FIPA Foreshadows in Foreign Workers Dispute

The central issue over whether to allow 201 temporary foreign workers at a Northern BC metallurgical coal mine has grown into a complex web of competing interests and concerns. The battle roster now includes two mining companies, two mining sites, three levels of Canadian government, and two labour unions. And the battle themes include questions of investment, protection of local workforces, and standards of ethical worker treatment by foreign owned and operated companies.

Overall, the entire episode highlights how a relatively minor and isolated labour dispute can degenerate into a messy and expanded ethical, investment, and legal battle. On this latter score, it has profound warning signs for the future of China-Canada relations over Canada’s own natural resource industries.

Ground-zero for the core of the current dispute is the Murray River coal mine, near Tumbler Ridge, BC.

HD Mining International Ltd. wants to bring in the workers to begin its initial operations there, and the workers are to be imported from HD Mining’s parent company, the Chinese owned Huiyong Holdings Group. The company argues that the project calls for “long-wall mining” experience, while citing a lack of such experience in the Canadian mining labour force.

That premise is disputed by various labour unions, which have taken the matter to the Federal Court, alleging that HD Mining is trying to take advantage of cheaper labour by passing over equally qualified Canadians.

Now the issue is stalled because it’s under investigation, but the holdup led to HD Mining’s minority partner, Canadian Dehua International Mines Group Inc., claiming damages to its operations at its nearby Wapiti River coal mine.

Last week, Dehua said it had decided to “wind down” those operations at Wapiti, because of investor concerns over the company’s entanglement with the now financially unpredictable Murray River project.

Essentially, the entire dispute over temporary foreign workers has grown into one in which domestic labour rights are in contest with foreign investor rights, and it hints at similar — but far larger — disputes on the horizon, given that the former is now said to be impacting investment returns.

Canada’s looming and highly controversial “Foreign Investment Protection and Promotion Agreement” (FIPA) with China is set to entrench foreign investor rights, and expose Canada to potentially massive liability lawsuits in the face of any government action that is deemed to change the original parameters of any investment by a Chinese company or corporation.

And so while the temporary foreign worker issue is principally a labour dispute, the questions and concerns it has raised — over the rights of foreign investors and how their adjudication may or may not impact investments — are significant and far-reaching.

The current dispute may not have fallen under the full sweep of Canada’s impending FIPA with China, but it has exposed how the same types of issues can quickly become damaging to a wide range of players.

The tangible difference, of course, is that the burden for paying any financial damages awarded under Canada’s FIPA with China will be sloughed onto the shoulders of Canadian taxpayers, rather than to the foreign corporations who’ve been challenged by Canadian interest groups.

Which could, in the future, work to dissuade any official Canadian challenge to questionable decisions that are made by Chinese companies and corporations that are heavily invested in Canadian industry.