Canadian government because of Quebec’s moratorium on fracking, an environmentally destructive method of extracting oil and natural gas. The Council of Canadians, the Sierra Club and the Quebec-based water protection group Eau Secours say the suit shows how trade deals that include “investor protection clauses” can prevent governments from passing laws to protect the environment.

Company President Tim Granger is unsympathetic to the groups’ concerns. “As an organization we, in good faith, purchased leases, we paid rentals and then to just have been stymied, that’s not acceptable,” The Canadian Press quoted him as saying in an interview. “What we are asking for is some level of restitution for losses we have incurred and what we could have potentially received if we were allowed to develop those leases.”

The statement of claim filed Sept. 6 says the company “expended millions of dollars and considerable time and resources” on the project and that the Quebec government was “arbitrary” and “capricious” in revoking the rights before an environmental study on fracking in the area was completed, The Candadian Press reported.

Ilana Solomon, director of the Sierra Club’s trade program in Washington, D.C., spoke to the suit’s effect on the public welfare. “If a government is not even allowed to take a time out to study the impact without having to compensate a corporation, it puts a tremendous chill on a government’s ability to regulate in the public interest.”

— Posted by Alexander Reed Kelly.

The Canadian Press via The Huffington Post:

Stuart Trew, a trade campaigner with the Council of Canadians in Ottawa, which has generally been critical of trade deals, says the suit has attracted attention in Europe, Australia and other countries contemplating major trade deals.

Canadians should expect more lawsuits if it completes trade deals with the European Union and in the Trans-Pacific Partnership, he said, since both are likely to include investor protection provisions similar to the one found in NAFTA.

“These investment protections are going to be built into these mega-trade deals and this Lone Pine case has become kind of the poster child for what’s wrong with giving corporations the right to sue governments when they don’t like certain policies,” he said.

“We have no confidence the government is going to be able to limit cases brought by European countries, In fact, (the Canada-EU trade deal) could lead to more cases than have happened under NAFTA.”

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