PARLIAMENT HILL—Doing business in China can be a cutthroat affair where the promise of profit comes hand in hand with potential for unmitigated disaster.
It is into this fray that Canadian businesses enter, risking much with little protection. Such is the pressure on the Canadian government to offer something, anything, to give Canadian investors in China some kind of legal recourse.
But the Canada-China Foreign Investment Protection Agreement (FIPA) isn’t so much about protecting what investments Canadians make in China as it is about helping them get as much of it back as possible on their way out of the country.
Todd Weiler, a noted expert on treaty law arbitration, represents investors who use FIPAs and “investor state provisions” in countries like Laos, Egypt, and the Czech Republic.
He rejects much of the criticism directed against the agreement, and knows through experience how it will likely play out in practice.
By the time someone comes to Weiler for help, they have either lost their investment or are about to, whether it be a business, a stake in a joint venture, or some other enterprise.
Filing a FIPA tribunal case is going through a door that only leads out of whichever country the investment was in, he said.
“You aren’t coming back into the country.”
Retaliation Threat
FIPAs are usually the last resort of small- or medium-sized businesses that don’t have the pull that would make officials in either Beijing or Ottawa care to intervene.
“The huge big companies normally, unless things really come to push and shove, they settle their problems and don’t actually ever have to use these remedies,” Weiler said.
“Oftentimes they use their power and connections—and not necessarily in an illegal way, but certainly in a successful way—to resolve their problems. It is just commons sense.”
