Remember, Remember...
No, I didn't wear a poppy today. I forgot.
What I did instead was spend the better part of my day researching a topic I feel strongly about (NAFTA, in particular Chapter 11), and writing it all up in a letter to my MP, MLA, Premier, the three senators who deal with BC, and the Prime Minister. All in all, once I typed in the original letter to the editor that finally prodded me into action, and included the four articles from the Internet that particularly addressed my concerns, (and including a page of addresses of whom I was sending it to, lol) I had 10 pages.
Tomorrow I'm going to finish printing them out, addressing the envelopes, and mailing them all out. And frankly, exercising my hard-defended right to complain to my government about a poorly-thought-out pact they have made, and to demand they take action, seems to me a better way to celebrate the lives lost or unutterably altered in order to ensure that I and my children have that right, than remembering to wear a poppy.
Thanks, guys. I really do appreciate what you've done for it. I'm aware of it every day. Thank you.
To:
Charlie Wyse, 2 - 487 Borland St, Williams Lake, BC, V2G 1R9
Cathy McLeod, House of Commons, Ottawa, Ontario, K1A 0A6
Gordon Campbell, PO Box 9041 Stn Prov Gov’t, Victoria, BC, V8W 9E1
Larry Campbell, The Senate of Canada, Parliament Buildings, Ottawa, Ontario, K1A 0A4
Mobina Jaffer, The Senate of Canada, Parliament Buildings, Ottawa, Ontario, K1A 0A4
Gerry St. Germain, The Senate of Canada, Parliament Buildings, Ottawa, Ontario, K1A 0A4
Stephen Harper, Office of the Prime Minister, 80 Wellington Street, Ottawa, Ontario, K1A 0A2
November 11, 2008
Re: NAFTA and Chapter 11 of NAFTA
Dear Sir,
Recently I came across, in my local newspaper, the letter-to-the-editor quoted below. Naturally, I was outraged by the idea that an American corporation, having had a chemical gasoline additive they manufactured banned in Canada because of the health risks, was able to then not only receive a settlement to cover damages to its reputation and lost income, but was also able to not only get the ruling forbidding the import of their additive overturned as discriminatory treatment under Chapter 11 of NAFTA, but also force the Canadian government to issue a public apology and a statement that directly contradicted its own findings by saying that there was no health nor environmental risk posed by this additive.
However, I am thoroughly aware that letters-to-the-editor are rarely actually checked to confirm their statements, so I decided, having finally had my fill of hearing such negative things about NAFTA, to do a little research myself.
What I discovered has appalled me. I include copies of the more salient points for your information.
To say that I am thoroughly disgusted and infuriated would be to drastically understate the extent of my outrage. How dare Canada be party to an agreement in which corporations, the very people who are trying to sell us any given product (let alone foreign corporations, who are under no obligations to the people of Canada), rather than our own scientists, are the ones who dictate whether or not any given product is safe? How dare Canada sign away her sovereign rights to decide for herself what is and what is not safe for use?
I have felt, ever since I first heard of NAFTA, that Canada was getting the short end of the stick. I was maddened beyond belief when Stephen Harper, upon his ascension to the office of the Prime Minister of Canada, instantly gave in to the Americans on the Softwood Lumber War-despite Canada having won every single appeal the US brought to the table, and despite the US having run out of allowable appeals! I am absolutely enraged that, while the Americans are able to freely spend several trillion dollars to bail out their own financial system, in order to help stabilize their economy, Canada is not allowed to do the same in order to help stabilize our own, forestry-based economy because, as I understand it, under NAFTA, such a thing is considered an industry subsidy, and expressly forbidden.
This entire agreement goes beyond unbelievable. That Canada would actually knowingly sign such a ridiculous agreement is outrageous. Please, as a voter, a citizen, a taxpayer, and a mother, I implore you to do everything you can to get Canada out of this horribly one-sided agreement. The few advantages it supposedly grants us are not worth the threats, both real, realized, and potential, to our health and our status as a sovereign nation.
Sincerely,
Mrs. [Kryss LaBryn (signed)]
1) Letter to the Editor, The 100 Mile House Advisor, Volume 6, Issue 42 (Nov. 5, 2008), Page 6: “Solutions for Ashcroft health care system”
2) CUPE Website (http://cupe.ca/privwatchsep08/Protection-of-Canada) Sept. 18, 2008: “Protect healthcare from NAFTA”
3) The Council of Canadians Website (http://www.canadians.org/trade/action/MP_trade.html) “Four Reasons Why NAFTA Is A Bad Deal For Canada”
4) The Global Policy Forum Website (http://www.globalpolicy.org/socecon/envronmt/ethyl.htm) “NAFTA & Environmental Laws: Ethyl Corp. v. Government of Canada: Chemical Firm Uses Trade Pact to Contest Environmental Law”
5) The Social Funds Website (http://www.socialfunds.com/news/article.cgi/597.html): “Sustainability Investment News: Companies Using NAFTA to Undermine Legitimate Regulations”
1) Letter to the Editor, The 100 Mile House (Nov. 5, 2008): “Solutions for Ashcroft health care system”
Dear Editor,
I recently suggested three possible funding solutions for Health Care problems, in Ashcroft and the province. One solution outlined one source of the problem was in fact our NAFTA agreement, specifically Chapter 11, and how it jeopardizes our Medicare Program in Canada.
In a recent article by Dana Gabriel published on GlobalResearch.ca she reveals that “In July, a group of 200 American investors led by an Arizona businessman filed papers alleging that, as a result of barriers put in place, they were unable to open more private healthcare clinics in the province of British Columbia. They are asking for $4 million in incurred expenditures as well as an additional $150 million in potential lost profits. This case could be settled by formal arbitration hearings under Chapter 11 and represents the first ever challenge to Canada’s health care system… NAFTA’s investment rules continue to put Canada’s health care system at risk of future privatization. Canadian government must further enforce the Canada Health Act to prevent more challenges. By way of example: “In 1006, Jean Chrétien’s Liberal government tabled a bill that banned imports of MMT, a gasoline additive. This was done as a result of studies that showed it posed a health risk. The U.S> Ethyl Corporation maker of MMT sued Canada, claiming discriminatory treatment under Chapter 11 of NAFTA… Ethyl received over $13 million, which covered damages to its reputation, lost profits, and legal fees it incurred. They forced the Canadian government to repeal the bill, banning MMT imports. The government also had to issue an apology and public statement saying that the additive posed no health or environmental risks.
How disturbing that a corporation practically dictated the terms of the settlement and overturned the laws of a supposedly sovereign nation.” There are other cases we lost as well and paid dearly for. You see folks it does not matter which political party is in power; NONE of them are safe-guarding Canada’s best interests.
Friends, if you wish to keep even a mere vestige of our Health Services in Ashcroft and this province you are going to have to shut the TV set off, get out a pen and paper and start writing to your M.P., M.L.A., and every other elected official including your Mayor and encourage all of your friends and relatives to do the same. Demand action by these accountable public servants who are supposed to be working for we citizens. Without prompt serious attention to this matter say goodbye to Medicare and the country. Remember that the foundation to the problem must be fixed in order to correct he problem. Band-aids do not fix a broken bone.
Further, do not accept the propaganda regarding the current so called financial crisis. It is a manufactured problem world wide created to justify several things including reduced gov’t funding for social programs and also to force the country to finally accept a new world currency (currently being pushed by the media for our gov’ts).
There is no faster way to dissolve a nation’s sovereignty than to remove its inherent right to create its’ own money supply. Act today or kiss your country good-bye.
G. McIntosh
Ashcroft, BC
2) Protect health care from NAFTA
September 18, 2008 09:34 AM
Ottawa, ON - Today, the Canadian Union of Public Employees (CUPE) called on Canada’s political leaders to include protection of not-for-profit health care in their platform to support families.
“Our health care system is under attack from creeping privatization, thanks to actions by some provincial governments and neglect by the federal government,” said Paul Moist, national president of CUPE. “Further, the federal government has been ignoring concerns that NAFTA investment rules put the Canadian health care system at risk. Now, these concerns are becoming substantiated in a law suit filed recently by an American investor.”
Both Liberal and Conservative governments have maintained that Canada’s medicare system is protected from American-style privatization under the North American Free Trade Agreement. But Arizona businessman Melvin J. Howard is about to test the boundaries.
Howard has filed legal papers that could lead to arbitration against the Canadian government under provisions of NAFTA that permit foreign investors to sue government for investment loss.
Howard and his financial backers claim to have lost $4 million in expenses and add an additional $150 million in lost profit after a failed attempt to invest in the BC health care system. The BC system has become increasingly open to foreign investment and privatization.
“For everyone who thought health care was safe from NAFTA, this is a reality check,” says Moist. “This election, we need a government that is willing to protect our public health system, not bury its head in the sand while our health care system is undermined by increased privatization. Protection of our health care system must be part of our leaders’ platforms on addressing the needs of our Canadian families.”
“The threat also exposes the serious risks that follow from the privatization schemes British Columbia and other provinces have allowed to creep into their health care systems,” says trade lawyer Stephen Shrybman. “NAFTA threatens to transform that modest flow, if it is not immediately abated, into a torrent.”
For further information:
Paul Moist, CUPE National President - 613-558-2873
Allison Gifford, CUPE Communications - 613-484-2571
3) The Council of Canadians : Tell your MP that Canada needs a better trade policy
Governments and big business have spent the last 15 years telling us that free trade is good for us. But Canadians know better. Despite promises that free trade deals would make Canadian companies more competitive, Canada has consistently lagged behind the United States in both productivity and competitiveness since the implementation of the Free Trade Agreement (FTA) in 1989 and the North American Free Trade Agreement (NAFTA) in 1995. The new jobs created in the free trade era have been largely part-time and poorly paid. Social inequality in our country has grown as a direct result of workers’ inability to earn a decent wage to support their families.
In the aftermath of the softwood lumber decision, even former supporters of free trade are arguing that NAFTA isn’t working for Canada. Some have called for forceful retaliation against the U.S., while others have suggested that we should get out of NAFTA - before it’s too late. The Council of Canadians believes that Canada needs a new trade policy - one that favours democracy, public services and the environment, over the “rights” of corporations to make a profit.
FOUR REASONS WHY NAFTA IS A BAD DEAL FOR CANADA:
NAFTA undermines democracy.
Foreign corporations use Chapter 11 to challenge environmental laws, municipal land-use controls, water protection measures, the activities of Canada Post, and even the decisions of judges and juries. While no Canadian citizen or corporation could bring forward these challenges, NAFTA grants corporations of member countries the right to challenge any federal rule or law that they perceive as a barrier to their ability to make a profit. The result is millions of tax dollars being spent to either fight or settle with these corporations.
NAFTA threatens health care and other public services.
The exemption for health care under NAFTA, which has largely kept U.S. for-profit health corporations out of Canada, applies only to a fully publicly funded system. Once privatized, the system must give “national treatment” rights to American private hospital chains. The NAFTA exemption only applies to medicare as it stood in 1989, and doesn’t provide protection for a possible expansion of medicare into new areas like homecare and pharmacare.
NAFTA strips Canada of control over our energy resources.
Canada now produces about 40 per cent more oil than it consumes, but has to rely heavily on imported oil from offshore. Thanks to NAFTA, Canada now exports 70 percent of the oil and 61 per cent of the natural gas we produce each year to the United States. NAFTA prevents us from selling our energy resources to Canadians at rates lower than we sell them in the U.S. And because of NAFTA’s proportional sharing clause, we can’t ever cut back on the amount of energy we produce and sell to the United States, even in times when our country runs short.
NAFTA could put our water up for sale.
Canadian water is defined as a “service” and an “investment” under NAFTA. The agreement’s so-called water exemption is inadequate. After British Columbia banned bulk exports of lake and river water, the California-based Sun Belt Corporation launched a Chapter 11 challenge, seeking $10 billion in damages. The case is still outstanding, and has profound implications for the future of Canada’s water.
Current trade policies serve as a platform for deeper integration with the U.S. Our business and political elites are pushing for deeper ties with the U.S., and would see Canada privatize health care, join common security projects, give up sovereignty over our natural resources and harmonize our food and health policies with lower U.S. standards.
NAFTA is a bad deal for Canada, working families, our environment and our sovereignty. We want a trade policy that protects our democracy, social services, natural resources and way of life.
4) NAFTA & Environmental Laws: Ethyl Corp. v. Government of Canada: Chemical Firm Uses Trade Pact to Contest Environmental Law
April, 1997
Ethyl Corporation’s $251 million lawsuit against a new Canadian environmental law is sure to set off alarm bells throughout the public interest world. The suit, brought under the terms of the North American Free Trade Agreement, demonstrates how present and future international economic pacts could pose a danger to environmental regulations and other safeguards.
In early April, the Canadian Parliament acted to ban the import and interprovincial transport of an Ethyl product -- the gasoline additive MMT -- which Canada considers to be a dangerous toxin. Ethyl (the company that invented leaded gasoline) responded on April 14 by filing a lawsuit against the Canadian government under NAFTA. Ethyl claims that the Canadian ban on MMT violates various provisions of NAFTA and seeks restitution of $251 million to cover losses resulting from the "expropriation" of both its MMT production plant and its "good reputation."
MMT is a manganese-based compound that is added to gasoline to enhance octane and reduce engine "knocking." Canadian legislators are concerned that the manganese in MMT emissions poses a significant public health risk. In addition, automobile manufacturers have long argued that MMT damages emissions diagnostics and control equipment in cars, thus increasing fuel emissions in general. Ethyl is the product’s only manufacturer.1
The Environmental Defense Fund (EDF), which tracks the use of MMT, reports that the additive is used only in Canada. The United States EPA has banned its use in the formulated gasoline, which includes approximately 1/3 of the U.S. gasoline market. An EDF survey of the remaining producers reports that none use the additive.2 California has imposed a total ban on MMT. Canadian legislators wanted to ban the use of MMT in order to protect the Canadian public. Because they could not do so under Canadian Environmental Protection Act (CEPA) provisions, they chose the best available alternative: banning MMT’s import and transport.3
NAFTA requires member countries to compensate investors when their property is "expropriated" or when governments take measures "tantamount to expropriation." Ethyl claims that the MMT ban constitutes such an expropriation. The company argues that the ban will reduce the value of Ethyl’s MMT manufacturing plant, hurt its future sales and harm its corporate reputation. The case will be an important test of how expropriation is to be defined in NAFTA and future agreements.
A key provision of NAFTA makes the lawsuit possible. Under NAFTA’s investment chapter, for the first time in a multilateral trade or investment agreement, corporations are granted "private legal standing" or the ability to sue governments directly and to seek monetary damages. This "investor-to-state" dispute resolution mechanism diverges from dispute resolution systems in previous international economic agreements in two ways: First, previous agreements allow only national governments to bring suits. Second, these agreements do not allow for monetary compensation. The most a government can do if it is successful in a suit is impose tarriffs on the violating nation.
This lawsuit is the third, and largest, under NAFTA’s investor-to-state dispute mechanism. According to an official at the International Centre for the Settlement of Investment Disputes (ICSID), the institution that arbitrates most of the world’s investment complaints, the $251 million Ethyl seeks is higher than any amount requested in an ICSID investor-to-state proceeding.4
The Ethyl suit raises a host of issues that should be of concern to policymakers particularly since the U.S. is negotiating the expansion of NAFTA as well as a new multilateral investment agreement (MAI) that would apply NAFTA-like standards worldwide. The Ethyl case could set a precedent where, under NAFTA and similar agreements, a government would have to compensate investors when it wishes to regulate them or their products for public health or environmental reasons. If Ethyl wins its case, a precedent will be set whereby the legal right of corporations to be compensated when public health regulations affect a company’s bottom line is given the same weight as the public’s right not to be harmed by industrial toxins. This could send the message to investors that seeking compensation from the public for the cost of complying with environmental regulations constitutes a legitimate business strategy. Thus, in pacts like NAFTA, groups opposed to strong environmental regulation may find an effective mechanism for advancing the radical "takings" agenda for which they have not been able to build public or legislative support.
Effective limitations on the frequency and impact of lawsuits are removed when investors are granted the right to sue national governments on their own behalf. When governments are the only entities that have legal standing to bring a case against a regulation or other law under an international agreement, political and diplomatic pressures reduce the likelihood that frivolous lawsuits will be initiated. The investor-to-state dispute resolution clause in NAFTA (and in the proposed MAI) removes this limitation, allowing corporations and individual investors to sue directly and to seek monetary compensation. The Ethyl suit is an example of this new dispute resolution mechanism in operation.
If claims like Ethyl’s are successful and proliferate, the costs to governments could be burdensome. Under investor-to-state dispute resolution, corporations can request compensation for actual and future earnings losses as well as for the cost of repairing their "tarnished images." Damage claims can therefore be very high, as in the Ethyl case. In addition, multiple investors can consolidate their suits, thereby multiplying a government’s potential liability.
If such cases were to become commonplace, governments would have to give due consideration to the potential fiscal costs before passing needed regulations. The threat of suits like Ethyl’s could be used to pressure lawmakers who are considering new regulations. Ethyl submitted an intent to file suit six months before the MMT ban was passed in the Canadian legislature. Ethyl hoped that the threat of a lawsuit would deter policymakers from passing the bill. While Ethyl failed in this instance, the ability of investors to use their private legal standing to credibly threaten major suits could lead to successful efforts in the future to intervene in the democratic decision-making process and alter the outcome of legislative debate.
Ethyl also claims that the legislative debate itself constituted an expropriation of its assets because public criticism of MMT damaged the company’s reputation. Thus, Ethyl is using NAFTA to file what is, in effect, a SLAPP-suit against the Canadian Parliament. Far from worrying about the implications of such actions, U.S. trade officials have argued that the ability of investors to use legal threats to influence legislative debates is a healthy innovation that will prevent governments from passing laws that violate international agreements.5
In cases like Ethyl’s, international panels, not domestic courts, will have ultimate legal authority. No Canadian court will rule on whether the MMT ban violated NAFTA. Under NAFTA, Ethyl can pursue its case before an international tribunal where the proceedings are conducted in secret, the records are not publicly accessible and the decision is legally binding. The panel will be comprised of one person chosen by Ethyl, one by the Canadian government, and the third jointly by the first two appointees. If it loses, the Canadian government will have no recourse to appeal in domestic courts. Claims that go to international arbitration are often expedited; lawyers for Ethyl predict that the case will be settled by the end of the year.
The Ethyl case suggests that critics of NAFTA and GATT may have been correct in arguing that these agreements could pose a threat to national sovereignty. The likelihood that NAFTA, and other agreements like it, could restrict the ability of democratically elected governments to legislate on such matters as public health and safety and environmental protection was downplayed by many advocates of the agreement. Yet the Ethyl case suggests that critics’ concerns were not misplaced. Indeed, as Ethyl’s attorneys recently argued: "[T]he potential for lawsuits under this [investor-to state dispute resolution] process is far-reaching since it could be used by more than 350 million individuals and corporations throughout the NAFTA countries."6 Under the proposed MAI, which will cover investors from 29 of the world’s industrial countries, the numbers would of course be higher.
Notes
1. While automobile manufacturers may be legitimately concerned with clean air standards, their primary opposition to MMT is that they must bear the costs of repairing the cars’ damaged pollution control systems.
2. Ivanovich, David. "Collision Course Slow Start for Gas Additive MMT’s Effect on Air, Cars Debated," Houston Chronicle, April 16, 1996; EDF, personal communication, 4/22/97.
3. Because adequate data on the health risks of long-term exposure to lower-level manganese emissions was not available, Health Canada could not consider MMT a health risk under CEPA provisions. In addition, the fuel standards established in CEPA are not sufficiently broad to cover a ban on substances that may damage pollution control systems in cars, even if such damage leads to increased emissions. The Canadian Minister of the Environment reports that certain key provisions of CEPA are being rewritten, and may allow a future ban on the use of MMT (personal communication 4/19/97).
4. ICSID staff, personal communication 4/22/97.
5. U.S. Department of Treasury Staff, Briefing on the MAI and the Financial Services Agreement to the Senate Committee on Banking, Housing and Urban Affairs, 4/21/97.
6. Appleton & Associates, "First-Ever Lawsuit Against Canadian Government Using NAFTA Investor-State Process Brought," press release dated October 9, 1996.
For more information:
Michelle Sforza @ Preamble Collaborative: Phone: (202) 265-3263 - Email: msforza@rtk.net.
Mark Vallianatos @ Friends of the Earth: Phone: (202) 783-7400 x231 - Email: mvalli@aol.com
Preamble Center For Public Policy, 1737 21st Street, NW, Washington, DC., 20009
Phone: (202) 265-3263 - Fax: (202) 265-3647
5) Sustainability Investment News: Companies Using NAFTA to Undermine Legitimate Regulations
by Mark Thomsen
June 12, 2001
New report explains how the U.S., Canadian and Mexican governments' ability to regulate in the public interest is being eroded by NAFTA's Chapter 11.
SocialFunds.com -- Since it was implemented in 1994, the North American Free Trade Agreement (NAFTA) has been one of the focal points for arguments over the benefits and costs of free trade. A new paper published by Canada's Institution of International Sustainable Development (IISD) and the World Wildlife Fund-US (WWF-US) adds a cogent, clear voice to the discussion about one of the more controversial sections of NAFTA.
Free SRI Mutual Funds GuideThe title of the report is "Private Rights, Public Problems," and was written by Dr. Howard Mann. An international lawyer based in Ottawa, Canada, Dr. Mann is an Associate of IISD and an expert on the sustainable development implications of international investment and trade law.
The paper specifically examines Chapter 11 in NAFTA, which addresses the protection of foreign investors from Canada, Mexico and the U.S. when they invest in other NAFTA countries. The rights and obligations under Chapter 11 have become controversial because of the potential for foreign investors to lessen a government's ability to protect the public good.
"While the challenges to government actions are inevitably part of providing legal protection for foreign investors, the implementation of Chapter 11 to date reflects a disturbing lack of balance between the protection of private interests and the need to promote and protect the public welfare," write David Runnals, president of IISD, and Kathryn Fuller, president of WWF-US, in the preface. "The nature of the challenges brought so far has even surprised many of the agreement's authors."
Concerns over the stipulations of Chapter 11 first arose in the case of Ethyl Corp. (ticker: EY) versus Canada. Ethyl, which manufactures, blends and markets petroleum additives and lubricant additives, has a subsidiary in Canada called Ethyl Canada. According to the report, part of Ethyl Canada's business involves receiving MMT, a gasoline additive, from its parent company, mixing it with other agents and distributing it across Canada.
The Canadian Parliament passed a law in 1997 that banned both the import of MMT and the trade of MMT between provinces. The law did not explicitly ban MMT in Canada, but effectively ended the use of MMT since its only source, Ethyl Corp., was located in the U.S.
The report states that Canada banned the import of MMT for two reasons. One was a concern that the toxic properties of the manganese content had not yet been fully evaluated, and the other was a worry that MMT would cause newly required equipment on car exhaust systems to malfunction. The report also says all the North American and major international car manufacturers selling in Canada strongly supported the ban.
Ethyl claimed $250 million in damages from the law, saying the law breached NAFTA in three Chapter 11 articles. One was that by allowing domestic production, even if none existed, the law was treating foreign investors in a less favorable manner than domestic investors; two was that the import restriction would force Ethyl to produce MMT in Canada or use other Canadian products, and this was a type of performance requirement banned by Chapter 11; and three, Ethyl claimed that the MMT ban amounted to expropriation of its business in Canada, or "tantamount to" expropriation.
Hannon writes "This was the first time this expropriation argument had been made under an investment agreement to challenge an environmental law, and the first time the expansive use of the term measure "tantamount to" expropriation had been used in a legal proceeding."
Canada argued that the MMT law was not subject to Chapter 11, but in 1998 Chapter 11 arbitrators rejected Canada's arguments. Canada decided to settle; it paid Ethyl $13 million for costs and lost profits while the law was in place, withdrew the legislation Ethyl opposed, and gave a letter to Ethyl that said there was no scientific evidence showing MMT poses a health risk or affects car exhaust systems.
There have been a total of 17 cases since 1996, ten environmental and seven non-environmental. One of the environmental cases involves the Canadian company Methanex (MEOH) and the U.S. government regarding another gasoline additive, MTBE. Methanex is seeking approximately $1 billion in damages because of California's planned ban of MTBE. The case is ongoing.
Hannon raises the prospect that the trend in arbitration under Chapter 11 may encourage copycat arbitration under other trade agreements, and he notes that it may already be happening.
He offers some possible options to "fix" the situation, but stresses that there is no time for complacency. Hannon warns, "Absent a significant reversal of the trends seen in the first few cases, it is a genie that will be increasingly difficult to put back in the bottle."
© 2008 SRI World Group, Inc. All Rights Reserved.
What I did instead was spend the better part of my day researching a topic I feel strongly about (NAFTA, in particular Chapter 11), and writing it all up in a letter to my MP, MLA, Premier, the three senators who deal with BC, and the Prime Minister. All in all, once I typed in the original letter to the editor that finally prodded me into action, and included the four articles from the Internet that particularly addressed my concerns, (and including a page of addresses of whom I was sending it to, lol) I had 10 pages.
Tomorrow I'm going to finish printing them out, addressing the envelopes, and mailing them all out. And frankly, exercising my hard-defended right to complain to my government about a poorly-thought-out pact they have made, and to demand they take action, seems to me a better way to celebrate the lives lost or unutterably altered in order to ensure that I and my children have that right, than remembering to wear a poppy.
Thanks, guys. I really do appreciate what you've done for it. I'm aware of it every day. Thank you.
To:
Charlie Wyse, 2 - 487 Borland St, Williams Lake, BC, V2G 1R9
Cathy McLeod, House of Commons, Ottawa, Ontario, K1A 0A6
Gordon Campbell, PO Box 9041 Stn Prov Gov’t, Victoria, BC, V8W 9E1
Larry Campbell, The Senate of Canada, Parliament Buildings, Ottawa, Ontario, K1A 0A4
Mobina Jaffer, The Senate of Canada, Parliament Buildings, Ottawa, Ontario, K1A 0A4
Gerry St. Germain, The Senate of Canada, Parliament Buildings, Ottawa, Ontario, K1A 0A4
Stephen Harper, Office of the Prime Minister, 80 Wellington Street, Ottawa, Ontario, K1A 0A2
November 11, 2008
Re: NAFTA and Chapter 11 of NAFTA
Dear Sir,
Recently I came across, in my local newspaper, the letter-to-the-editor quoted below. Naturally, I was outraged by the idea that an American corporation, having had a chemical gasoline additive they manufactured banned in Canada because of the health risks, was able to then not only receive a settlement to cover damages to its reputation and lost income, but was also able to not only get the ruling forbidding the import of their additive overturned as discriminatory treatment under Chapter 11 of NAFTA, but also force the Canadian government to issue a public apology and a statement that directly contradicted its own findings by saying that there was no health nor environmental risk posed by this additive.
However, I am thoroughly aware that letters-to-the-editor are rarely actually checked to confirm their statements, so I decided, having finally had my fill of hearing such negative things about NAFTA, to do a little research myself.
What I discovered has appalled me. I include copies of the more salient points for your information.
To say that I am thoroughly disgusted and infuriated would be to drastically understate the extent of my outrage. How dare Canada be party to an agreement in which corporations, the very people who are trying to sell us any given product (let alone foreign corporations, who are under no obligations to the people of Canada), rather than our own scientists, are the ones who dictate whether or not any given product is safe? How dare Canada sign away her sovereign rights to decide for herself what is and what is not safe for use?
I have felt, ever since I first heard of NAFTA, that Canada was getting the short end of the stick. I was maddened beyond belief when Stephen Harper, upon his ascension to the office of the Prime Minister of Canada, instantly gave in to the Americans on the Softwood Lumber War-despite Canada having won every single appeal the US brought to the table, and despite the US having run out of allowable appeals! I am absolutely enraged that, while the Americans are able to freely spend several trillion dollars to bail out their own financial system, in order to help stabilize their economy, Canada is not allowed to do the same in order to help stabilize our own, forestry-based economy because, as I understand it, under NAFTA, such a thing is considered an industry subsidy, and expressly forbidden.
This entire agreement goes beyond unbelievable. That Canada would actually knowingly sign such a ridiculous agreement is outrageous. Please, as a voter, a citizen, a taxpayer, and a mother, I implore you to do everything you can to get Canada out of this horribly one-sided agreement. The few advantages it supposedly grants us are not worth the threats, both real, realized, and potential, to our health and our status as a sovereign nation.
Sincerely,
Mrs. [Kryss LaBryn (signed)]
1) Letter to the Editor, The 100 Mile House Advisor, Volume 6, Issue 42 (Nov. 5, 2008), Page 6: “Solutions for Ashcroft health care system”
2) CUPE Website (http://cupe.ca/privwatchsep08/Protection-of-Canada) Sept. 18, 2008: “Protect healthcare from NAFTA”
3) The Council of Canadians Website (http://www.canadians.org/trade/action/MP_trade.html) “Four Reasons Why NAFTA Is A Bad Deal For Canada”
4) The Global Policy Forum Website (http://www.globalpolicy.org/socecon/envronmt/ethyl.htm) “NAFTA & Environmental Laws: Ethyl Corp. v. Government of Canada: Chemical Firm Uses Trade Pact to Contest Environmental Law”
5) The Social Funds Website (http://www.socialfunds.com/news/article.cgi/597.html): “Sustainability Investment News: Companies Using NAFTA to Undermine Legitimate Regulations”
1) Letter to the Editor, The 100 Mile House (Nov. 5, 2008): “Solutions for Ashcroft health care system”
Dear Editor,
I recently suggested three possible funding solutions for Health Care problems, in Ashcroft and the province. One solution outlined one source of the problem was in fact our NAFTA agreement, specifically Chapter 11, and how it jeopardizes our Medicare Program in Canada.
In a recent article by Dana Gabriel published on GlobalResearch.ca she reveals that “In July, a group of 200 American investors led by an Arizona businessman filed papers alleging that, as a result of barriers put in place, they were unable to open more private healthcare clinics in the province of British Columbia. They are asking for $4 million in incurred expenditures as well as an additional $150 million in potential lost profits. This case could be settled by formal arbitration hearings under Chapter 11 and represents the first ever challenge to Canada’s health care system… NAFTA’s investment rules continue to put Canada’s health care system at risk of future privatization. Canadian government must further enforce the Canada Health Act to prevent more challenges. By way of example: “In 1006, Jean Chrétien’s Liberal government tabled a bill that banned imports of MMT, a gasoline additive. This was done as a result of studies that showed it posed a health risk. The U.S> Ethyl Corporation maker of MMT sued Canada, claiming discriminatory treatment under Chapter 11 of NAFTA… Ethyl received over $13 million, which covered damages to its reputation, lost profits, and legal fees it incurred. They forced the Canadian government to repeal the bill, banning MMT imports. The government also had to issue an apology and public statement saying that the additive posed no health or environmental risks.
How disturbing that a corporation practically dictated the terms of the settlement and overturned the laws of a supposedly sovereign nation.” There are other cases we lost as well and paid dearly for. You see folks it does not matter which political party is in power; NONE of them are safe-guarding Canada’s best interests.
Friends, if you wish to keep even a mere vestige of our Health Services in Ashcroft and this province you are going to have to shut the TV set off, get out a pen and paper and start writing to your M.P., M.L.A., and every other elected official including your Mayor and encourage all of your friends and relatives to do the same. Demand action by these accountable public servants who are supposed to be working for we citizens. Without prompt serious attention to this matter say goodbye to Medicare and the country. Remember that the foundation to the problem must be fixed in order to correct he problem. Band-aids do not fix a broken bone.
Further, do not accept the propaganda regarding the current so called financial crisis. It is a manufactured problem world wide created to justify several things including reduced gov’t funding for social programs and also to force the country to finally accept a new world currency (currently being pushed by the media for our gov’ts).
There is no faster way to dissolve a nation’s sovereignty than to remove its inherent right to create its’ own money supply. Act today or kiss your country good-bye.
G. McIntosh
Ashcroft, BC
2) Protect health care from NAFTA
September 18, 2008 09:34 AM
Ottawa, ON - Today, the Canadian Union of Public Employees (CUPE) called on Canada’s political leaders to include protection of not-for-profit health care in their platform to support families.
“Our health care system is under attack from creeping privatization, thanks to actions by some provincial governments and neglect by the federal government,” said Paul Moist, national president of CUPE. “Further, the federal government has been ignoring concerns that NAFTA investment rules put the Canadian health care system at risk. Now, these concerns are becoming substantiated in a law suit filed recently by an American investor.”
Both Liberal and Conservative governments have maintained that Canada’s medicare system is protected from American-style privatization under the North American Free Trade Agreement. But Arizona businessman Melvin J. Howard is about to test the boundaries.
Howard has filed legal papers that could lead to arbitration against the Canadian government under provisions of NAFTA that permit foreign investors to sue government for investment loss.
Howard and his financial backers claim to have lost $4 million in expenses and add an additional $150 million in lost profit after a failed attempt to invest in the BC health care system. The BC system has become increasingly open to foreign investment and privatization.
“For everyone who thought health care was safe from NAFTA, this is a reality check,” says Moist. “This election, we need a government that is willing to protect our public health system, not bury its head in the sand while our health care system is undermined by increased privatization. Protection of our health care system must be part of our leaders’ platforms on addressing the needs of our Canadian families.”
“The threat also exposes the serious risks that follow from the privatization schemes British Columbia and other provinces have allowed to creep into their health care systems,” says trade lawyer Stephen Shrybman. “NAFTA threatens to transform that modest flow, if it is not immediately abated, into a torrent.”
For further information:
Paul Moist, CUPE National President - 613-558-2873
Allison Gifford, CUPE Communications - 613-484-2571
3) The Council of Canadians : Tell your MP that Canada needs a better trade policy
Governments and big business have spent the last 15 years telling us that free trade is good for us. But Canadians know better. Despite promises that free trade deals would make Canadian companies more competitive, Canada has consistently lagged behind the United States in both productivity and competitiveness since the implementation of the Free Trade Agreement (FTA) in 1989 and the North American Free Trade Agreement (NAFTA) in 1995. The new jobs created in the free trade era have been largely part-time and poorly paid. Social inequality in our country has grown as a direct result of workers’ inability to earn a decent wage to support their families.
In the aftermath of the softwood lumber decision, even former supporters of free trade are arguing that NAFTA isn’t working for Canada. Some have called for forceful retaliation against the U.S., while others have suggested that we should get out of NAFTA - before it’s too late. The Council of Canadians believes that Canada needs a new trade policy - one that favours democracy, public services and the environment, over the “rights” of corporations to make a profit.
FOUR REASONS WHY NAFTA IS A BAD DEAL FOR CANADA:
NAFTA undermines democracy.
Foreign corporations use Chapter 11 to challenge environmental laws, municipal land-use controls, water protection measures, the activities of Canada Post, and even the decisions of judges and juries. While no Canadian citizen or corporation could bring forward these challenges, NAFTA grants corporations of member countries the right to challenge any federal rule or law that they perceive as a barrier to their ability to make a profit. The result is millions of tax dollars being spent to either fight or settle with these corporations.
NAFTA threatens health care and other public services.
The exemption for health care under NAFTA, which has largely kept U.S. for-profit health corporations out of Canada, applies only to a fully publicly funded system. Once privatized, the system must give “national treatment” rights to American private hospital chains. The NAFTA exemption only applies to medicare as it stood in 1989, and doesn’t provide protection for a possible expansion of medicare into new areas like homecare and pharmacare.
NAFTA strips Canada of control over our energy resources.
Canada now produces about 40 per cent more oil than it consumes, but has to rely heavily on imported oil from offshore. Thanks to NAFTA, Canada now exports 70 percent of the oil and 61 per cent of the natural gas we produce each year to the United States. NAFTA prevents us from selling our energy resources to Canadians at rates lower than we sell them in the U.S. And because of NAFTA’s proportional sharing clause, we can’t ever cut back on the amount of energy we produce and sell to the United States, even in times when our country runs short.
NAFTA could put our water up for sale.
Canadian water is defined as a “service” and an “investment” under NAFTA. The agreement’s so-called water exemption is inadequate. After British Columbia banned bulk exports of lake and river water, the California-based Sun Belt Corporation launched a Chapter 11 challenge, seeking $10 billion in damages. The case is still outstanding, and has profound implications for the future of Canada’s water.
Current trade policies serve as a platform for deeper integration with the U.S. Our business and political elites are pushing for deeper ties with the U.S., and would see Canada privatize health care, join common security projects, give up sovereignty over our natural resources and harmonize our food and health policies with lower U.S. standards.
NAFTA is a bad deal for Canada, working families, our environment and our sovereignty. We want a trade policy that protects our democracy, social services, natural resources and way of life.
4) NAFTA & Environmental Laws: Ethyl Corp. v. Government of Canada: Chemical Firm Uses Trade Pact to Contest Environmental Law
April, 1997
Ethyl Corporation’s $251 million lawsuit against a new Canadian environmental law is sure to set off alarm bells throughout the public interest world. The suit, brought under the terms of the North American Free Trade Agreement, demonstrates how present and future international economic pacts could pose a danger to environmental regulations and other safeguards.
In early April, the Canadian Parliament acted to ban the import and interprovincial transport of an Ethyl product -- the gasoline additive MMT -- which Canada considers to be a dangerous toxin. Ethyl (the company that invented leaded gasoline) responded on April 14 by filing a lawsuit against the Canadian government under NAFTA. Ethyl claims that the Canadian ban on MMT violates various provisions of NAFTA and seeks restitution of $251 million to cover losses resulting from the "expropriation" of both its MMT production plant and its "good reputation."
MMT is a manganese-based compound that is added to gasoline to enhance octane and reduce engine "knocking." Canadian legislators are concerned that the manganese in MMT emissions poses a significant public health risk. In addition, automobile manufacturers have long argued that MMT damages emissions diagnostics and control equipment in cars, thus increasing fuel emissions in general. Ethyl is the product’s only manufacturer.1
The Environmental Defense Fund (EDF), which tracks the use of MMT, reports that the additive is used only in Canada. The United States EPA has banned its use in the formulated gasoline, which includes approximately 1/3 of the U.S. gasoline market. An EDF survey of the remaining producers reports that none use the additive.2 California has imposed a total ban on MMT. Canadian legislators wanted to ban the use of MMT in order to protect the Canadian public. Because they could not do so under Canadian Environmental Protection Act (CEPA) provisions, they chose the best available alternative: banning MMT’s import and transport.3
NAFTA requires member countries to compensate investors when their property is "expropriated" or when governments take measures "tantamount to expropriation." Ethyl claims that the MMT ban constitutes such an expropriation. The company argues that the ban will reduce the value of Ethyl’s MMT manufacturing plant, hurt its future sales and harm its corporate reputation. The case will be an important test of how expropriation is to be defined in NAFTA and future agreements.
A key provision of NAFTA makes the lawsuit possible. Under NAFTA’s investment chapter, for the first time in a multilateral trade or investment agreement, corporations are granted "private legal standing" or the ability to sue governments directly and to seek monetary damages. This "investor-to-state" dispute resolution mechanism diverges from dispute resolution systems in previous international economic agreements in two ways: First, previous agreements allow only national governments to bring suits. Second, these agreements do not allow for monetary compensation. The most a government can do if it is successful in a suit is impose tarriffs on the violating nation.
This lawsuit is the third, and largest, under NAFTA’s investor-to-state dispute mechanism. According to an official at the International Centre for the Settlement of Investment Disputes (ICSID), the institution that arbitrates most of the world’s investment complaints, the $251 million Ethyl seeks is higher than any amount requested in an ICSID investor-to-state proceeding.4
The Ethyl suit raises a host of issues that should be of concern to policymakers particularly since the U.S. is negotiating the expansion of NAFTA as well as a new multilateral investment agreement (MAI) that would apply NAFTA-like standards worldwide. The Ethyl case could set a precedent where, under NAFTA and similar agreements, a government would have to compensate investors when it wishes to regulate them or their products for public health or environmental reasons. If Ethyl wins its case, a precedent will be set whereby the legal right of corporations to be compensated when public health regulations affect a company’s bottom line is given the same weight as the public’s right not to be harmed by industrial toxins. This could send the message to investors that seeking compensation from the public for the cost of complying with environmental regulations constitutes a legitimate business strategy. Thus, in pacts like NAFTA, groups opposed to strong environmental regulation may find an effective mechanism for advancing the radical "takings" agenda for which they have not been able to build public or legislative support.
Effective limitations on the frequency and impact of lawsuits are removed when investors are granted the right to sue national governments on their own behalf. When governments are the only entities that have legal standing to bring a case against a regulation or other law under an international agreement, political and diplomatic pressures reduce the likelihood that frivolous lawsuits will be initiated. The investor-to-state dispute resolution clause in NAFTA (and in the proposed MAI) removes this limitation, allowing corporations and individual investors to sue directly and to seek monetary compensation. The Ethyl suit is an example of this new dispute resolution mechanism in operation.
If claims like Ethyl’s are successful and proliferate, the costs to governments could be burdensome. Under investor-to-state dispute resolution, corporations can request compensation for actual and future earnings losses as well as for the cost of repairing their "tarnished images." Damage claims can therefore be very high, as in the Ethyl case. In addition, multiple investors can consolidate their suits, thereby multiplying a government’s potential liability.
If such cases were to become commonplace, governments would have to give due consideration to the potential fiscal costs before passing needed regulations. The threat of suits like Ethyl’s could be used to pressure lawmakers who are considering new regulations. Ethyl submitted an intent to file suit six months before the MMT ban was passed in the Canadian legislature. Ethyl hoped that the threat of a lawsuit would deter policymakers from passing the bill. While Ethyl failed in this instance, the ability of investors to use their private legal standing to credibly threaten major suits could lead to successful efforts in the future to intervene in the democratic decision-making process and alter the outcome of legislative debate.
Ethyl also claims that the legislative debate itself constituted an expropriation of its assets because public criticism of MMT damaged the company’s reputation. Thus, Ethyl is using NAFTA to file what is, in effect, a SLAPP-suit against the Canadian Parliament. Far from worrying about the implications of such actions, U.S. trade officials have argued that the ability of investors to use legal threats to influence legislative debates is a healthy innovation that will prevent governments from passing laws that violate international agreements.5
In cases like Ethyl’s, international panels, not domestic courts, will have ultimate legal authority. No Canadian court will rule on whether the MMT ban violated NAFTA. Under NAFTA, Ethyl can pursue its case before an international tribunal where the proceedings are conducted in secret, the records are not publicly accessible and the decision is legally binding. The panel will be comprised of one person chosen by Ethyl, one by the Canadian government, and the third jointly by the first two appointees. If it loses, the Canadian government will have no recourse to appeal in domestic courts. Claims that go to international arbitration are often expedited; lawyers for Ethyl predict that the case will be settled by the end of the year.
The Ethyl case suggests that critics of NAFTA and GATT may have been correct in arguing that these agreements could pose a threat to national sovereignty. The likelihood that NAFTA, and other agreements like it, could restrict the ability of democratically elected governments to legislate on such matters as public health and safety and environmental protection was downplayed by many advocates of the agreement. Yet the Ethyl case suggests that critics’ concerns were not misplaced. Indeed, as Ethyl’s attorneys recently argued: "[T]he potential for lawsuits under this [investor-to state dispute resolution] process is far-reaching since it could be used by more than 350 million individuals and corporations throughout the NAFTA countries."6 Under the proposed MAI, which will cover investors from 29 of the world’s industrial countries, the numbers would of course be higher.
Notes
1. While automobile manufacturers may be legitimately concerned with clean air standards, their primary opposition to MMT is that they must bear the costs of repairing the cars’ damaged pollution control systems.
2. Ivanovich, David. "Collision Course Slow Start for Gas Additive MMT’s Effect on Air, Cars Debated," Houston Chronicle, April 16, 1996; EDF, personal communication, 4/22/97.
3. Because adequate data on the health risks of long-term exposure to lower-level manganese emissions was not available, Health Canada could not consider MMT a health risk under CEPA provisions. In addition, the fuel standards established in CEPA are not sufficiently broad to cover a ban on substances that may damage pollution control systems in cars, even if such damage leads to increased emissions. The Canadian Minister of the Environment reports that certain key provisions of CEPA are being rewritten, and may allow a future ban on the use of MMT (personal communication 4/19/97).
4. ICSID staff, personal communication 4/22/97.
5. U.S. Department of Treasury Staff, Briefing on the MAI and the Financial Services Agreement to the Senate Committee on Banking, Housing and Urban Affairs, 4/21/97.
6. Appleton & Associates, "First-Ever Lawsuit Against Canadian Government Using NAFTA Investor-State Process Brought," press release dated October 9, 1996.
For more information:
Michelle Sforza @ Preamble Collaborative: Phone: (202) 265-3263 - Email: msforza@rtk.net.
Mark Vallianatos @ Friends of the Earth: Phone: (202) 783-7400 x231 - Email: mvalli@aol.com
Preamble Center For Public Policy, 1737 21st Street, NW, Washington, DC., 20009
Phone: (202) 265-3263 - Fax: (202) 265-3647
5) Sustainability Investment News: Companies Using NAFTA to Undermine Legitimate Regulations
by Mark Thomsen
June 12, 2001
New report explains how the U.S., Canadian and Mexican governments' ability to regulate in the public interest is being eroded by NAFTA's Chapter 11.
SocialFunds.com -- Since it was implemented in 1994, the North American Free Trade Agreement (NAFTA) has been one of the focal points for arguments over the benefits and costs of free trade. A new paper published by Canada's Institution of International Sustainable Development (IISD) and the World Wildlife Fund-US (WWF-US) adds a cogent, clear voice to the discussion about one of the more controversial sections of NAFTA.
Free SRI Mutual Funds GuideThe title of the report is "Private Rights, Public Problems," and was written by Dr. Howard Mann. An international lawyer based in Ottawa, Canada, Dr. Mann is an Associate of IISD and an expert on the sustainable development implications of international investment and trade law.
The paper specifically examines Chapter 11 in NAFTA, which addresses the protection of foreign investors from Canada, Mexico and the U.S. when they invest in other NAFTA countries. The rights and obligations under Chapter 11 have become controversial because of the potential for foreign investors to lessen a government's ability to protect the public good.
"While the challenges to government actions are inevitably part of providing legal protection for foreign investors, the implementation of Chapter 11 to date reflects a disturbing lack of balance between the protection of private interests and the need to promote and protect the public welfare," write David Runnals, president of IISD, and Kathryn Fuller, president of WWF-US, in the preface. "The nature of the challenges brought so far has even surprised many of the agreement's authors."
Concerns over the stipulations of Chapter 11 first arose in the case of Ethyl Corp. (ticker: EY) versus Canada. Ethyl, which manufactures, blends and markets petroleum additives and lubricant additives, has a subsidiary in Canada called Ethyl Canada. According to the report, part of Ethyl Canada's business involves receiving MMT, a gasoline additive, from its parent company, mixing it with other agents and distributing it across Canada.
The Canadian Parliament passed a law in 1997 that banned both the import of MMT and the trade of MMT between provinces. The law did not explicitly ban MMT in Canada, but effectively ended the use of MMT since its only source, Ethyl Corp., was located in the U.S.
The report states that Canada banned the import of MMT for two reasons. One was a concern that the toxic properties of the manganese content had not yet been fully evaluated, and the other was a worry that MMT would cause newly required equipment on car exhaust systems to malfunction. The report also says all the North American and major international car manufacturers selling in Canada strongly supported the ban.
Ethyl claimed $250 million in damages from the law, saying the law breached NAFTA in three Chapter 11 articles. One was that by allowing domestic production, even if none existed, the law was treating foreign investors in a less favorable manner than domestic investors; two was that the import restriction would force Ethyl to produce MMT in Canada or use other Canadian products, and this was a type of performance requirement banned by Chapter 11; and three, Ethyl claimed that the MMT ban amounted to expropriation of its business in Canada, or "tantamount to" expropriation.
Hannon writes "This was the first time this expropriation argument had been made under an investment agreement to challenge an environmental law, and the first time the expansive use of the term measure "tantamount to" expropriation had been used in a legal proceeding."
Canada argued that the MMT law was not subject to Chapter 11, but in 1998 Chapter 11 arbitrators rejected Canada's arguments. Canada decided to settle; it paid Ethyl $13 million for costs and lost profits while the law was in place, withdrew the legislation Ethyl opposed, and gave a letter to Ethyl that said there was no scientific evidence showing MMT poses a health risk or affects car exhaust systems.
There have been a total of 17 cases since 1996, ten environmental and seven non-environmental. One of the environmental cases involves the Canadian company Methanex (MEOH) and the U.S. government regarding another gasoline additive, MTBE. Methanex is seeking approximately $1 billion in damages because of California's planned ban of MTBE. The case is ongoing.
Hannon raises the prospect that the trend in arbitration under Chapter 11 may encourage copycat arbitration under other trade agreements, and he notes that it may already be happening.
He offers some possible options to "fix" the situation, but stresses that there is no time for complacency. Hannon warns, "Absent a significant reversal of the trends seen in the first few cases, it is a genie that will be increasingly difficult to put back in the bottle."
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