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NAFTA ruling goes against Ottawa
by By Keith McArthur
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Ottawa could be forced to pay up to $50-million (U.S.) in compensation
to an Ohio-based company after a NAFTA tribunal ruled that it had been
damaged by a ban on exports from Canada of polychlorinated biphenyls
(PCBs).
S.D. Myers Inc., which treats PCBs, sued Ottawa under
Chapter 11 of the North American free-trade agreement regulations for
wrecking its Canadian business through the ban.
The NAFTA
tribunal has yet to award damages in the case. Canada will argue that
S.D. Myers did not suffer as a result of the export ban, government
officials said yesterday.
But S.D. Myers's lawyer Barry Appleton said the damages could be in the range of $40-million to $50-million.
"I
don't think this is a good day up in Ottawa," he said. "This is a good
day for consumers because consumers were forced to pay two to five times
more to destroy their PCBs."
International Trade Minister Pierre
Pettigrew said the government is disappointed "with certain aspects of
the tribunal's findings."
"It is important to remember, however,
that nothing in this decision prejudices Canada's right to protect the
environment," the Minister said through a spokesman.
But the Sierra Club, an international environmental group, is worried about the environmental implications of the NAFTA ruling.
Sierra
Club trade specialist Christine Elwell said the ruling removes teeth
from the 1989 Basel Convention -- a treaty Canada signed - that says
each country should deal with its own hazardous waste. She worries about
the implications of NAFTA rulings on other environmental treaties.
"It's
a devastating blow not only for a country's domestic ability to set its
own standards, but also to the Basel Convention," she said.
The
NAFTA ruling relates to November, 1995, when Sheila Copps, then
environment minister, banned the export of Canadian PCB waste. Although
the ban was lifted in February, 1997, it allowed Canadian firms to
control the market for 15 months, and kept cheaper U.S. alternatives out
of the market.
The U.S. government closed its borders to PCBs in
August, 1997. S.D. Myers is trying to persuade Washington to open the
border, but in the meantime is using NAFTA in an effort to recoup the
lost Canadian business opportunities due to the 1995 ban.
"While
Canadian consumers supported our company, the Canadian government took
unfair actions to hurt us only because we were American," said Dana
Myers, president of S.D. Myers. "That's not fair and we are pleased that
the NAFTA tribunal has come to that conclusion."
The tribunal ruled that Canada treated U.S. investors less favourably than its own.
One member of the panel suggested that Ottawa acted to protect Canadian companies, and not for environmental reasons.
University
of Manitoba law professor Bryan Schwartz said Ms. Copps' "protectionist
intent . . . was reflected in decision-making at every stage of that
led to the ban."
He said government officials believed that
shipping PCBs to the United States would have been better for the
environment because it would have helped expedite the cleanup of the
harmful chemicals.
Only a handful of decisions have been rendered
under Chapter 11, which allows corporations to sue foreign NAFTA
nations if they believe their assets have been hurt by government
measures.
In 1997, Virginia-based Ethyl Corp. challenged Canada's
ban on MMT, a gas additive produced only by the company. Ottawa revoked
the ban and paid Ethyl about $19-million (Canadian) before a NAFTA
panel of arbitrators could rule on the case.
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