THE LEGAL CHALLENGE AGAINST
THE MULTILATERAL AGREEMENT ON INVESTMENT (MAI)
CITIZENS TAKE THE CANADIAN GOVERNMENT TO COURT
Professor of Economics, University of Ottawa, Canada,
This text can be forward and/or posted.
An important citizens' initiative is underway in Canada which challenges
the legitimacy of the Canadian government to negotiate the Multilateral
Agreement on Investment (MAI).
The initiative questions the authority of the federal government to
negotiate an international treaty which derogates fundamental rights as
contained in Canada's Constitution.
The Defence of Canadian Liberty Committee (DCLC) based in Vancouver, BC
has taken the federal government to court. The judicial application was
launched in April 1998. The Defence of Canadian Liberty Committee has
commenced proceedings in the Federal Court of Canada, (trial division),
No. T-790-98. Initiating documents were filed and served on April
According to the DCLC: "The MAI is unconstitutional under Canadian law
because it gives entrenched rights to international banks and foreign
corporations guaranteed by international law which Canadian citizens do
not have...This is contrary to the principle of equality before the law
which is part of the Canadian constitution enshrined in the Charter of
Rights and Freedoms",
The Applicants challenge the jurisdiction of the federal government to
sign a treaty, in the form of a Multilateral Agreement on Investment, on
behalf of Canada which "would be outside of the power granted by and
ultra vires of the Constitution Acts of 1867 and 1982 and that,
generally, such a treaty would not be in the best interests of Canadian
The legal challenge constitutes more than an embarrassment to the
government's negotiating team headed by Trade Minister Serge Marchi, it
underscores the blatant violation of democratic procedures; it questions
the honesty of elected politicians and bureaucrats involved in behind
the scenes negotiations including consultations with international
"The government of Canada has no authority to sign a treaty without a
mandate from Parliament. To do so is a violation of the fundamental
principles of democracy and representative government. Exercise of
prerogative power must be subject to the Constitution".
Three top lawyers well versed in constitutional and human rights issues
are acting on behalf of the DCLC. Government witnesses have been
interrogated, the submission of confidential government documents have
been demanded by the Applicants' lawyers. At the hearings in Vancouver,
the federal government witness provided many new documents, most of
which were heavily censored with large portions blacked out.
The government is now attempting through various means to stall the
legal challenge and prevent it from going to the trial stage. Already
the government has been calling for adjournments,...
Assigned to the court case in the January 1998 hearings in Vancouver was
Judge Dube, a former Cabinet Minister and personal friend of Prime
Minister Jean Chretien who is a Defendant in the Proceedings. Judge Dube
has refused to step down. The Applicants lawyers (pointing to a blatant
conflict of interest) have demanded that Judge Dube he replaced by a
more qualified individual.
The proceedings are to continue. The Applicants lawyers have demanded
the federal government to produce documents and answer questions they
have refused to answer on the grounds of "Cabinet Privilege".
The Struggle against Neoliberalism
This initiative is of crucial importance because it indicates an avenue
of struggle against neoliberalism; the legal challenge constitutes a
powerful instrument; it is not based on empty "dialogue" with the
government: it questions at the outset the legitimacy of politicians and
bureaucrats to undertake (behind closed doors) negotiations (on behalf
of national societies) which impoverish millions of people and derogate
fundamental human, cultural and economic rights.
The legal challenge complements other anti-MAI initiatives. It also
serves to reinforce the ability of the anti-MAI movement to pressure
national governments and the relevant inter-governmental organisations.
"Internationalising" the Legal Challenge
The legal challenge in Canada is an important landmark: it identifies a
framework for the launching of similar legal challenges in other
countries not only against the MAI but also in relation to other
international treaties which were negotiated and/or signed without
Legislative assent and/or in contradiction with entrenched
The "internationalisation" of this type of legal challenge against "the
MAI and its clones" (ie. legal actions launched simultaneously in
several countries) is part of the Worldwide movement against
neoliberalism. Important lessons can be drawn from the Canadian court
challenge against the MAI, particularly in countries which have a
similar legal framework to that of Canada.
"MAI Clones": Challenging the Amendment of the IMF Articles
We will recall that the IMF's resolve to deregulate capital movements
was taken behind closed doors (conveniently removed from the public eye
and with very little press coverage) barely two weeks before citizens'
groups from around the World gathered in late April 1998 in Paris in
opposition to the MAI.
The Amendment of the IMF Articles seeks to derogate the powers of
national societies not only to regulate foreign investment but to
control the deadly movement of speculative capital. In other words, the
deregulation of capital movements is to be achieved through a more
"expedient" avenue, --ie. without the legal hassle of a global
investment treaty entrenched in international law.
In this context, it is important to envisage legal challenges which
question the authority of the IMF (through its Interim Committee) to
casually proceed (in behind the scenes negotiations) with the Amendment
of its articles through a bureaucratic process. Fundamental rights of
member countries are affected but the only people who are consulted are
bankers, Washington officials and corporate executives.
Challenging the Legitimacy of Financial Rules and Mechanisms
Similarly, in the context of the global financial crisis, (eg. the
brutal onslaught of currency speculation in Brazil), it is also
important to challenge the legality of international rules, financial
mechanisms and other regulations governing the movement of capital,
including speculative capital. The latter are largely responsible for
the collapse of national currencies in all major regions of the World
with devastating economic and social consequences.
In this regard, many of the administrative rules governing stock
markets, currency markets and offshore banking have never been subjected
to legislative assent. In other words, many of the rules which govern
international financial transactions (including the lucrative flow of
dirty money) are also in blatant contradiction with fundamental economic
and social rights and should therefore be questioned in the courts.
Information concerning the DCLC Legal Challenge including Legal
Documents can be found at:
Department of Economics,
University of Ottawa,
Voice box: 1-613-562-5800, ext. 1415
Recent articles by Chossudovsky on the global economic crisis at:
----------------return to econowar----------------