Skip to content

40% of NAFTA challenges are against environmental rules

Martin Mittelstaedt recently wrote in the Globe and Mail about a number of NAFTA Chapter 11 cases. He writes, “claims that environmental rules are tantamount to expropriation are the single largest source of complaints under the provision, amounting to about 40 per cent of the 24 cases filed against Ottawa…Four cases based on environment-related rules were filed last year, the highest annual total since the trade pact began in 1994.”

He lists “NAFTA challenges to Canadian environmental regulations” as:

1. Ethyl Corp. over a gasoline additive. The dispute, begun in 1997, settled for about $13-million (U.S.).

2. S.D. Myers Inc. challenges a temporary ban on exports of PCBs. The dispute, begun in 1998, settled for $5-million.

3. Sun Belt Water Inc. challenges British Columbia’s moratorium on bulk water exports in 1998. It claims losses of about $200-million. The federal government says the claim isn’t valid.

4. Chemtura Corp. challenges a ban on the pesticide lindane, claiming $83-million in losses. The dispute began in 2001.

5. Albert Connolly, a U.S. investor, disputes an Ontario decision to turn a property with marble deposits into parkland. The case is filed in 2004, and Foreign Affairs says it is invalid. The dollar amount claimed was not disclosed.

6. V.G. Gallo, a U.S. investor, claims losses of $355-million over an Ontario regulation blocking the use of an abandoned mine for Toronto’s garbage. The case began in 2006.

7. Dow AgroSciences challenges a Quebec ban on the use of the herbicide 2,4-D on lawns. The case began in August and claims $2-million in damages.

8. Bilcon, a Delaware company, challenges a ruling blocking a quarry in Nova Scotia. The case began in 2008 and the company is claiming $188-million.

9. William Greiner and David Bishop, two U.S. investors, separately challenged Quebec regulations on salmon fishing in 2008. The claims are for combined losses of $6-million.

He writes, “Theresa McClenaghan, CELA’s executive director and counsel…says NAFTA’s provisions allowing investor claims are being viewed internationally as a weakness in the Canada-U.S.-Mexico trade pact, pointing to the fact that more recent treaties have clarifying language precluding these types of challenges. For instance, she said the free trade agreement with Colombia that Mr. Harper announced in November has much more restrictive language over investor challenges to environmental laws. The Canada-Columbia pact’s section explaining the two countries’ understanding of ‘indirect expropriation,’ said that regulations ‘designed and applied to protect legitimate public welfare objectives, for example health, safety and the protection of the environment, do not constitute indirect expropriation.’”

He notes, “She adds the wording of U.S. trade deals negotiated since NAFTA with countries such as Australia, Singapore and Chile also make it harder to challenge valid environmental regulations. The NAFTA countries should ‘reconsider whether there is a need for an investment chapter at all,’ she says.”

The full article can be read at http://www.theglobeandmail.com/servlet/story/RTGAM.20090403.wnafta0403/BNStory/National/MARTIN+MITTELSTAEDT.