Isra-Mart srl:Trade talks could wreck climate change measures, campaigners warn

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Trade talks between Europe and Canada could leave the door open to companies suing states for losses incurred by efforts to fight climate change, campaigners claimed today.

The warning, backed by an MEP and a law expert, came as 10 protesters unsuccessfully attempted to talk to the Canadian energy minister, Ron Liepert, this morning during a visit to London for a meeting with Lord Howell, the UK minister for the Commonwealth.

Liepert is visiting the UK and Belgium to promote tar sands in the Canadian province of Alberta as a "leading source of secure energy". The protesters tried unsuccessfully to gain access to the Canadian high commission on Grosvenor Square.

Concern is focused on the Comprehensive Economic Trade Agreement (Ceta), a trade deal which Canada and the EU have been negotiating for the last two years and which they hope to finally sign in 2012. Campaigners say Ceta could affect governments' rights to regulate themselves and could also open the door for tar sands oil to be imported into Europe.

The agreement, which is in draft form, includes a clause allowing corporations to sue states for compensation if they feel their earnings have been unfairly compromised. Campaigners fear the agreement would give investors leverage against proposed changes to the EU fuel quality directive, which MEPs are reviewing to decide if it should discriminate against carbon-intensive fuel, such as tar sands oil.

"The proposed trade agreement between Canada and the EU will have a substantial impact on efforts to address the local, regional and global impacts of oil sands developments," was the conclusion drawn by lawyer Steven Shrybman, who studied the draft agreement on behalf of tar sands campaigners in Canada.

"If Ceta fails to significantly improve on the norms for such trade agreements, it will only add to the serious impediments that now exist under Nafta [North American Free Trade Agreement] and WTO [World Trade Organisation] agreements to establishing effective measures to combat climate change."

The clause, known as an investor-state dispute settlement mechanism, is increasingly common in the proliferating bilateral trade agreements around the world that have followed the collapse of the WTO's Doha round. Examples include:

• Tobacco company Philip Morris forced Uruguay to back down on tobacco legislation last year.

• In 2008, Dow Chemicals took legal action against the Canadian state of Quebec after a ban on "cosmetic" lawn pesticides.

• In a landmark case last year, which some observers fear may have granted private companies unprecedented water rights, the Canadian government settled a case brought by paper giants AbitibiBowater for $130m.

A spokeswoman for the UK Tar Sands Network, which organised today's protest, said: "Liepert is using the fact that the EU and Canada are currently negotiating to argue that any attempts to discriminate against tar sands oil due to its high carbon intensity is an unfair trade barrier.

"Tar sands oil is significantly more carbon-intensive than conventional fuels. Boosting the tar sands industry will directly contribute to increasing climate change and Europe has every right to ban imports of tar sands on these grounds."

Liberal Democrat MEP Catherine Bearder said: "There is a real concern that, if the final agreement includes an investor-to-state dispute mechanism, it could be used by corporations to prevent government actions to limit the tar sands and possibly even to stop government policy limiting the enormous use of water by the corporations in the tar sands."

However, Professor Lorand Bartels at Cambridge University's law faculty, who has seen the draft agreement, points out that it does include environmental exceptions which mean the "Canadians and the EU would retain the right to regulate for public policy reasons".

He believes anxieties about the agreement may be overblown, but agrees there are grounds for wider concern over the rapidly multiplying number of investor-state disputes as 57 per cent of these cases have happened in the last five years.