Canada: A Wake-Up Call: It´s Time To Protect Investment

Last Updated: July 10 2008
Article by Barry Leon

Previously published in The Institute for Transnational Arbitration's News & Notes, Volume 22, Number 2, Spring 2008.

Key investment-protection features in the 3,000 investment treaties that bind much of the world are under attack, and no one seems to be taking the necessary steps to protect these important features.

This assault ought to be a worrying development for those who believe in the value of the global system of investment protection.

There is a real risk that opponents of investment protection are managing to define the issues to fit their political agenda, choose "hot button" language that will characterize the issues in the mind of the public, and demonize important aspects of the investment-protection system. They seem to be winning over important constituencies in various parts of the world and gaining a momentum that soon could become unstoppable.

Who is speaking out to the media, writing op-ed pieces, explaining to the public everywhere – in an understandable and personally meaningful way – why the investment-protection system fundamentally advances people's long-term economic welfare and why it is fair and efficient? Who is getting them to appreciate and believe that treaty protections are designed to – and do – encourage international investment, and in turn host-country prosperity, by protecting foreign-owned companies from discrimination, arbitrary nationalization and other unfair treatment at the hands of host governments? Who is explaining and persuading why it's a system worth preserving, improving and protecting?

There needs to be a well-considered, effective communication plan – sooner rather than later. Compelling reasoned arguments among the converted will not suffice.

The issue was highlighted by the Financial Times recently, which referred to the "noisy battering" of the North American Free Trade Agreement (NAFTA) by both Democratic presidential candidates – in particular Senator Hillary Clinton, who said, "We're going to take out the ability of foreign companies to sue us because of what we do to protect our workers."1

Opposition to investment-protection provisions is growing among emerging-market governments, with support from a wide range of powerful and sophisticated NGO campaigners who assert in colorful and pointed language that, first, investment protection undermines democracy and human rights, and, second, the arbitral tribunals that determine claims violate national sovereignty, operate ad hoc and in secret, and function without due process, permanent judges, consistency, appeal rights or transparency.

With strong rhetoric coming not just from emerging-market governments but from several quarters in the United States – especially when high-profile claims are brought against the country under the NAFTA or bi-lateral investment treaties – we can envision the convergence of strange bedfellows (forces of opposition from divergent countries) turning the hearts of people in many countries against investment protection as we know it.

The case for investor protection is not being made. Supporters of investment protection tend to talk among themselves. They articulate the benefits of investors being able to claim against states. They analyze the actual modest awards in successful claims that may have been headline grabbers when they were launched due to the amounts claimed or the nature of the government action challenged. They consider the many claims in which defendant governments have prevailed. They discuss whether changes should be made to the system, what those changes might be, and the pros and cons of the potential changes.

But they shy away from the growing debate in public arenas. They are disinclined to be drawn into using their political currency on the issue. Be it at their peril. The battle could go by default to the political opponents of the existing system unless those who believe in it stand up as a political and media-savvy force to protect it.

Investment protection needs to seen as the political issue that the opposition forces have made it. And the investment community needs to quickly learn how to succeed in this contest; otherwise investor protection rights may be lost. The existing system may not be perfect and improvements may be possible, but it is not, nor should it be, a static system. It is a credible, independent system with reasonably well-defined parameters and processes. Investors and states can make reasonably informed decisions in the middle ground, even if claims periodically push the envelope or states inadvertently take action without anticipating their potential exposure.

It is time for those who care about investment protection and its benefits to get out in front, to work to influence the shape and scope of the issues and to weigh in on those issues. These supporters need to find ways to come together, marshal adequate resources, take professional communications advice, and develop and implement an effective communications strategy that will incorporate compelling messages about the benefits of investment protection – and will resonate with the publics of developed and developing countries. The messages must be not only credible and intellectual but also understandable and emotionally compelling. They must recognize and address the themes and rhetoric of the opponents of investment protection, which are proving attractive to too many people in too many places.

Time may not be kind to those who are underestimating or misreading the forces lining up against investment protection. Keeping a low profile and appealing to sympathetic constituencies with reasoned arguments alone seem unlikely to prove sufficient to succeed against the rising tide of opposition to investment protection.

Barry Leon practices international and domestic arbitration in the Toronto office of Torys LLP.


1. Alan Beattie, "Concern Grows over Global Trade Regulation," March 12, 2008.

The content of this article is intended to provide a general guide to the subject matter. Specialist advice should be sought about your specific circumstances.

To print this article, all you need is to be registered on

Click to Login as an existing user or Register so you can print this article.

In association with
Up-coming Events Search
Font Size:
Mondaq on Twitter
Register for Access and our Free Biweekly Alert for
This service is completely free. Access 250,000 archived articles from 100+ countries and get a personalised email twice a week covering developments (and yes, our lawyers like to think you’ve read our Disclaimer).
Email Address
Company Name
Confirm Password
Mondaq Topics -- Select your Interests
 Law Performance
 Law Practice
 Media & IT
 Real Estate
 Wealth Mgt
Asia Pacific
European Union
Latin America
Middle East
United States
Worldwide Updates
Check to state you have read and
agree to our Terms and Conditions

Terms & Conditions and Privacy Statement (the Website) is owned and managed by Mondaq Ltd and as a user you are granted a non-exclusive, revocable license to access the Website under its terms and conditions of use. Your use of the Website constitutes your agreement to the following terms and conditions of use. Mondaq Ltd may terminate your use of the Website if you are in breach of these terms and conditions or if Mondaq Ltd decides to terminate your license of use for whatever reason.

Use of

You may use the Website but are required to register as a user if you wish to read the full text of the content and articles available (the Content). You may not modify, publish, transmit, transfer or sell, reproduce, create derivative works from, distribute, perform, link, display, or in any way exploit any of the Content, in whole or in part, except as expressly permitted in these terms & conditions or with the prior written consent of Mondaq Ltd. You may not use electronic or other means to extract details or information about’s content, users or contributors in order to offer them any services or products which compete directly or indirectly with Mondaq Ltd’s services and products.


Mondaq Ltd and/or its respective suppliers make no representations about the suitability of the information contained in the documents and related graphics published on this server for any purpose. All such documents and related graphics are provided "as is" without warranty of any kind. Mondaq Ltd and/or its respective suppliers hereby disclaim all warranties and conditions with regard to this information, including all implied warranties and conditions of merchantability, fitness for a particular purpose, title and non-infringement. In no event shall Mondaq Ltd and/or its respective suppliers be liable for any special, indirect or consequential damages or any damages whatsoever resulting from loss of use, data or profits, whether in an action of contract, negligence or other tortious action, arising out of or in connection with the use or performance of information available from this server.

The documents and related graphics published on this server could include technical inaccuracies or typographical errors. Changes are periodically added to the information herein. Mondaq Ltd and/or its respective suppliers may make improvements and/or changes in the product(s) and/or the program(s) described herein at any time.


Mondaq Ltd requires you to register and provide information that personally identifies you, including what sort of information you are interested in, for three primary purposes:

  • To allow you to personalize the Mondaq websites you are visiting.
  • To enable features such as password reminder, newsletter alerts, email a colleague, and linking from Mondaq (and its affiliate sites) to your website.
  • To produce demographic feedback for our information providers who provide information free for your use.

Mondaq (and its affiliate sites) do not sell or provide your details to third parties other than information providers. The reason we provide our information providers with this information is so that they can measure the response their articles are receiving and provide you with information about their products and services.

If you do not want us to provide your name and email address you may opt out by clicking here .

If you do not wish to receive any future announcements of products and services offered by Mondaq by clicking here .

Information Collection and Use

We require site users to register with Mondaq (and its affiliate sites) to view the free information on the site. We also collect information from our users at several different points on the websites: this is so that we can customise the sites according to individual usage, provide 'session-aware' functionality, and ensure that content is acquired and developed appropriately. This gives us an overall picture of our user profiles, which in turn shows to our Editorial Contributors the type of person they are reaching by posting articles on Mondaq (and its affiliate sites) – meaning more free content for registered users.

We are only able to provide the material on the Mondaq (and its affiliate sites) site free to site visitors because we can pass on information about the pages that users are viewing and the personal information users provide to us (e.g. email addresses) to reputable contributing firms such as law firms who author those pages. We do not sell or rent information to anyone else other than the authors of those pages, who may change from time to time. Should you wish us not to disclose your details to any of these parties, please tick the box above or tick the box marked "Opt out of Registration Information Disclosure" on the Your Profile page. We and our author organisations may only contact you via email or other means if you allow us to do so. Users can opt out of contact when they register on the site, or send an email to with “no disclosure” in the subject heading

Mondaq News Alerts

In order to receive Mondaq News Alerts, users have to complete a separate registration form. This is a personalised service where users choose regions and topics of interest and we send it only to those users who have requested it. Users can stop receiving these Alerts by going to the Mondaq News Alerts page and deselecting all interest areas. In the same way users can amend their personal preferences to add or remove subject areas.


A cookie is a small text file written to a user’s hard drive that contains an identifying user number. The cookies do not contain any personal information about users. We use the cookie so users do not have to log in every time they use the service and the cookie will automatically expire if you do not visit the Mondaq website (or its affiliate sites) for 12 months. We also use the cookie to personalise a user's experience of the site (for example to show information specific to a user's region). As the Mondaq sites are fully personalised and cookies are essential to its core technology the site will function unpredictably with browsers that do not support cookies - or where cookies are disabled (in these circumstances we advise you to attempt to locate the information you require elsewhere on the web). However if you are concerned about the presence of a Mondaq cookie on your machine you can also choose to expire the cookie immediately (remove it) by selecting the 'Log Off' menu option as the last thing you do when you use the site.

Some of our business partners may use cookies on our site (for example, advertisers). However, we have no access to or control over these cookies and we are not aware of any at present that do so.

Log Files

We use IP addresses to analyse trends, administer the site, track movement, and gather broad demographic information for aggregate use. IP addresses are not linked to personally identifiable information.


This web site contains links to other sites. Please be aware that Mondaq (or its affiliate sites) are not responsible for the privacy practices of such other sites. We encourage our users to be aware when they leave our site and to read the privacy statements of these third party sites. This privacy statement applies solely to information collected by this Web site.

Surveys & Contests

From time-to-time our site requests information from users via surveys or contests. Participation in these surveys or contests is completely voluntary and the user therefore has a choice whether or not to disclose any information requested. Information requested may include contact information (such as name and delivery address), and demographic information (such as postcode, age level). Contact information will be used to notify the winners and award prizes. Survey information will be used for purposes of monitoring or improving the functionality of the site.


If a user elects to use our referral service for informing a friend about our site, we ask them for the friend’s name and email address. Mondaq stores this information and may contact the friend to invite them to register with Mondaq, but they will not be contacted more than once. The friend may contact Mondaq to request the removal of this information from our database.


This website takes every reasonable precaution to protect our users’ information. When users submit sensitive information via the website, your information is protected using firewalls and other security technology. If you have any questions about the security at our website, you can send an email to

Correcting/Updating Personal Information

If a user’s personally identifiable information changes (such as postcode), or if a user no longer desires our service, we will endeavour to provide a way to correct, update or remove that user’s personal data provided to us. This can usually be done at the “Your Profile” page or by sending an email to

Notification of Changes

If we decide to change our Terms & Conditions or Privacy Policy, we will post those changes on our site so our users are always aware of what information we collect, how we use it, and under what circumstances, if any, we disclose it. If at any point we decide to use personally identifiable information in a manner different from that stated at the time it was collected, we will notify users by way of an email. Users will have a choice as to whether or not we use their information in this different manner. We will use information in accordance with the privacy policy under which the information was collected.

How to contact Mondaq

You can contact us with comments or queries at

If for some reason you believe Mondaq Ltd. has not adhered to these principles, please notify us by e-mail at and we will use commercially reasonable efforts to determine and correct the problem promptly.