A whole lot of ‘I told you so’ will be going around in light of a $250 million damage suit aimed at Quebec because of the way that province is handling an environmental concern. Various organizations are saying it spells trouble for other jurisdictions under the proliferation of free trade deals, such as with the European Union and Pacific Rim countries.
The company Lone Pine Resources Inc., which had undergone some expense in its bid to extract natural gas from under the St. Lawrence River, is suing over Quebec’s moratorium on fracking.
The Council of Canadians, the Sierra Club and Quebec-based Eau secours have said the legal action is proof that Canada is flirting with dangerous repercussions in going after free trade agreements around the world.
Such criticisms have been raised many times in the past couple of decades. The myriad of concerns has included, in effect, supporting poor labour standards in the countries of trade partners.
But these latest objections focus on the potential to compromise the environment on home soil and also the danger of bargaining away certain resources. The Sierra Club, before this case, has argued that under such agreements Canada could find itself with its vast fresh water supply listed among saleable commodities – while also giving up the means to protect it from corporations.
In other words, the question taps into issues of sovereignty over domestic resources and the means of environmental protection. Investor protection is a routine component of such trade agreements.
In the case of Lone Pine, and its problem with Quebec, the company claims it spent millions on the project before the moratorium.
The action raises the question of what else a corporation could sue for if it finds policies of a government restrictive to its interests.
There are all sorts of implications. For example, will governments be timid about implementing environmental protection policies when they constantly fear being sued?