Wealthy companies often use the governments of rich countries to enact rules on poorer countries to squeeze more profits out of them.
Corporate mining interests in Canada are partnered with Justin Trudeau’s Liberal government—as they have with Stephen Harper’s Conservatives in the past—to enact Canadian foreign policy that protects their profits while leaving governments of Africans countries out of the benefits of resource extraction.
During a recent visit, Trudeau announced negotiations on a Foreign Investment Promotion and Protection Agreement (FIPA) with Ethiopia. FIPAs empower international investors by giving corporations the right to sue governments (in private, investor-friendly tribunals) for pursuing policies that interfere with their profit making. As such, these unfair agreements can undermine a poorer country’s government and their ability to democratically determine economic and ecological policy. Since few African companies invest in Canada, there is little chance Ottawa will face a suit or feel domestic policy pressure as a result of the unbalanced power dynamic in the FIPAs they sign with countries like Ethiopia.
The governing Liberals have also signed unfair FIPAs with Nigeria and Moldova, and are negotiating them with a half dozen other countries. Following his participation in the November 2018 Africa Investment Forum, Parliamentary Secretary to the Minister of International Trade, Omar Alghabra, stated: “To further help Canadian companies compete and succeed in this thriving region, the Canadian government has negotiated foreign investment promotion and protection agreements (FIPAs) with Benin, Burkina Faso, Cameroon, Ivory Coast, Guinea, Mali, Senegal and Tanzania. These agreements encourage increased bilateral investments between our countries by helping to reduce risk and by increasing investor confidence in our respective markets. We continue to advance FIPA negotiations with a number of other African countries.”
Not only are FIPAs being signed between capital wealthy Canada and poorer countries in Africa, FIPAs are overwhelming designed to protect mining companies. There is much to indicate how these bilateral investment treaties are being driven by corporate mining interests.
The federal government, for instance, has previously announced FIPA signings at the Prospectors and Developers Association of Canada (PDAC) Conference in Toronto. During the 2017 PDAC Conference, then Minister of International Trade, François-Philippe Champagne, announced the coming into force of the Canada-Mongolia Foreign Investment Promotion and Protection Agreement. The agreement provided substantial protections for Canadian investors in Mongolia, where there are already significant Canadian-owned mining assets.
The PDAC Conference was also an opportunity to demonstrate the closeness between Canadian foreign policy and mining corporations during the Harper era. At the 2014 Conference, the Harper government announced FIPA signings with Cameroon and negotiations with Kenya.
Despite the appearance of a mutually beneficial partnership between two countries, there are many examples where Canadian mining companies have turned to bilateral investment treaties to sue governments of poorer states. As the Council of Canadians pointed out, “Canadian mining companies are using FIPAs with developing countries to claim damages from community opposition to unwanted mega-projects.”
Broadly, the aim of a FIPA is to counter “resource nationalism” where countries take ownership of their natural resources. Having benefited from decades of privatizations and loosened restrictions on foreign investment through neoliberal globalization, mining companies fear a reversal of these policies. These concerns can be somewhat alleviated by gaining rights to sue a government if it expropriates a concession, changes investment rules, or requires value added production take place in the country.
Writing in Canadian Dimension, Paula Butler notes: “Canada appears keen to negotiate FIPAs with some of the most economically and politically vulnerable but resource rich African countries before they develop a taste for resource sovereignty.”
The deputy head of Africa forecasting at political risk firm Exclusive Analysis, Robert Besseling, told the Toronto Star in 2013 that resource nationalism was top a concern for Canadian mining companies. Besseling described “a trend toward what some call resource nationalism that’s seen a number of African governments — after opening doors to foreign investors — begin to reverse or revise regulations. Under pressure from civil society groups and labour unions, governments are driving a harder bargain or changing the rules of the game part way through.”
To Canada, any government that increases resource royalty rates or nationalizes extractive industries is a threat to Canadian mining interests. Yet, many in Africa believe natural resources should be publicly held, or at minimum, heavily taxed. Some simply want minerals to remain underground due to the environmental and social impact that extraction would have.
Ottawa’s “goal” in signing FIPAs with African governments, note Butler and Evans Rubara, “is to prevent control of mining policy throughout the continent from falling into the hands of nationalist, pro- African, pro-community political forces who will promote a vigorous ‘resource nationalism’ agenda.”
Or, to put it more bluntly, the Trudeau government, like the Harper regime, continues to defend the profits of a few wealthy owners of mining corporations who steal from Africans. Meanwhile, hundreds of millions continue to face the social and environmental impacts of resource extraction, without the supposed economic benefits mining and foreign investment are said to bring.
Yves Engler has been dubbed “one of the most important voices on the Canadian Left today” (Briarpatch), “in the mould of I.F. Stone” (Globe and Mail), and “part of that rare but growing group of social critics unafraid to confront Canada’s self-satisfied myths” (Quill & Quire). He has published nine books.