The Vancouver Sun
February 2, 2001
Ottawa urged to intervene in hazardous waste dispute
Vancouver council worries that NAFTA undermines local governments
By Patricia Bailey
Consider this possibility: An American company will begin dumping
hazardous waste near Burnaby Mountain, disregarding local environmental
regulations and public opposition.
This frightening scenario is already playing out in Mexico and could
happen in Vancouver under the North American Free Trade Agreement, warns
Vancouver city councillor Fred Bass.
Bass wants Ottawa to intervene in a trade dispute between Mexico and a
U.S. company to be heard in B.C. Supreme Court on Feb. 19.
This week Bass moved a resolution -- unanimously passed by Vancouver
council -- asking Ottawa to intervene as a NAFTA partner to defend the
rights of local government in the case, which pits an American hazardous
waste treatment company, Metalclad Corp., against Mexican authorities.
The case marks the first time a NAFTA trade dispute will be settled in
public court; normally they are worked out behind closed doors.
Last September, a NAFTA tribunal ruled that Mexican authorities must
pay Metalclad Corp. $16.7 million in compensation after the Mexican town of
Guadalcazar refused to grant the company a permit for a toxic waste dump.
Mexican authorities said the proposed landfill site was opposed by
local residents because it was in an environmentally sensitive area.
³The public opposed the project [in Mexico],² said the incredulous
councillor. ³Why should we bother electing municipal and provincial
governments if trade agreements have all that power?²
Mexico is appealing the tribunal¹s decision and the Mexican government
and Metalclad Corp. have selected B.C. Supreme Court as neutral ground.
Vancouver city council fears other Canadian municipalities may face
similar demands by foreign corporations under NAFTA.
The Vancouver city council motion asks the Canadian government to
intervene in the case to ensure that foreign corporations can¹t skirt local
regulations -- particularly those that protect the environment and the
public -- just because Canada is a NAFTA signatory.
³It¹s an extraordinary case because it will examine whether these
international trade agreements should override local regulations,² explained
Harriet Permut, a senior policy analyst with the Union of B.C.
Municipalities.
The Canadian Union of Public Employees, the nation¹s largest union,
had applied to the court for intervenor status in the case because of its
implications for environmental protection and the public service, but was
denied standing Jan. 31.
The NAFTA tribunal ordered Mexican authorities to compensate Metalclad
Corp. under Chapter 11 of the international trade agreement. Chapter 11 is a
set of investment protection rules designed to discourage governments from
destroying the rights and property of foreign firms.
Canadian and American officials have long complained that the current
wording thwarts the ability of governments to develop and enforce
environmental or social standards.
It was under Chapter 11 that the Canadian government was forced to
back away from legislation attempting to ban the controversial fuel additive
MMT and to compensate its maker, Ethyl Corp. in 1998.
The outcome of the case could govern a municipality¹s ability to
control everything from zoning to pollution, said municipal lawyer Donald
Lidstone. ³The threat is that Vancouver and other municipalities might have
to make decisions in compliance with international treaties rather than in
the interests of their citizens.²
