Final Environmental Assessment of the Canada-Kuwait Foreign Investment Promotion and Protection Agreement (FIPA)

This report outlines the results of the Final Environmental Assessment (EA) of the Canada-Kuwait Foreign Investment Promotion and Protection Agreement (FIPA) negotiations. Negotiations for the Canada-Kuwait FIPA were concluded successfully in April 2009. Once the treaty has been signed, the full text of the agreement will be available on the website.

FIPA negotiations are subject to the 2001 Framework for Conducting Environmental Assessment of Trade Negotiations. The process focuses on the likely economic effects of trade and investment negotiations and their likely related environmental impacts in Canada. The process involves three phases – the Initial EA, Draft EA and Final EA. The middle phase, also known as the Draft EA, is not undertaken if the FIPA is not expected to result in significant environmental impact in Canada. Public consultations are an integral part of the EA process.

An ARCHIVED - Initial EA of the Canada-Kuwait FIPA was completed in February 2009. Consultations were held in January 2009 with the Federal-Provincial-Territorial Trade Committee (C-Trade) and the Environmental Assessment Advisory Group (EAAG) which is composed of individuals from industry, academia and non-governmental organizations. The Government of Canada opened the Initial EA for public comments from February 17 to April 30, 2009.

A Draft EA was not carried out, as the economic effects and environmental impacts in Canada of the Canada-Kuwait FIPA are not expected to be significant. The purpose of the Final EA is to document the outcome of the negotiations in relation to the EA process, i.e. to confirm the findings of the previous analysis based on the concluded negotiations.

The findings of this Initial EA were communicated to Canada’s lead negotiator and were made a part of the negotiation strategy. These findings had indicated that significant changes to investment flows into Canada were not expected as a result of these negotiations.

The results of the Final EA of the Canada-Kuwait FIPA negotiations confirm the findings of the Initial EA. The economic effects and environmental impacts in Canada of the Canada-Kuwait FIPA are not expected to be significant.

No new issues arose during the latter stages of the Canada-Kuwait FIPA negotiations with respect to potential environmental impacts in Canada. The environment-related provisions of the Canada-Kuwait FIPA closely track those of Canada’s FIPA model.

Mirroring Canada’s model, the final Canada-Kuwait FIPA includes general exceptions with respect to the protection of human, animal or plant life or health, as well as the conservation of exhaustible natural resources. These safeguards, found in paragraph 1 of Article 17, are based on those contained in GATT Article XX and GATS Article XIV.

As in the FIPA model, the agreement contains a clause on “not lowering standards”, whereby the signatories recognize that it is inappropriate to encourage investment by relaxing domestic health, safety or environmental measures. In the event that a Party offers such encouragement, the other Party may request consultations.

Finally, as in the model, the Canada-Kuwait FIPA provides that regulations designed and applied to advance legitimate public welfare objectives, such as those respecting health, safety and the environment, do not constitute an indirect expropriation.

Comments on this report may be sent by email, mail or fax to:

Trade Policy Consultations and Liaison Division (BSL)
Final Environmental Assessment of the Canada-Kuwait Foreign Investment Promotion and Protection Agreement (FIPA)
Department of Foreign Affairs and International Trade Canada
Lester B. Pearson Building
125 Sussex Drive
Ottawa, Ontario
K1A 0G2

Fax: (613) 944-7981
Email: consultations@international.gc.ca

Any comments received will be circulated to the lead negotiator and the Government of Canada’s EA of Trade Steering committee in order to inform future EAs of trade and investment negotiations and other relevant policy development and decision-making processes.