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Luke Eric Peterson on Dow’s NAFTA challenge

Luke Eric Peterson writes in Embassy Magazine about Dow’s NAFTA challenge against Quebec’s ban on lawn pesticides. He notes:

THE $2 MILLION FIGURE MAY BE THE TIP OF THE ICEBERG
On March 31, the company filed for formal arbitration under NAFTA’s Chapter 11, seeking at least $2 million in compensation from Canadian taxpayers.

However, $2 million won’t even cover Dow’s legal fees. So, what gives?

Quite simply, foreign investors are not obliged to tally up potential losses at the outset of these NAFTA arbitrations, which is why the Dow claim looks so modest, at least for now. In the months (or even years) to come, you can be sure that Dow will up the ante.

Indeed, Dow may expand its claim to challenge pesticide bans in other parts of Canada. With other municipalities and provinces looking at cracking down on such chemicals—an Ontario-wide ban comes into effect later this month—the $2 million figure may be the tip of the iceberg.

THE LIMITS OF THE NAFTA ARBITRATION PANEL
Will Amos, an Ottawa-based lawyer representing the David Suzuki Foundation and the Quebec group Equiterre, notes that his clients can submit written arguments to a NAFTA arbitration panel, but they may be blocked from showing up and watching or participating in these high-stakes arbitration proceedings.

‘There is no guarantee that the investor won’t request confidential proceedings,’ Mr. Amos said, ‘which would further limit our ability to understand what case they’re bringing, and there will be no opportunity for us to make oral representations before the tribunal.’

‘This is totally unlike the Supreme Court of Canada’, he adds.

PESTICIDE BANS HAVE ALREADY BEEN UPHELD BY THE SUPREME COURT OF CANADA
Indeed, it’s unfortunate that the arbitration proceedings could be conducted in private. Otherwise, some of Canada’s Supreme Court justices might benefit from sitting in on the arbitration hearings, and gaining a better appreciation of this NAFTA process. If permitted into the hearing room, the justices might be taken aback by the extent to which NAFTA tribunals can now review the actions of governments.

Indeed, one of the things that has incensed many members of the environmental community—and which might also bemuse members of the Supreme Court—is that pesticide bans in other parts of Canada have already been upheld by the Supreme Court of Canada.

In 2005, the court dismissed an effort by a pesticide industry association to challenge a ban introduced by the City of Toronto. Environmentalists assumed that this ruling affirmed the right of governments to act proactively so as to minimize potential health risks. However, it now appears that the Supreme Court was merely engaged in a dress rehearsal.

Sure, pesticide bans in different parts of Canada have been declared constitutional by the highest court in the land, but in the 21st century, constitutions are not the only law of the land.

Rather, it will fall to three arbitrators—one appointed by Dow, one by Canada, and the third by mutual assent—to determine whether our North American constitution—the NAFTA—sanctions the actions of the Quebec government.”

NO AMOUNT OF RISK IS WORTH TAKING WHEN IT COMES TO UNNECESSARY CHEMICALS
Dow protests that Quebec lawmakers failed to take heed of several risk assessments, including one by Canada’s federal government, which showed that the pesticide ingredient 2,4-D ‘does not entail an unacceptable risk of harm to human health or the environment.’

Of course, others, including some governments, have questioned whether risk assessments should be the final word on such matters. Environmental and medical groups like the Canadian Cancer Society have long argued that no amount of risk is worth taking when it comes to ‘unnecessary’ chemicals, such as lawn pesticides, which are used for purely cosmetic purposes.

However, where governments wish to drive certain risks closer to zero, it will fall to a panel of NAFTA arbitrators to decide who shall pay the price for doing so: the chemicals industry or the Canadian taxpayer.

The full article is at
http://embassymag.ca/page/printpage/cross_border_disputes-4-15-2009