KM: Use NAFTA Chap. 11 to sue Canada????

[Oscar]

Could Texas-based Kinder Morgan use NAFTA to sue Canada over the Trans Mountain pipeline?

[ https://canadians.org/blog/could-texas- ... n-pipeline ]

April 18, 2018 - 7:56 pm

(PHOTO: The Council of Canadians marching against the proposed Kinder Morgan pipeline in Burnaby, August 2011.)

Is Texas-based Kinder Morgan preparing to launch a NAFTA Chapter 11 challenge against Canada over the Trans Mountain pipeline?

Financial Post columnist Terence Corcoran has commented, "If the pipeline expansion does not proceed, Canada sets itself up for a potential multi-billion-dollar NAFTA dispute with Kinder Morgan, the Texas energy giant that has already invested $1 billion in the project. It also raised $1.3 billion in a Canadian share offering last year. If Ottawa cannot force the pipeline through, Kinder Morgan would appear to have a case under NAFTA’s Chapter 11, which guarantees fair and equitable treatment — and protection — to foreign investors such as Kinder Morgan."

Corcoran adds, "Ian Anderson, head of Kinder Morgan’s Canadian subsidiary, has been laying some of the ground for a possible legal position for some time."

CBC has also noted, "Investors are already asking whether the company will take such action, and some legal experts say it has a legitimate case against Canada because of how the B.C. government and some municipalities have tried to oppose the project. If the company seeks damages, it would likely use NAFTA..."

That report highlights, "James Coleman, an energy law professor at Southern Methodist University, [says] Kinder Morgan would have a legitimate NAFTA claim. Even if the company believes a province or municipality is the problem, under NAFTA, the claim would target the federal government."

Seth Klein recently wrote in The Tyee, "Kinder Morgan’s focus on the B.C. government may also have an economic angle. If the corporation is indeed ready to walk, it may be hoping to launch a NAFTA Chapter 11 challenge to recoup its losses."

Klein adds, "If Kinder Morgan does invoke Chapter 11, the matter doesn’t go to open court, but to a secret trade tribunal where the company would argue that the B.C. government is unfairly harassing the project."

And Andrew Nikiforuk has written in DeSmog Canada that, "Economist Robyn Allan has repeatedly argued that Kinder Morgan is no ordinary company and the Trans Mountain expansion project has been uneconomic since day one. ...Allan says investors recognized a year ago that the Trans Mountain project didn’t make commercial sense. ...Kinder Morgan Canada has arranged $5.5 billion in construction facility loans from Canadian banks — but only if Kinder Morgan raises $2 billion in equity for the project." Hence the speculation that the Canada-Alberta bailout for the transnational now being negotiated by Finance Minister Bill Morneau would be about $2 billion.

This afternoon, Kinder Morgan CEO Steven Kean stated, "It has become clear this particular investment may be untenable for a private party to undertake. The events of the last 10 days have confirmed those views."

With Kinder Morgan's deadline of May 31 rapidly approaching, it's worthwhile remembering the NAFTA challenge launched by TransCanada.

In January 2016, Calgary-based TransCanada Corp. launched a US$15 billion Chapter 11 challenge against the United States over then-US President Barack Obama's rejection of its proposed 830,000 barrel per day Keystone XL tar sands pipeline claiming his decision to deny a presidential permit for the pipeline was arbitrary and unjustified. While the company had reportedly spent $2.4 billion on the pipeline, Chapter 11 allowed the company to sue for lost future profits as well. The challenge was dropped after US President Donald Trump approved the pipeline.

While the 890,000 barrel per day Trans Mountain pipeline would be a climate crime and a gross violation of Indigenous rights, and a $2 billion public subsidy to Kinder Morgan would be an outrage, a $15 billion government payout to the transnational would be a shakedown of epic proportions.

To sign our online petition calling on Prime Minister Justin Trudeau to drop the Chapter 11 provision from NAFTA, please click here: [ https://secure.canadians.org/page/19311/petition/1 ]


Brent Patterson's blog
Political Director of the Council of Canadians
[ https://canadians.org/blogs/brent-patterson ]