Canadian move triggers a tempest in AIIB's teapot

Like most multilateral development banks, the Asian Infrastructure Investment Bank has kept a low profile since its establishment. With a governance structure comparable to those of other multilateral development banks, the AIIB has without any song and dance focused on providing funds for countries in the region to help them build or improve their infrastructure and boost their capability to, for example, combat the COVID-19 pandemic.

But the recent resignation of Bob Pickard from the AIIB has triggered what appears to be a tempest in a teapot. A Canadian national, Pickard, who was the director-general of the AIIB's Department of Communication, alleged that the bank is "dominated by the Communist Party of China" in his resignation letter. The AIIB has thus been forced to respond to this baseless charge.

Apparently unaware of why Pickard made such an allegation, the AIIB said that it had supported Pickard since he took up his position in March 2022. Yet, as an international organization, the AIIB has acted in a professional manner by ordering an investigation into Pickard's claim.

The outcome of the investigation will be revealed in due course. But for outsiders, Pickard's statement is a loaded allegation. After all, according to the AIIB's Articles of Agreement, of all the 12 members of the AIIB Board of Directors, which is responsible for the bank's general operations, only one is from China while the other 11 are from other countries, even though China is the largest shareholder in the AIIB with 26.6 percent of the voting rights.

It seems Pickard has chosen to please those Western politicians who prefer to view everything related to China through tinted glasses while exposing his unprofessional conduct, which is a deplorable betrayal of his obligations as well as violation of professional ethics.

Seemingly in response to the allegation, the Canadian government decided to halt its official engagement with the AIIB with immediate effect. Media reports say that Canadian Deputy Prime Minister and Finance Minister Chrystia Freeland, who is also the Canadian representative in the bank's Board of Governors, has ordered an "immediate" review of the allegation made by Pickard.

Many may not be able to judge whether the Canadian government's response is professional, but given that Sino-Canadian ties have been spiraling downward since Ottawa detained Meng Wanzhou, chief financial officer of Huawei, at the behest of the United States, they have reason to speculate on the root cause of the problem. The Canadian government has since changed its attitude toward China, with politicization trumping mutually beneficial bilateral relations.

With respect to Pickard's accusation, the Canadian deputy prime minister also said in a somewhat threatening tone,"... I am not ruling out any outcome following its (the investigation's) completion". She was apparently talking about Canada's possible withdrawal from the AIIB. Needless to say, she is aware about the stir her statement would cause globally.

Worse, she said Canada would discuss the issue with its allies and other members of the AIIB. What she really meant was that Canada would try to seek the support of other US allies, which could lead to other AIIB member states following in the footsteps of Canada to withdraw from the AIIB.

This is an apt example of how irrational a country could be when overwhelmed by political considerations. From the legal point of view, Canada is free to withdraw from the AIIB. But one also needs to be aware of the following rule, which says that if a member state fails to fulfill any of its obligations to the AIIB, the Board of Governors may suspend its membership through a "super majority vote" under the AIIB Agreement. Once suspended, the member state will cease to be a member of the bank one year from the date of its suspension.

No one likes a tempest in a teapot, which Pickard's resignation has triggered, to turn into a real storm. So it is imperative that all parties soften their tone till at least the outcome of the investigations.

The author is dean of the School of International Law at the China University of Political Science and Law.