Tuesday, 31 March 2015
Canada May Have to Pay Hundreds of Millions of Dollars After Losing a Case Under NAFTA.
by Larry Powell
Will it be even harder for us to protect our own environment now?
It all began about a decade ago when “Bilcon Inc.,” a US company controlled by the Clayton family of Delaware, applied to expand a basalt mine and marine port in Digby County, Nova Scotia. (Basalt is a common rock used in road construction, concrete and other products.)
But the site, which would cover over 150 hectares , happened to be in a key breeding area for vulnerable marine animals, including an endangered whale species. After the federal Department of Fisheries and Oceans expressed concern that the rock-blasting associated with the operation might adversely affect the environment, a Joint Review Panel (JRP) was appointed to look into it. The company labelled this development as "rare, costly and time-consuming," but it went ahead anyway.
The Panel conducted lengthy public hearings, calling a host of witnesses. Many expressed concern for tourism, air and water quality, the fishery and generally the quality of life in the area if the project went ahead. In the end, the JRP recommended against it.
In 2008, Bilcon then sued Canada under terms of the now-familiar “Chapter 11” of the NAFTA agreement, seeking $300 million damages. The investors argued before an international NAFTA tribunal, set up to deal with such disputes that, given the encouragement Nova Scotia had been giving them to invest, and the very nature of the agreement itself, rejection of their plan was both discriminatory and unfair.
In March, the tribunal ruled in favour of Bilcon. It means Canada will have to pay up. While the family is demanding $300 million, the tribunal will decide in a future ruling what that amount will be.
But one member of the tribunal, Prof. Donald McRae of Canada, disagreed with the majority ruling. In a written conclusion of his own, he issues a note of caution about the downsides of the whole process.
"Once again, a chill will be imposed on environmental review panels which will be concerned not to give too much weight to socio-economic considerations or other considerations of the human environment in case the result is a claim for damages under NAFTA Chapter 11. In this respect, the decision of the majority will be seen as a remarkable step backwards in environmental protection and a significant intrusion into domestic jurisdiction. If the majority view in this case is to be accepted, then the proper application of Canadian law by an environmental review panel will be in the hands of a NAFTA tribunal, importing a damages remedy that is not available under Canadian law."
It is not immediately known when a final decision on the amount of damages, will be determined.
Please also read: Free Trade; Pathway to Prosperity or Back Road to Corporatism?