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PAGE 4 NEWS July 12, 2010 • law Times 'This has been dragging on for years' Continued from page 1 The key obstacle to rati- fication has been the failure of six provinces — Alberta, Quebec, Manitoba, New Brunswick, Nova Scotia, and Prince Edward Island, as well as the Yukon and Northwest Territories — to pass enabling laws. "Ot- tawa passed the legislation in 2008 but has yet to issue an order-in-council to avoid upsetting Alberta and Que- bec," Leon says. There is considerable spec- ulation that the two prov- inces are resisting enabling legislation because they re- gard it as a useful bargain- ing tool in federal-provincial negotiations, especially those surrounding the Tory gov- ernment's proposal for a na- tional securities regulator. "ICSID ratification is a great opportunity for the provinces to extract conces- sions," says Marc Lalonde, a prominent international ar- bitrator and former partner at Stikeman Elliott LLP who was a policy adviser and cabi- net member in Pierre Trudeau's government. "It's hard to get the true story from anyone at the federal or provincial level, but for Canada to be a laggard on something so obvious and relatively innocuous and non- controversial certainly casts a negative light on the country in the international arbitration and business communities." Still, matter of reputation. Leon also the Congolese court, but that's less than inviting since that court has already fined First Quantum US$12 bil- lion for its alleged violations of the law." Under ICSID, First Quantum could have in- cluded a dispute resolution clause in its agreement with the DRC, which explic- itly allows such terms in its mining code. At the same time, an ICSID ruling in the company's favour would have allowed it to seize inter- national assets belonging to the Congolese. The dispute played a role in Canada's recent decision 'If the provinces are using ICSID rati- fication as a bargaining chip in inter- provincial dealings, they're cutting off their nose to spite their face,' says Barry Leon. points to a number of instances in which Canadian companies have suffered significantly as a result of the ICSID deadlock. In one case, First Quantum the issue isn't just a Minerals Ltd. of Vancouver invested US$765 million in a copper mining project in the Democratic Republic of Con- go. The Congolese government seized the mine in September 2009 after citing a vague charge of violating domestic law. "Because Canada hasn't ratified ICSID, First Quantum must take the more laborious route of seeking arbitration through the United Nations Commission on International Trade Law," Leon says. "There's to abstain from a vote on granting debt relief to the DRC. "If the provinces are using ICSID ratification as a bar- gaining chip in interprovin- cial dealings, they're cutting off their nose to spite their face," Leon says. Still, a survey comparing ICSID with other forms of arbitration conducted by in- ternational dispute resolution firm Appleton & Associates suggests it would be a mistake to blindly choose the ICSID process without considered judgment of the alternatives. It took an average of 191 days, for example, for ICSID tribunals to reach preliminary decisions on matters such as jurisdiction; UN commission proceedings took only 120 days. In addition, the 310 days it took ICSID panels to reach a decision from the end of the merits hearing was 41 days lon- ger than the UN route. Still, the study also shows ICSID is the first forum choice for more than 93 per cent of reported treaty claims, a fact that con- firms its position as the pri- mary venue for international investment arbitrations. "The fact remains that IC- SID provides considerable clout in the world of interna- tional law," Leon says. While federal officials couldn't be reached for com- ment on the issue, Lalonde says Canada's failure to ratify the convention is virtually incom- prehensible to the international community. "People don't un- derstand when I try to explain why Canada avoided signing ICSID for so long and they un- derstand even less when I try to explain why we still haven't rati- fied the convention. The truth is that this has been dragging on for years to the point of being ridiculous." LT Ruling leaves LAO execs named in case Continued from page 1 well as to host its own conferences," the audit report stated. It also found client numbers were artificially inflated and that membership records were manipulated in order to influence the composition of the clinic's board. "This calls into question the financial management of the clinic and the board's ability to be accountable for the financial manage- ment of the clinic," the report concluded. In response, the clinic claimed the inflated client numbers were the result of administrative errors and that, while many other agencies had improperly reported their extra funding, LAO had enforced the rules inconsistently. Margaret Parsons, executive director of the clinic, publicly ac- cused LAO of engaging in racial profiling and presuming guilt in its pursuit of its management following the release of the forensic audit. "It is anti-black racism in its purest form. . . . Sometimes I feel like we're in 1950s Alabama, the way they treat us," she told the Toronto Star at the time. Subsequently, the clinic made the racism allegations official by filing a human rights complaint against LAO, a matter that remains ongoing. The action also named Angela Longo, president of LAO at the time, and Sue McCaffrey, then its vice president of clinics and special services, for publicly characterizing the clinic in what it saw as a negative light. None of the racism allegations have been proven before the tribunal. The complaint alleges LAO's audit of the clinic was aggressive Willis & Winkler on Leading Labour Cases 2010 An analytical review of key labour decisions and major trends This annual resource, also available online in Labour Spectrum, identifies key developments and addresses continuing and emerging issues important to your labour practice. It also goes hand in hand with Labour Arbitration Cases. 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It also claims executive directors are usually involved in audits but says LAO excluded Parsons for most of the investigation. LAO stopped the clinic's direct deposit, which it said had never happened to other agencies. The claim detailed further instances of alleged discrimination by LAO and its predecessor agency dating back as far as 1993. The complaint said the previous agency had failed to support the initial formation of the clinic and made inappropriate inquiries into the background of three members of its steering committee. It also claimed Parsons was paid less than her counterparts at other agencies between 1997 and 2001 and that the clinic experienced extreme delays in having phone calls returned from LAO staff. Nevertheless, in an interim decision released last month, Joachim narrowed the scope of the complaint to the audit process because more than 12 months had passed between most of the allegations and the complaint. "I am not satisfied that the applicant has established any basis for the delay in raising the historical allegations," she wrote. At the same time, LAO attempted to have Longo and Mc- Caffrey removed from the proceedings. But in the June decision, Joachim ruled against it. "These allegations, if established, could give rise to a remedy against the personal respondents. In these cir- cumstances, I do not find that it would [be] appropriate to remove the personal respondents from these proceedings." Longo is currently on sick leave from her job as Ontario's dep- uty minister of health promotion and was unavailable for com- ment. LAO, where McCaffrey still works as vice president and general counsel, declined interview requests on the case. "Since this matter is currently before the tribunal, it would For a 30-day, no-risk evaluation call: 1.800.565.6967 LT0712 WillisWinkler_LT_July12.indd 1 Canada Law Book is a Division of The Cartwright Group Ltd. Prices subject to change without notice, to applicable taxes and shipping & handling. www.lawtimesnews.com 7/7/10 12:04:40 PM not be appropriate for us to comment at this time," Peter Boisseau, a spokesman for the agency, said in a statement. Parsons couldn't be reached for comment by press time. Both parties have expressed an interest in mediation, according to Joachim's ruling last month. LT Elaine B. Willis and The Honourable Warren K. Winkler, Chief Justice of Ontario functus officio Dunsmuir v. New Brunswick Evans v. Teamsters, W e b Weber Hydro- Quebec Loc. 31 e r