Colombia deal side agreements under microscope

Embassy, August 6th, 2008

Colombia Deal Side Agreements Under Microscope

By Michelle Collins

During free trade talks with Colombia, which for decades has been the scene of war, extreme poverty and political corruption, Canadian officials repeatedly pledged that historic provisions on labour and the environment would be included.

Indeed the controversy surrounding a free trade agreement with Colombia centred largely on whether such a deal would improve, or denigrate, labour and environmental standards in the Latin American country, and how best to enforce the regulations in both Canada and Colombia.

Now, with the deal done, but the text still kept secret, many are optimistic that such provisions at least establish a record of commitment, though others say that without enforceable complaint mechanisms, the side agreements amount to little more than lip service.

In concluding negotiations for a free trade agreement with Colombia in June, the Canadian government announced the deal "contains some of the most comprehensive labour provisions to be found in any agreement anywhere in the world."

However, both the Liberals and the NDP reported there was evidence to the contrary in dissenting opinions attached to a Commons’ trade committee study of the deal, which was completed after the agreement was signed.

"The agreement itself should...ensure that deals on labour and the environment exceed the template of the North American Free Trade Agreement in order to set a higher standard for future negotiations," the Liberal opinion stated.

The NDP, opposed to moving ahead with an agreement at this time, stated in their opinion that "trade agreements must provide strong protection and enforcement mechanisms to ensure such abuses do not occur; however, evidence was brought forth by expert witnesses who confirm the weaknesses of the environmental provisions side agreements."

Peru Deal Weaker

Geoff Garver, who was the director of submissions on enforcement matters at the environmental body created by NAFTA, the North American Commissions for Environmental Co-operation, or the CEC, from 2000 until 2007, appeared before the trade committee during its study.

Mr. Garver testified that not only had governments resisted rulings from the quasi-independent CEC, it appeared the provisions in the recently signed free trade deal with Peru were even weaker than NAFTA’s, drafted 15 years earlier.

In responding to a query from Embassy, Environment Canada said the environment agreement will include "key environmental obligations and a framework to undertake environmental co-operative activities."

In practice, the agreement will allow citizens of either country "to submit a written question to either country regarding any obligation under the Agreement." The country receiving the questions will be obliged to provide an answer and make these publicly available. Citizens may also "request an investigation."

What this amounts to, however, is little more than for citizens to file a question with a bureaucrat, Mr. Garver said. This provides for little accountability because an investigation by a government of itself is not a credible mechanism. Mr. Garver said that even NAFTA and the 1996 free trade agreement with Chile provided for independent investigations by an international body.

"For a government that promised accountability, this is woefully inadequate," Mr. Garver said, suggesting a separate mechanism could oversee the provisions. "The government knows how to create truly independent and rigorous enforcement and investigatory schemes if it wants to."

Mr. Garver said that Europe, unlike North America, exercises meaningful sanctions for governments that fail to adopt the minimal level of environmental protections in order to have a level playing field. He said the countries of the Americas should be working together to take a new, 21st century approach to the worsening ecological dilemma.

"I’d just like to see more evidence that countries like Canada and its trading partners, we’re working more toward harmonized environmental rules and that everyone is living at the same environmental baseline," Mr. Garver said.

Despite some problems in enforcing the regulations, however, York University associate professor of economics Irene Henriques said the independent body created out of NAFTA has been a great asset, and that it would be helpful for a similar body to accompany the Colombian agreement. Ms. Henriques added, however, that in many Latin American countries, the idea of bringing stakeholders together in a forum is quite foreign.

As a member of the Joint Public Advisory Committee, which provides advice to environment ministers of NAFTA countries on environmental disputes, Ms. Henriques said she is encouraged that, at the very least, this mechanism ensures that a discussion of the concerns takes place.

"At least the information becomes public whether something’s done or not, and maybe it will incite them to change the system and they themselves will go back and change this," she said.

She said it is important to remember that trade agreements are first and foremost about trade and economic prosperity, and a country shouldn’t look to using another’s lack of policies on the environment for limiting bilateral co-operation on this front.

Two weeks ago, trade union leaders from Canada travelled to Colombia to meet with union leaders, politicians, human rights groups and others. National president of the Canadian Union of Public Employees (CUPE) Paul Moist said he returned to Canada with no assurances the trade agreement will improve labour rights, and was disappointed with the rhetoric coming from some politicians.

"It’s hard to be formed into a union in Colombia, and there’s been a systematic campaign of de-unionization," Mr. Moist said. "People have actually less rights than they did a decade ago, so I found it a very sobering week. I just think this needs to come out into the open, it’s not just about investment it’s about who Canada is singing agreements with, I think there’s some goings-on in Colombia that would shock most Canadians."

Don’t Big-Brother

But speaking before the Commons’ trade committee in mid-April, Pierre Bouchard, director of the office for Inter-American Labour Co-operation at Human Resources and Social Development Canada said that if successful, the labour side agreement would be "probably the most comprehensive labour agreement ever negotiated by Canada."

"We are raising the bar with regard to the core obligation in the agreement and also providing for an open and robust dispute resolution mechanism with financial penalties if obligations are not respected," Mr. Bouchard said.

In concluding the negotiations in early June, the government announced there would be a labour fund, amounting to $15 million per year, as a penalty for violations, and Canada would provide $1 million for capacity building.

This fund as a dispute resolution mechanism, however, has been criticized as being little more than a way for the Colombian government to pay when union leaders are killed.

Carlo Dade, executive director of Ottawa-based FOCAL, said the side agreements only go so far because it is not Canada’s place to big-brother other countries on their standards.

"Rather than sort of nanny, it’s more effective to work with them on their own process to develop regulations," Mr. Dade said. "I think with this government we’re taking more of the approach of trying to work with them."

He said compared to U.S. trade negotiators, for whom there is a great deal of palpable anger in the region, Canadians receive much more respect and are widely viewed as more progressive in many areas. Mr. Dade pointed to the Canadian trade agreements’ inclusion of recommending an adherence to corporate social responsibility in the latest agreements.

He said that over the years, it was learned that agreements based solely on economics were not enough, and that additional measures, such as on the environment and labour, were needed. Most importantly, Mr. Dade said, it is through increased trade with agreements that Canada will help to create jobs and bring economic prosperity to other countries.