Foreign Investment Promotion and Protection Agreements
Since 2008 Canada has signed over a dozen Foreign Investment Promotion and Protection Agreements (FIPAs) with African and Latin American countries. FIPA treaties include an Investor State Dispute Settlement mechanism that gives corporations the right to sue governments — in private, investor-friendly tribunals — for pursuing policies that interfere with their profit making. As such, they undermine governments’ ability to democratically determine economic policy.
FIPAs are primarily about protecting Canadian mining firms from popular discontent. After two decades of privatization and loosened restrictions on foreign investment, mining companies operating in Africa and Latin America fear a reversal of these policies. The ability to sue a government in an international tribunal for lost profits partially alleviates those fears.
In another sign of how they undercut democracy, FIPAs are generally locked in for 16 years. So a government that signs an investment accord with Ottawa constrains future governments’ ability to shift direction.
In the most egregious example of a FIPA undermining electoral democracy, Ottawa signed a FIPA with the transition administration that took over after President Blaise Compaoré’s 27-year reign was ended. Burkina Faso was represented at the April 2015 FIPA signing ceremony in Ottawa by Prime Minister Yacouba Isaac Zida, who was deputy commander of the presidential guard when Compaoré was ousted by popular protest six months earlier. While the West African nation’s caretaker government was supposed to move aside after an election planned for later that year, the FIPA cannot be fully repealed for 16 years.