April 06, 2009

NAFTA Investors Beware

Especially health care in Canada


By Melvin J. Howad


The Government of Canada and I have an agreed on a proposal for moving forward to arbitration. But not after I had made an enquiry to the World Bank, which oversees the ICSID about a potential conflict.

What is ICSID?

ICSID oversees arbitrations arising under the 1965 “Convention on the Settlement of Investment Disputes Between States and Nationals of other States” (usually referred to as the “Washington Convention”) from investment disputes between states who are parties to that convention and foreign investors investing on their territory. The Centre applies, in particular, its “Rules of Procedure for Arbitration Proceedings.”

  • ICSID is based in the World Bank's Washington DC headquarters
  • The ICSID Secretary General is the World Bank's Senior Legal Counsel Ms. Meg Kinnear 
  • The World Bank President is chairman of the ICSID Administrative Council
  • Country Governors for the World Bank sit on ICSID's Administrative Council
  • All ICSID member countries are also members of the Bank
  • The ICSID Secretariat is financed from the World Bank's budget

As of 2007, the ICSID has been signed by 155 countries, of which 143 have proceeded to ratification. An investor can bring arbitration before ICSID only if the respondent state has also separately agreed to such arbitration. Such an agreement can be contained either in the contract between the investor and the state or, and this is most often the case, in a bilateral investment treaty between the respondent state and the investor’s home state. ICSID awards cannot be set aside before national courts and have to be treated by each member state as if they were a final judgment of its courts. Awards can, however, be set aside by so-called ICSID ad hoc committees. The number of ICSID arbitrations has increased exponentially in the last few years. In July 2007, ICSID had concluded a total of 125 cases, and had 111 pending cases.

However, Canada has not ratified it yet and until ratification, recourse must be made to either the Additional Facility Rules of ICSID or the ad hoc United Nations Commission on International Trade Law (UNCITRAL) Rules which awards can, however, be set aside under these instruments. It can but so far national courts have upheld the majority of cases. Only the United States has ratified the ICSID Convention out of the NAFTA states. Meaning that until Canada’s ultimate ratification, NAFTA Chapter 11 arbitration under the ICSID Convention remains unavailable to both Canadian investors in the United States and American investors in Canada.

I have a number of issues with Canada in these proceedings not withstanding the obvious one. In the letter from Government of Canada, which I received today the lawyer acting on behalf of the Government of Canada Ms. Sylvie Tabet Deputy Director Trade Law Bureau which took the place of Ms. Kinner stated “ Second Canada rejects the implication in your letter that MS. Kinnear and the staff at ICSID would act inappropriately if an appointment request were to be made by a party in this arbitration”. This is not what I said and if I did I would not back down from it so let’s keep this real. This was my response back “As far as your interpretation that I implied that MS. Kinner and the ICSID as well as the staff there would act inappropriately in these proceedings is way off base I said no such thing. But a perception of conflict is always easier to address before then after the fact. That being said after years of getting the run around in trying to get this resolved even up until the meeting, which you were absent from. In addition to the damages involved you can forgive me of how overly diligent that I have become and will continue to be in these proceedings. I now will proceed with the selection process of the arbitrator”.

Here is another thing, which rubs me the wrong way in a letter from the Government of Canada to me dated January 22, 2009. There was a specific item addressing NAFTA Article 1118. Ms. Tabet states further, while Canada acknowledges receipt of your correspondence of December 8, 2008 declining to participate in consultations pursuant to NAFTA Article 1118, it reiterates its position that such consultations are an important an useful part of the NAFTA dispute resolution process. Accordingly, Canada again offers to meet with you, and any legal counsel you may retain in this matter, in Qttawa, at a mutually convenient time. Well guess what Ms. Tabet was a no show at the meeting. She did not have the common courtesy to show up at a meeting. She scheduled and I knew was going to be a waste of time in the first place. You know I can put up with a lot of things but not hypocrisy. Let me give you an example this is a post by a Canadian doctor name Randall F. White. He is so mad he forgot his Hippocratic oath he had to resort to my bi-polar. Yet Dr. White is card-carrying capitalist ask him what company shares he owns. Dr. White does no represent the majority of doctors and maybe he had a bad day so lets forgive him.     


 And then there is the Unions you pretty much expect this from the unions so I am not surprised. http://www.newswire.ca/en/releases/archive/September2008/18/c5796.htmlhttp://cupe.ca/privwatchsep08/Protection-of-Canada

Then you have special interest groups that have their agenda


These are only a couple of the responses from Canada believe me there is more even some more colourful but this is a family web site. So I have a general question why should America be the symbol of free markets and trade. When countries like Canada can put up certain barriers to trade. Canadian health care and surgical companies can set up shop in the US with ease. But let an American come to Canada and say I want to build the largest surgical center in Canada guess what happens. We are not even debating health care systems were just talking about facilities. Let’s turn this around if the US put up barriers to entry they would be called to the WTO in a heartbeat. I am calling on my Government to address this issue. Canada cried protectionism earlier this year well what do you call this?