TransCanada’s recent suit against the United States because the government chose to protect water and the environment by rejecting the Keystone XL pipeline
TransCanada to launch NAFTA claim over Keystone rejection
TransCanada Corp. plans to launch a North American free-trade agreement claim seeking more than $15-billion (U.S.) in damages in response to the U.S. government’s decision to deny a permit for the controversial Keystone XL pipeline.
As Canadians, we have been the targets of ISDS.
Canada is the most-sued country under the North American Free Trade Agreement and a majority of the disputes involve investors challenging the country’s environmental laws, according to a new study.
The investor-state dispute settlement mechanism contained in NAFTA’s chapter 11 grants investors the right to sue foreign governments without first pursuing legal action in the country’s court systems, in order to protect foreign investors from discrimination. Drafters of the 1994 treaty included the provision to protect U.S. and Canadian investors against corruption in Mexican courts.
Canada has lost or settled six claims paying a total of $170 million in damages, while Mexico has lost five cases and paid out $204 million. The U.S.,meanwhile, has won 11 cases and has never lost a NAFTA investor-state case.
Case: Ethyl Corp. (1997)
Amount awarded: US$13 million, out-of-court settlement.
What happened: The U.S. chemical company challenged a Canada-wide ban on import and trade of the gasoline additive MMT, a suspected neurotoxin. Following a preliminary judgement against Canada, the government repealed the ban, issued an apology and paid a settlement.
Amount awarded: US$13 million, out-of-court settlement.
What happened: The U.S. chemical company challenged a Canada-wide ban on import and trade of the gasoline additive MMT, a suspected neurotoxin. Following a preliminary judgement against Canada, the government repealed the ban, issued an apology and paid a settlement.
2. Case: S.D. Meyers (1998)
Amount awarded: CDN$6.05 million, plus interest and compensation.
What happened: The U.S. waste disposal firm challenged a temporary Canadian ban on the export of toxic PCB wastes, something the country was obliged to do under an international environmental treaty. The tribunal ruled that Canada violated standards of treatment under NAFTA.
Amount awarded: CDN$6.05 million, plus interest and compensation.
What happened: The U.S. waste disposal firm challenged a temporary Canadian ban on the export of toxic PCB wastes, something the country was obliged to do under an international environmental treaty. The tribunal ruled that Canada violated standards of treatment under NAFTA.
3.Pope and Talbot (1998)
Amount awarded: CDN$870,000.
What happened: The U.S. lumber company challenged Canada’s lumber export rules implemented under the Canada-U.S. softwood lumber agreement. The tribunal ruled Canada violated NAFTA’s minimum standards of treatment.
Amount awarded: CDN$870,000.
What happened: The U.S. lumber company challenged Canada’s lumber export rules implemented under the Canada-U.S. softwood lumber agreement. The tribunal ruled Canada violated NAFTA’s minimum standards of treatment.
4. Mobil Investments/Murphy Oil (2007)
Amount awarded: Not yet determined, but damages continue to accrue as long as violating guideline in effect.
What happened: The oil investors argued that Canada’s guidelines requiring energy companies to invest in research and development in Newfoundland and Labrador are inconsistent with NAFTA rules. The tribunal ruled in favour of the investors and Canada is liable to pay damages.
Amount awarded: Not yet determined, but damages continue to accrue as long as violating guideline in effect.
What happened: The oil investors argued that Canada’s guidelines requiring energy companies to invest in research and development in Newfoundland and Labrador are inconsistent with NAFTA rules. The tribunal ruled in favour of the investors and Canada is liable to pay damages.
5. AbitibiBowater (2009)
Amount awarded: CDN$130 million in settlement — the largest NAFTA-related settlement to date.
What happened: The pulp and paper company closed its last mill in Newfoundland and Labrador in 2008 and the provincial government enacted legislation to return its timber and water rights to the Crown and expropriate some of its lands and assets associated with water and hydroelectric rights. Abitibi was to be paid fair market value for the assets.The company launched a NAFTA claim and the government decided to settle without going to court.
6. St. Marys (2011)
Amount awarded: $15 million.
What happened: The company alleges its Canadian subsidiary was the victim of political interference when it tried to open a quarry near Hamilton, Ont., after residents grew concerned about the groundwater. The provincial government issued a zoning order preventing the site from being converted into a quarry and the company claimed that was unfair and discriminatory. The parties reached a settlement in 2013 that saw the company withdraw the claim in exchange for compensation from the Ontario government.
Amount awarded: CDN$130 million in settlement — the largest NAFTA-related settlement to date.
What happened: The pulp and paper company closed its last mill in Newfoundland and Labrador in 2008 and the provincial government enacted legislation to return its timber and water rights to the Crown and expropriate some of its lands and assets associated with water and hydroelectric rights. Abitibi was to be paid fair market value for the assets.The company launched a NAFTA claim and the government decided to settle without going to court.
6. St. Marys (2011)
Amount awarded: $15 million.
What happened: The company alleges its Canadian subsidiary was the victim of political interference when it tried to open a quarry near Hamilton, Ont., after residents grew concerned about the groundwater. The provincial government issued a zoning order preventing the site from being converted into a quarry and the company claimed that was unfair and discriminatory. The parties reached a settlement in 2013 that saw the company withdraw the claim in exchange for compensation from the Ontario government.
This can be a real problem for First Nations who want to protect their land for current and future generations.
It’s not just the land and water but also the fishing economy at stake for future generations.
In this way, the TPP gives multinational corporations more power and grassroots land-defenders less. It takes power away from states and puts pressure on them to side with resource-development corporations, rather than land defenders, for fear of being sued.
Keystone ISDS lawsuit highlights legal risks of EU trade deals
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