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Canada-Israel Free Trade Agreement

CHAPTER TWELVE
TRADE AND LABOUR

Section A – Obligations

Article 12.1: General Obligations

1. Each Party shall ensure that its labour laws and practices embody and provide protection for the following internationally recognised labour principles and rights, particularly bearing in mind its commitments under the International Labour Organization (ILO) Declaration on Fundamental Principles and Rights at Work and its Follow-Up, done at Geneva on 18 June 1998 (“ILO 1998 Declaration”):

2. To establish a violation of an obligation under this Article, a Party shall demonstrate that the other Party has failed to ensure that its labour laws embody and provide protection for the internationally recognised labour principles and rights referred to in paragraph 1 in a matter related to trade or investment.

Article 12.2: Upholding Levels of Protection

A Party shall not waive or otherwise derogate from, or offer to waive or otherwise derogate from, its labour laws in a manner that weakens or reduces adherence to the internationally recognised labour principles and rights, referred to in Article 12.1.1, in order to encourage trade or to establish, acquire, expand or retain an investment in its territory.

Article 12.3: Government Enforcement Action

1. Each Party shall effectively enforce its labour laws by taking appropriate and timely government action, including:

2. Each Party retains the right to exercise reasonable enforcement discretion and to make decisions in good faith with regard to the allocation of resources, among the labour enforcement activities related to the internationally recognised labour principles and rights enumerated in Article 12.1.1. If a Party fails to comply with any obligation of this Chapter, a decision that this Party makes on the provision of enforcement resources shall not excuse this failure. 

3. To establish a violation under this Article, a Party shall demonstrate that the other Party has failed to effectively enforce its labour laws through a sustained or recurring course of action or inaction in a matter related to trade or investment, and that the matter in dispute is covered by mutually recognised labour laws.

Article 12.4: Private Action

Each Party shall ensure that a person with a recognised interest under its labour laws in a particular matter has appropriate access to administrative or tribunal proceedings which can enforce and give effect to the rights protected by those laws, including by granting effective remedies for a violation of those laws.

Article 12.5: Procedural Guarantees

1. Each Party shall ensure that the proceedings referred to in Articles 12.3.1(a), 12.3.1(b) and 12.4 are fair, equitable and transparent and to this end shall provide that:

2. Each Party shall provide that parties to the proceedings have the right, pursuant to that Party’s laws, to seek review and correction of decisions issued in those proceedings, and shall provide that this review complies with the requirements set out in paragraph 1 and is conducted by decision-makers who are impartial and independent and who do not have an interest in the outcome of the matter.

Article 12.6: Public Awareness

Each Party shall promote awareness of its labour laws, including by:

Section B – Institutional Mechanisms

Article 12.7: Labour Ministerial Council

1. The Parties hereby establish a Labour Ministerial Council composed of Ministers responsible for labour affairs of the Parties or their designees (“the Council”).

2. The Council shall meet within the first year after the date of entry into force of this Agreement and thereafter as often as it considers necessary to discuss matters of common interest, to oversee the implementation of this Chapter and to review progress under it.  The Council may hold joint meetings with other Councils established under similar Chapters or Agreements.

3. Unless the Parties decide otherwise, each meeting of the Council must include a session at which members of the Council have an opportunity to meet with the public to discuss matters relating to the implementation of this Chapter.

4. The Council may consider any matter within the scope of this Chapter and take any other action in the exercise of its functions the Parties decide, including:

5. The Council shall review the operation and effectiveness of this Chapter, including the degree to which progress has been made in implementing the objectives of this Chapter, within five years after the date of entry into force of this Agreement and thereafter within any other period directed by the Council.

Article 12.8: National Mechanisms

1. Each Party may consult members of its public, including representatives of its labour and business organisations, to provide views on any issues related to this Chapter.

2. Each Party shall designate an office within its governmental department responsible for labour affairs that shall serve as a National Point of Contact (“NPC”) and shall provide to the other Party its contact information by diplomatic note.

3. The NPC shall serve as a point of contact with the other Party and perform the functions assigned to it by the Parties or the Council, as well as:

Article 12.9: Cooperative Activities

1. The Parties may develop a joint plan of action for cooperative labour activities to promote the objectives of this Chapter.  To the extent possible, those activities must be linked to the review performed by the Council pursuant to Article 12.7.5. An indicative list of areas of possible cooperation between the Parties is set out in Annex 12.9.

2. In carrying out the joint plan of action the Parties may, commensurate with the availability of resources, cooperate through:

Article 12.10: Public Communications

1. Each Party shall provide for the submission and receipt of, and periodically make available a list of, public communications on matters regarding labour laws that:

2. Each Party shall consider communications described in paragraph 1 in accordance with its domestic procedures as provided for in Annex 12.10.

Section C – Procedures for Review of Obligations

Article 12.11: General Consultations

1. The Parties shall at all times endeavour to concur on the interpretation and application of this Chapter.

2. A Party may request consultations with the other Party regarding any matter arising under this Chapter by delivering a written request to the NPC of the other Party. The Parties shall make every attempt, including through cooperation, consultations and the exchange of information, to address the matter under consideration.

3. Consultations pursuant to this Article and Article 12.12, including documents prepared specifically for the purposes of these consultations, are confidential and without prejudice to the rights of the Parties in any proceedings.

4. If the Parties are unable to resolve the matter, the requesting Party may use the procedures provided in Article 12.12.

Article 12.12: Ministerial Consultations

1. A Party may request, in writing, consultations with the other Party at the ministerial level regarding any matter in this Chapter.  Unless the Parties decide otherwise, the Party that is the object of the request shall respond within 60 days of receiving the request.

2. To facilitate discussion of the matter under consideration and assist in arriving at a mutually satisfactory resolution, each Party:

3. Ministerial consultations shall be concluded no later than 180 days after the request is received unless the Parties decide otherwise.

Article 12.13: Establishment and Conduct of a Review Panel

1. Following the conclusion of ministerial consultations pursuant to Article 12.12, the Party that requested the consultations may make a written request to the NPC of the other Party for a Review Panel to be established if it considers that the matter has not been satisfactorily addressed through the ministerial consultations.

2. The request for the establishment of a Review Panel shall set out the nature of the alleged non-compliance with the obligations under Section A.

3. Unless otherwise decided by the Parties, a Review Panel composed of three independent natural persons, including a chairperson, shall be established in a manner consistent with the criteria and procedures set out in Annex 12.13.3. The Review Panel shall be composed of natural persons who are nationals of states having diplomatic relations with both Parties.

4. Unless the Parties decide otherwise, the Review Panel shall perform its functions in accordance with the provisions of this Section, Annex 12.13.3 and Annex 12.13.4. The Review Panel:

Article 12.14: Review Panel Reports and Determinations

1. The Review Panel shall present to the Parties a report that:

2. The Review Panel shall present its initial report to the Parties within 90 days after the date the last panellist is selected unless the Review Panel extends the time period by up to an additional 60 days.  If the Review Panel extends the time period, it shall first give written notice to both Parties setting out the reasons for the extension of time.

3. Each Party may submit written comments to the Review Panel on its initial report within 30 days of presentation of the initial report or within any other period that is determined by the Parties.  After considering the written comments, the Review Panel, on its own initiative or upon the request of either Party, may reconsider its report and make a further examination that it considers appropriate. 

4. Unless the Parties decide otherwise, the Review Panel shall present to the Parties a final report within 60 days of the presentation of the initial report. Unless the Parties decide otherwise, the final report of the Review Panel may be published by either Party 15 days after it is presented to the Parties, subject to Article 12.16.

5. If, in the final report, a Review Panel determines that there has been non-compliance within the meaning of subparagraph 1(c), the Parties may develop, within the following 90 days or a longer period they decide, a mutually satisfactory action plan to remedy the non-compliance, taking into account the Review Panel’s recommendations.

6. Following the expiry of the period set out in paragraph 5, if the Parties are unable to decide on an action plan or if the Party that is the object of the review is failing to implement the action plan according to its terms, the requesting Party may make a written request to the NPC that the Review Panel be reconvened to determine whether or not a monetary assessment needs to be set and paid in accordance with Annex 12.14.

Section D – General Provisions

Article 12.15: Private Rights

A Party shall not provide for a right of action under its law against the other Party on the ground that the other Party has acted in a manner inconsistent with this Chapter.

Article 12.16: Protection of Confidential Information

Each Party shall ensure that information designated by either Party for treatment as confidential information, in particular personal or commercial information, is protected.

Article 12.17: Cooperation with International and Regional Organisations

The Parties may establish cooperative arrangements with the International Labour Organization and other competent international and regional organisations to draw on their expertise and resources to achieve the objectives of this Chapter.

Article 12.18: Extent of Obligations

1. For Canada, the application of this Chapter to the provinces of Canada is subject to Article 1 of Annex 12.18.

2. For Israel, the application of this Chapter is subject to Article 2 of Annex 12.18.

Article 12.19: Definitions

For the purposes of this Chapter:

labour laws means laws and regulations that implement and protect the labour principles and rights set out in Article 12.1.1;

person means a natural person, an enterprise or an organisation of employers or workers;

province means a province of Canada, and includes the Yukon, the Northwest Territories and Nunavut, and their successors; and

trade-related means related to trade or investment covered by this Agreement.

ANNEX 12.9
COOPERATIVE ACTIVITIES

1. The Parties have established the following indicative list of areas for cooperative activities that they may develop pursuant to Article 12.9:

2. In identifying areas for labour cooperation and capacity building, and in carrying out cooperative activities, each Party may consider the views of its worker and employer representatives, as well as those of other members of the public.

ANNEX 12.10
PUBLIC COMMUNICATIONS PROCEDURES

Public communications procedures of each Party regarding the right of a person to submit a public communication to the National Point of Contact shall indicate, among other things:

ANNEX 12.13.3
PROCEDURES RELATED TO REVIEW PANELS

Qualifications of Panellists

1. Each panellist shall:

2. Panellists proposed to serve as chairperson shall not be nationals of either Party nor have their usual place of residence in either Party's territory.

3. Panellists appointed by each Party, unless otherwise decided by the Parties on a case by case basis, may be nationals of the appointing Party or have their usual place of residence in its territory.

Review Panel Appointment Process

4. Within 30 days of the date of receipt of the notice referred to in Article 12.13, each Party shall notify the other Party of its appointment of a panellist, and propose up to four candidates to serve as the chairperson. If a Party fails to appoint a panellist within this time, that panellist shall be appointed by the other Party from the candidates proposed for chairperson by the Party that failed to appoint a panellist, if such a list exists or, in the absence of such a list, from the other Party's proposed candidates.

5. The Parties, within 45 days of the date of receipt of the notice referred to in Article 12.13, shall endeavour to decide, from among the candidates proposed, on a panellist who will serve as the chairperson.

6. If the Parties fail to decide on a chairperson within 45 days, the Parties shall immediately request the Director General of the International Labour Office to appoint a chairperson within 25 days. If the Director General of the International Labour Office is a national of or has his or her usual place of residence in the territory of either Party, or is not a national of a state with which both Parties have diplomatic relations, or is otherwise prevented from discharging this function, the Deputy Director General of the International Labour Office shall be requested to appoint the chairperson, provided that he or she meets those requirements. If after 25 days no chairperson has been appointed the chairperson shall be appointed after selection by lot, from among the candidates proposed, in the presence of representatives of both Parties.

7. If a panellist appointed by a Party withdraws, is removed or becomes unable to serve, a replacement shall be appointed by that Party within 30 days and, in cases of urgency, within 15 days, failing which the replacement shall be appointed by the other Party from among the candidates proposed for the chair in accordance with the second sentence of paragraph 4. 

8. If the chairperson of the Review Panel withdraws, is removed or becomes unable to serve, the Parties shall endeavour to decide on the appointment of a replacement within 30 days and, in cases of urgency, within 15 days, failing which the replacement shall be appointed in accordance with paragraph 7.

9. If an appointment pursuant to paragraph 7 or 8 would require selecting from the list of candidates proposed for chairperson and there are no remaining candidates, each Party shall propose up to three additional candidates within 30 days and, within a further seven days, the chairperson shall be appointed after selection by lot, from among the candidates proposed, in the presence of representatives of both Parties.

10. Removal of a panellist shall take place only for the reasons and according to the procedures detailed in paragraphs 12 and 13.

11. Any time limit applicable to the proceeding shall be suspended as of the date a panellist or the chairperson withdraws, is removed or becomes unable to serve, and shall resume on the date a replacement is appointed.

Removal of a Panellist

12. If a Party considers that a panellist or the chairperson is not in compliance with the requirements of Annex 19.8 (Code of Conduct) and for this reason must be replaced, that Party shall immediately notify the other Party.  Upon the other Party’s receipt of this notice, the Parties shall consult and, if they so decide, shall replace the panellist or the chairperson and select a replacement using the procedure set out in paragraphs 7 or 8 and, if necessary, paragraph 9. If the Parties fail to decide on the need to replace a panellist, either Party may request that the matter be referred to the chairperson, whose decision shall be final.  The chairperson shall render a decision within 10 days of the request.  If the chairperson decides that the panellist should be replaced, a replacement shall be selected using the procedure set out in paragraph 7 and, if necessary, paragraph 9.

13. If the Parties fail to decide on the need to replace the chairperson, either Party may request that the matter be referred to the two remaining panellists, whose decision shall be final. The panellists shall render a decision within 10 days of the request. If the panellists decide that the chairperson should be replaced, or if the panellists cannot reach a decision within the 10 days of the request, a replacement shall be selected using the procedure set out in paragraph 6 and, if necessary, paragraph 9.

Administration of Proceedings

14. The Party in whose territory the proceedings take place shall be in charge of the logistical administration of dispute settlement proceedings, in particular the organisation of hearings, unless the Parties decide otherwise.

Conduct of the Review Panel

15. The Parties may set a separate budget for each set of panel proceedings pursuant to Articles 12.13 and 12.14. The Parties shall contribute equally to the budget, unless they decide otherwise.

16. The amount of remuneration of the Review Panel shall be set by the Joint Commission in accordance with Article 18.1.3(e) (Joint Commission). 

17. The expenses of the Review Panel include travel and lodging expenses and all general expenses of the panellists and experts appointed by the Review Panel.

18. Each panellist shall keep a record and render a final account to the Parties of their time and expenses. The chairperson shall keep a record and render a final account to the Parties of all general expenses incurred by the Review Panel.

19. Unless the Parties decide otherwise, within 15 days after the Parties establish the Review Panel, the terms of reference shall be:

“To examine, in light of the relevant provisions of Chapter Twelve (Trade and Labour) of the Canada – Israel Free Trade Agreement, the matter set out in the request referred to in Article 12.13, and whether the Party that was the object of the request has, in a trade-related matter, failed to comply with its obligations under Section A and to make findings, determinations and recommendations in accordance with Article 12.14.”

20. For a determination under Article 12.13.4(a) of whether the matter is trade-related, the Party that has requested the Review Panel has the onus of establishing that the matter is trade-related.  For a determination under Article 12.14.1(c) of whether the Party that is the object of the request has failed to comply with its obligations, the onus of establishing this non-compliance is on the Party that has requested the Review Panel and its case may be supplemented by any other information provided under Article 12.13.4(c).

21. A Review Panel shall only release the final report to the Parties.  Panellists may furnish separate opinions on matters that are not unanimously decided.  A Review Panel shall not disclose which panellists are associated with majority or minority opinions. 

Operation of Review Panels

22. The chairperson shall preside at all of the Review Panel’s proceedings.

23. The Review Panel may conduct its business by any appropriate means, including by telephone, facsimile transmission and video or computer links.

24. The Review Panel, in consultation with the Parties, may employ:

25. Only panellists may take part in the deliberations of the Review Panel. The Review Panel may, in consultation with the Parties permit the natural persons employed by the Review Panel to be present during the Review Panel’s deliberations.

26. The panellists and the natural persons employed by the Review Panel shall maintain the confidentiality of the Review Panel’s deliberations and any information that is protected under Article 12.16 and paragraph 25 of Annex 19.8 (Code of Conduct).

Written Submissions and Other Documents

27. Each Party shall deliver the original and a minimum of three copies of any written submission to the Review Panel and one copy to the Coordinator of the other Party. Delivery of submissions and any other document related to the Review Panel proceedings may be made by electronic mail or, if the Parties decide, by other means of electronic transmission, that provides a record of its sending. When a Party delivers physical copies of written submissions or any other document related to the Review Panel proceeding, that Party shall deliver at approximately the same time an electronic version of the submissions or other documents.

28. The Party requesting the establishment of the Review Panel shall deliver an initial written submission no later than 10 days after the date on which the last panellist is appointed. The Party that is the object of the review, in turn, shall deliver a written counter-submission no later than 25 days after the date on which the initial written submission of the Party requesting the establishment of the Review Panel is due.

29. The Review Panel, in consultation with the Parties, shall establish dates for the delivery of the subsequent written rebuttal submissions of the Parties and any other written submissions that the Review Panel determines are appropriate.

30. A Party may at any time correct minor errors of a clerical nature in any written submission or other document related to the Review Panel proceeding by delivering a new document clearly indicating the changes.

31. If the last day for delivery of a document falls on a legal holiday observed by either Party or on another day on which the government offices of either Party are closed by order of the government or by force majeure, the document may be delivered on the next business day.

Role of Experts

32. The Review Panel may seek information or expert advice from any person or body with relevant expertise or factual knowledge subject to the following terms:

Hearings

33. In every dispute arising under this Chapter, there shall be at least one hearing. The Review Panel may convene additional hearings in consultation with the Parties.

34. The chairperson shall fix the date and time of the initial hearing and any subsequent hearing in consultation with the Parties and the panellists, and then notify the Parties in writing of those dates and times.

35. Unless the Parties decide otherwise, the hearings shall take place in the territory of the Party that is the object of the review.

36. No later than five days before the date of a hearing, each Party shall deliver to the other Party and the Review Panel a list of the names of the persons who will be present at the hearing on behalf of that Party and of other representatives or advisers who will be attending the hearing.

37. Review Panels shall normally afford each Party equal time for arguments, replies and counter replies.

38. The Review Panel shall arrange for the preparation of hearing transcripts, if any, and shall, as soon as possible after these transcripts are prepared, deliver a copy to each Party.

Ex Parte Contacts

39. The Review Panel shall not meet with or contact a Party in the absence of the other Party.  A panellist shall not discuss any aspect of the subject matter of the proceeding with the Parties in the absence of the other panellists, subject to the ability of the Review Panel to delegate to the chairperson the authority to make administrative and procedural decisions.

Definitions

40. For the purposes of this Annex: 

adviser means a person retained by a Party to advise or assist the Party in connection with the panel proceeding;

assistant means, in respect of a panellist, a natural person under the direction and control of the panellist;

day means a calendar day;

legal holiday means every Friday, Saturday and Sunday and any other day designated by a Party as a holiday for the purposes of this Annex;

panellist means a member of a Review Panel established under Article 12.13; and

representative means an employee of, or any person appointed by, a government department or agency or of another government entity of a Party.

ANNEX 12.13.4
PARTICIPATION BY NON-PARTIES

A non-governmental person of a Party may provide a written submission to the Review Panel subject to the following terms: 

ANNEX 12.14
MONETARY ASSESSMENTS

1. The Review Panel shall reconvene as soon as possible after delivery of a request pursuant to Article 12.14.6.  Within 90 days of being reconvened, the Review Panel shall determine whether the terms of the action plan have been implemented or the non-compliance otherwise remedied.

2. In the event of a negative determination pursuant to paragraph 1, the Review Panel shall provide a monetary assessment payable on an annual basis that reflects a determination of the estimated costs of implementing the action plan or, in the absence of an action plan, other appropriate measures to remedy the non-compliance.

3. The Review Panel may adjust the monetary assessment to reflect:

4. Unless the Council decides otherwise, a monetary assessment shall be paid to the requesting Party.  If the circumstances warrant, the Council may decide that a monetary assessment shall be paid into an interest-bearing fund established by the requesting Party for that purpose, or designated by the Council, and shall be expended at the direction of the Council to implement the action plan or other appropriate measures to remedy the non-compliance. 

5. Ninety days from the date on which the Review Panel determines the amount of the monetary assessment pursuant to paragraph 2 or at any time thereafter, the requesting Party may provide notice in writing to the other Party demanding payment of the monetary assessment. The monetary assessment shall be paid in equal, quarterly installments beginning 120 days after the requesting Party provides the notice and ending upon the decision of the Parties or upon the date of a Review Panel determination pursuant to paragraph 6. 

6. If the Party that was the object of the review considers that it has eliminated the non-compliance, it may refer the matter to the Review Panel by providing written notice to the other Party. The Review Panel shall be reconvened within 60 days of that notice and issue its report within 90 days of being reconvened.

7. In Canada, the procedures for enforcement of a monetary assessment resulting from a Review Panel determination issued pursuant to paragraph 2 shall be the following:

8. If Israel has failed to comply with a notice provided pursuant to paragraph 5 within 180 days of it being provided, the procedures for enforcement of a monetary assessment resulting from a Review Panel determination shall be executed in Israel as follows:

Canada may present to any competent body in Israel a certified copy of a Review Panel determination issued pursuant to paragraph 2 and may demand compliance with the Review Panel determination.  Israel shall carry out the determination and provide for the enforcement of the Review Panel determination in Israel. The Review Panel determination shall be complied with in accordance with applicable Israeli law.

9. A change by a Party to the procedures it has adopted or maintained pursuant to this Annex that has the effect of undermining the provisions of this Annex shall be considered a violation of the obligations contained in this Chapter.

ANNEX 12.18
EXTENT OF OBLIGATIONS

Article 1: Application to the Provinces of Canada

1. At the time of entry into force of this Agreement, Canada shall provide to Israel through diplomatic channels a written declaration with a list of any provinces for which Canada is to be bound in respect of matters within their jurisdiction.  The declaration shall be effective on the date of receipt by Israel and shall not carry any implication as to the internal distribution of powers within Canada.  Canada shall notify Israel of any modification to its declaration at any time. The modification shall have effect six months after the date of this notification.

2. Canada shall not request the establishment of a Review Panel under Section C at the instance of the government of a province that is not included in the declaration referred to in paragraph 1.

3. Israel shall not request the establishment of a Review Panel under Section C, concerning a matter related to labour laws of a province unless that province is included in the declaration referred to in paragraph 1.

4. Canada shall, no later than the date on which a Review Panel is established pursuant to Article 12.13 respecting a matter within the scope of paragraph 3, notify Israel in writing of whether a recommendation of a Review Panel in a report under Article 12.14 or a monetary assessment imposed by a Review Panel under Annex 12.14 with respect to Canada shall be addressed to Her Majesty in right of Canada or Her Majesty in right of the province concerned.

5. Canada shall endeavour to have as many of its provinces as possible accept to be added to the declaration referred to in paragraph 1.

Article 2: Application to Israel

For the State of Israel, this Chapter applies to the State of Israel and when used in a geographical sense includes the territorial sea as well as the exclusive economic zone and the continental shelf over which the State of Israel, in accordance with international law and the laws of the State of Israel, exercises its sovereign rights or jurisdiction.

Date Modified: