Appeal Court shoots down Hupacasath FIPA challenge

By Shayne Morrow, January 16, 2015

Brenda Sayers pictured at the beginning of the long battle to fight FIPA in the courts.

Photo by David P. Ball

Port Alberni — 

The Federal Court of Appeal has dismissed a legal challenge by Hupacasath First Nation to the Canada-China Foreign Investment Promotion and Protection Agreement.

The court delivered its reasons for judgment on Jan. 9, in effect, upholding the August 2013 federal court decision by Justice Paul S. Crampton.

With fundraising support from Leadnow, a social justice organization, Hupacasath challenged FIPA based on Canada’s failure to consult with First Nations whose constitutionally-protected rights and title may be affected by the agreement.

The judgment concluded that the federal court was correct in ruling that the appellant had failed to establish any “causal relationship” between the effects of FIPA on Hupacasath rights and interests, and that any effects on Hupacasath were “non-appreciable” and “speculative.”

Former Hupacasath councillor Brenda Sayers has handled the FIPA challenge from the beginning. She spoke with Ha-Shilth-Sa on Jan. 15. Sayers said, after wading through the legal language, both courts focused on one oversimplified issue.

Under FIPA, foreign investors in either country would have legal recourse in the event changes to existing laws caused financial burden. Sayers noted that under a similar agreement (the North American Free Trade Agreement), a private company, Lone Pine Resources, is currently suing the Province of Quebec for losses incurred after the province imposed a moratorium on fracking.

“But because China does not have any investment in Hupacasath traditional territory, the court ruled that it would be ‘speculative’ to consider consequences of the agreement,” she said. “We had hoped the court would find that Ottawa had failed to consult with First Nations, and we had hoped there would be a requirement to incorporate aboriginal rights and title within the body of FIPA.”

Critics of the Hupacasath vs FIPA case contend that the agreement is virtually identical to agreements between Canada and other countries. In 2012, National Post columnist Andrew Coyne pointed out that key clauses within FIPA are moderated by the phrase, “in accordance with international law.”

That phrase is deceptive, Sayers said. International law fits on a different spectrum from domestic law and does not recognize laws within individual countries. Canada has enacted specific laws such as the duty to consult with First Nations on matters affecting their traditional territories.

International law, by contrast, has no consensus on the rights of indigenous peoples, and therefore provides no assurances that Canada’s aboriginal laws would be recognized or respected in the event of court action.

“But it’s not just First Nations that will be affected. It also affects municipalities, it will affect provincial governments and it will affect the federal government. It will be all levels of government.”

One only has to look at NAFTA to see the potential hazards inherent in FIPA, Sayers said. The current Lone Pine Resources vs Quebec dispute over fracking is just one instance where U.S.-based interests have launched court actions under NAFTA. Sayers said Canada has already paid out tens of millions of dollars in damages to American investors, and to date, has not won a single NAFTA claim against the U.S.

That indicates that in any FIPA court action, the larger country has the overwhelming advantage. And in the case of China, all enterprises are state-owned. Call it “speculative,” but working under the shadow of a foreign trade agreement can influence domestic legislation, Sayers said.

“It causes a chill effect on a government’s ability to make good decisions for the people, because if they do, they might be sued under the terms of NAFTA or under the terms of the Canada-China FIPA.”

While the court maintains that FIPA is essentially similar to NAFTA, there are a number of critical differences, Sayers points out.

NAFTA has a six-month escape clause. FIPA, on the other hand, has a fixed 30-year term.

The NAFTA legislative process was initiated by a Progressive Conservative prime minister, Brian Mulroney, and a Republican president, George H. W. Bush. During four years of rough-and-tumble public dialogue and political wrangling, both administrations were voted out of office, and their successors, Liberal Prime Minster Jean Chrétien and Democratic President Bill Clinton, crafted a plethora of amendments and side deals to bring the agreement to fruition.

By contrast, Sayers said, the Canada-China FIPA underwent no public dialogue or political discussion under the Harper Government.

“There was no press release to say ‘We were going to enter into this trade agreement with China and this is why it is good for the people of Canada.’ There was nothing like that. Parliament was not even allowed to vote on it.”

On Sept. 12, 2014, Prime Minister Stephen Harper ratified the agreement using his Royal Prerogative, “Even though there was a case before the courts, which was Hupacasath’s case,” Sayers added.

As part of the appeal court decision, Hupacasath is required to cover costs incurred by the Crown. Sayers said that, fortunately, the court uses a formula to calculate those costs, rather than total up all the hourly fees racked up by Crown lawyers.

All told, Hupacasath has been billed $140,000 in court costs, of which $90,000 was paid to Canada’s expert. The remaining $24,000 includes all the sundry expenses such as photocopying and courier fees, along with lawyer’s fees. Sayers noted that Canada had a legal team of five lawyers and assistants, so the cost of losing the case would have been much higher had there not been a fixed formula.

Those costs have been taken care of, she added. In partnership with Leadnow, Hupacasath raised sufficient funds to cover the anticipated cost of the court action.

Following the judgment, Hupacasath faced a great deal of second-guessing about its decision to take on Canada alone. Sayers said in hindsight, it might have been the wrong choice.

“Certainly, if we had interveners at the Court of Appeal – First Nations who have Chinese investment in their traditional territories – that would have supported our argument.”

On the other hand, the image of one small First Nation with just 300 members taking on the federal legal colossus caused many people across Canada to sit up and take notice.

“We have had thousands and tens of thousands of supporters. We have raised awareness of international trade agreements with people who previously had no interest in it.”

Along the way, the court case attracted support from unions, faith-based organizations, education groups, Non-governmental Organizations, First Nations, academics and more.

“Never before has a First Nation taken legal action against an international trade agreement,” Sayers said. “We look at it as a people’s court challenge. We feel it is one of the biggest court challenges of the day because it will impact every Canadian.”

The Hupacasath chief and council must now decide whether to proceed to the next level, the Supreme Court of Canada. That would require a new round of fundraising to cover the cost.

“Our lawyers are also examining that option, whether it is something we should pursue or not.”

The legal team is currently putting together a formal written analysis of the appeal court decision to determine if there are sufficient grounds to press forward, she explained.