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Clean Transport

Published on July 7th, 2016 | by James Ayre


TransCanada Sues United States For $15 Billion For Rejecting Keystone XL Pipeline

July 7th, 2016 by  

Originally published on Planetsave.

The foreign oil firm TransCanada has filed a lawsuit against the US government under NAFTA rules, seeking $15 billion in compensation for the rejection of the Keystone XL pipeline project.

To put that in plain language, a foreign corporation is suing the US government for $15 billion (in tax money) because the US government has acted in the best interest of the US and its citizens, rather than in the interests of the foreign corporation. The North American Free Trade Agreement (NAFTA) specifically allows for such suits (meant to protect “foreign investors”) to be arbitrated in private tribunals consisting of only 3 lawyers — who aren’t held accountable to any domestic legal systems. In other words, people who aren’t held accountable to US law.

Hundreds Arrested (Including Me) in DC: The Protest Against the Keystone XL Pipeline and Why the Uproar

The suit (filed on June 24) alleges that the US rejection of the Keystone XL pipeline violated NAFTA’s broad rights for foreign investors by thwarting the company’s “expectations.”

TransCanada argued in its filing that the US spent 7 years delaying a final decision on the project with repetitive as well as “arbitrary and contrived” analyses. The filing continued: “None of that technical analysis or legal wrangling was material to the administration’s final decision. Instead, the rejection was symbolic and based merely on the desire to make the US appear strong on climate change, even though the State Department had itself concluded that denial would have no significant impact on the environment.”

The lawsuit, and the opaque arbitration process accompanying it, serves as a prime example of why some are so wary of further trade deals along the lines of NAFTA, such as the proposed Trans-Pacific Partnership. The proposed TPP deal allows for similar such private arbitration processes for corporations.

As Bloomberg notes in its coverage, “TransCanada’s claim could reinvigorate opponents of the proposed Trans-Pacific Partnership and make it even harder for advocates of that 12-nation trade deal to get it ratified by Congress. Like NAFTA, the Trans-Pacific Partnership includes investor-state dispute settlement provisions that allow foreign companies to challenge domestic laws in front of international arbitration panels.”

That means putting more corporations in a position to challenge domestic laws which relate to environmental protections, labor protections, and pollution controls, amongst other things — all privately, out of the public eye and consciousness.

EcoWatch provides some information on the TPP (which Obama was quoted as saying that he was “confident” he’d be able to win ratification of when speaking in Germany back in April): “The TPP would empower thousands of new firms operating in the US, including major polluters, to follow in TransCanada’s footsteps and undermine our critical climate safeguards in private trade tribunals. Today, we have a prime example of how polluter-friendly trade deals threaten our efforts to tackle the climate crisis, spotlighting the need for a new model of trade model that supports rather than undermines climate action.”

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About the Author

's background is predominantly in geopolitics and history, but he has an obsessive interest in pretty much everything. After an early life spent in the Imperial Free City of Dortmund, James followed the river Ruhr to Cofbuokheim, where he attended the University of Astnide. And where he also briefly considered entering the coal mining business. He currently writes for a living, on a broad variety of subjects, ranging from science, to politics, to military history, to renewable energy. You can follow his work on Google+.

  • Larry

    The Koch Bros. want their pound of flesh, but they’ll probably have to settle for road kill

  • Wayne Williamson

    man o man trounce these guys….put them out of business and in jail for what they are doing…just say’n….

  • Wilibald Oplatek

    “nafta” translates to “diesel fuel” in Czech language

  • Epicurus

    I wonder what the American people would think of NAFTA if the title of this article was the front page headline in every newspaper in America.

    • Bob_Wallace

      They’d probably continue to think that NAFTA was responsible for the loss of a lot of US jobs. They would likely still not understand that jobs went to China, not Canada and Mexico.

      The right is not the only peddler of misinformation.

      • Epicurus

        This article has nothing to do with jobs, Bob.

        I think they would be appalled that a foreign pipeline company could hold American taxpayers liable in the amount of $15B for rejecting its pipeline proposal for environmental reasons under an agreement that’s supposed to be about trade.

        • Bob_Wallace

          Can they?

          Has this been adjudicated?

        • Waiting to be bribed

          The U.S. has used NAFTA against Mexico and Canada much more than the other way around for decades. The U.S. is more litigious.

          • Epicurus

            I don’t doubt that. Didn’t U.S. food exports under NAFTA bankrupt the Mexican family farmer (thus forcing many of them up here to try to feed their families)?

    • Waiting to be bribed

      They would think the same thing Canadians thought after the U.S. lost the right to add a 30% duty to Canadian softwood lumber then tried 4 more times, losing all five times but managing to bankrupt several Canadian companies in the process. Dirty pool.

      • Joseph Dubeau

        “Dirty pool.” Like paying 3/4 of a workers salary in order move production out the U.S. It more like SAFTA.

  • neroden

    The correct response is to repudiate the bogus and unconstutional “investor state dispute settlement provisions”. Unfortunately, Obama is bought and paid for by foreign corporations. We’ll see what happens next…

    • Bob_Wallace

      You make a very serious charge.

      Show your proof.

      • Epicurus

        Okay Bob, neroden is making an inference. Why else would a politician support the “investor state dispute settlement” procedure whose decisions are unreviewable by our courts?

        • Bob_Wallace

          If I say Epicurus is a pedofile I am not making an inference. I am making a statement of fact.

          Were I to do that and have no proof I would be guilty of libel.

          • Bob_Wallace

            “Why else would a politician support the “investor state dispute settlement” procedure whose decisions are unreviewable by our courts?”

            Possibly because it was felt that the international dispute settlement system would result in pulling up the performance more than that leaving it up to each nation to police themselves.

            The TPP covers 12 countries – the US, Japan, Malaysia, Vietnam, Singapore, Brunei, Australia, New Zealand, Canada, Mexico, Chile and Peru. Countries with better environmental standards are not going to let the countries with poorer standards ship product at a lower price due to poor environmental practices. They’ll take those countries to the created court and push for action against them.

            I don’t believe the TPP would have allowed US companies to ignore US/EPA standards. It seems to me that an agreement like this one would tend to pull performance levels to that of the “cleanest” members and not toward the “dirtiest”.

          • Epicurus

            And the very corporations which stand to profit from lower standards have the sole, unreviewable right to decide who is right and who is wrong under the trade pact?

            For example, the designees of corporations like TransCanada will decide whether TransCanada has the right to build its damn pipeline across the Ogallala aquifer and seize the land of unwilling U.S. landowners and native Americans.

            That sounds like a good idea to you?

          • Bob_Wallace

            Is it the case that the review board/court that would judge cases is made up of corporations and that a particular corporation would get to judge its own actions?

          • Waiting to be bribed

            Sorry to say, Transcanada has the right to sue under NAFTA and will pull the standards toward the “dirtiest”.

          • Joseph Dubeau

            Farmers in California should sue Transcanada for the drought.

          • Epicurus

            He’s making a not wholly unreasonable inference from known facts. You are making a baseless assertion.

          • Bob_Wallace

            Here’s what he claimed –

            ” Obama is bought and paid for by foreign corporations.”

            I asked for proof. Until proof is provided then one should assume it’s a baseless assertion.

  • Epicurus

    This is why we must all oppose these so-called free trade pacts. They aren’t about trade. They are about ceding our sovereignty and the sovereignty of all governments to for-profit corporations.

    Hopefully, Hillary has “evolved” on these free trade pacts, like she finally evolved on marriage equality.

  • eveee

    Reminds one of Exxons interpretation right of free speech as a license to lie.

    • Epicurus

      That’s what “conservatives” believe–that the First Amendment should protect lying by corporations and politicians.

      • bwollsch

        correction. Only lying Republicans should be protected. Democrats should fry.

  • Joseph Dubeau

    “The proposed TPP deal allows for similar such private arbitration processes for corporations.” I don’t know why CleanTech has been covering TPP.
    This affects everyone.

    • Are Hansen

      Because it means that foreign corporations could demand huge repayments for “lost future profit” if the country decides to expand its environmental regulations. Which would affect clean power and EVs negatively

      • I think he meant “hasn’t been covering” … since he then wrote “This affects everyone.”

        Simple typo (i think).

  • Matt

    And the new trade deal TPP go even past this. The corp state ruling over countries has started. What the US should do today is. Add a $1/barrel import tariff on all imported oil, and a $10/barrel on all imported tar sands. Maybe also pass a special tax rule, the kind lobbies love. Any company with over $10k ownership or any partnerships with transcanada pays an extra 2% tax on gross revenue each year. Tax break for single companies get added all the time, this would just be like that.

    • Epicurus

      Great link. Thanks.

    • Waiting to be bribed

      The U.S. does not import tar sands. It imports dilbit, or diluted bitumen.

  • Ivor O’Connor

    So much secrecy behind NAFTA and TTPA you have to just say “NO” to it out of principle.


    • Mike333

      NAFTA and TTP are Corp Control of Government.
      The .1%, if they fail, want a Tax Payer Bailout.
      This is the new “conservative” party, they stand for nothing.

      • Joseph Dubeau

        yeap! Oligarchy

      • Ivor O’Connor

        That’s the *PERFECT* description.

  • who owns transcanada? This is BS. We should sue them.

    • Bob_Wallace

      Build a wall!

      Make Canada pay for it!!

      (And send Ted Cruz back. Damn Canada for shipping us damaged goods.)

      • Mike

        All kidding aside, Canada has had long legal issues bubbling away in the background with NAFTA and softwood lumber, beef and bottled water for years.

        Don’t know why oil interests in Canada suddenly get front page coverage for exercising the same legal avenues. ….no wait. It’s precisely because these are oil industry claims that they make front page news. Duh, sorry, my bad.

        Back to watering the garden…..

        • Mike333

          Because they KNOW Republicans in congress will back their claim. Repubs are the corp whore party. In an election year, they think Corp Overriding US Law is a sellable issue.

      • Karl the brewer

        Cue the greatest song ever written….


  • sjc_1

    TransCanada should not be lobbying Congress nor using our Eminent Domain laws…counter sue.

    • Epicurus

      Foreign business interests have more influence over our politicians than we do.

      • Bob_Wallace

        I’d like for you to backup your opinion with facts but I’m pretty sure you won’t.

        Parroting talking points you’ve heard somewhere is easy.

        • Epicurus

          One example: “Sleeping with the Devil: How Washington Sold Our Soul for Saudi Crude” by former CIA officer Robert Baer.

    • Waiting to be bribed

      You can’t. Check NAFTA.

  • Harry Johnson

    The Canadian Federal Court of Appeal just overturned the approval of the Northern Gateway pipeline project as an alternative to Keystone. Will TransCanada be suing the Canadian Court next?

    • Just give the execs their $50 million each (or whatever the going rate is) and shut TransCanada down 😛

    • Epicurus

      Every barrel of tar sands crude loses money at current prices. What do they need a pipeline for?

  • Are Hansen

    And now they want us in Europe to be dragged into the same position. With some of the consequences being that we would have to accept the genetically modified foods the americans must eat. And work under the same awful conditions and wages

    • eveee

      Corporations want a universal lowest common denominator. Their version of fairness is that every worker in every nation gets the worst treatment available anywhere on the globe. Forget minimum wage and working condition standards. Without national governments,there is nothing to stop unbridled capitalism from doing what it does best, Turning us all into wage slaves.

      • Epicurus

        And the lowest environmental standards so corporations can poison our air and water as they please.

    • Epicurus

      Right. Fight back Europe! Don’t let the U.S. drag down your standards.

      • Bob_Wallace

        I can’t take you, Ivor and a couple others seriously any longer. This is, IMHO, tinfoil hat Tea Party type crazy.

        I’m going to let Zach deal with this page.


        • Epicurus

          The last sentence was a joke, Bob. Lighten up.

          Do I think Europe is likely to have higher standards for food, etc.? Yes.

  • globi

    What’s Canada gonna do about it, if the US won’t pay? Invade it and burn the Whitehouse like 1812?

    • Epicurus

      The NAFTA tribunal can probably punish us somehow. It’s somewhere in the 2000 pages.

    • Waiting to be bribed

      Canada has nothing to do with this. Transcanada Pipeline is a private corporation. Four of the 12 board members are Americans. Many U.S. corporations have for decades used NAFTA to beat down smaller Canadian companies (check out softwood lumber).

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