Environmentalists in battle to be heard in pesticide case
By Luke Eric Peterson
Mon., April 27, 2009timer3 min. read
Look out, Ontario.
Dow Chemicals has filed a claim under the North American Free Trade Agreement seeking compensation for a Quebec ban on lawn pesticides. Dow says that the ban amounts to an unfair "expropriation" of the company's Quebec pesticide business.
Although the NAFTA claim is focused on the Quebec ban, don't be surprised if Ontario comes into the sightlines now that a similar province-wide ban came into effect last week.
The ramifications of this NAFTA dispute have spurred environmental groups to mobilize for battle. A hint of the coming fireworks could be glimpsed on Parliament Hill late last month.
In hearings of the Standing Committee on International Trade, environmental groups signaled their plans to intervene in any forthcoming NAFTA arbitration proceeding.
These groups insist that governments should be permitted to act on a precautionary basis to shield vulnerable groups such as children – even when the scientific evidence is uncertain as to the long-term health impacts of certain substances.
They plan to present their own views to the arbitration panel that will hear Dow's case.
However, the groups complain that the NAFTA Chapter 11 arbitration process is less than welcoming when it comes to hearing from concerned citizens and other interests.
In testimony to Parliament last month, environmental advocates lamented that NAFTA – unlike more recent trade pacts – permits foreign companies to sue a NAFTA government behind closed doors.
Will Amos, an Ottawa-based lawyer representing the David Suzuki Foundation and the Quebec group Equiterre, says that his clients can submit written arguments to a NAFTA arbitration panel, but they may be blocked from showing up and watching, or participating in these high-stakes arbitration proceedings.
"There is no guarantee that the investor won't request confidential proceedings, which would further limit our ability to understand what case they're bringing, and there will be no opportunity for us to make oral representations before the tribunal," Amos says.
"This is totally unlike the Supreme Court of Canada," he adds.
Indeed, it's unfortunate that NAFTA disputes can be arbitrated in private – unlike domestic court hearings
Otherwise, members of Canada's Supreme Court might benefit from sitting in on these arbitration hearings, and gaining a better appreciation of this NAFTA process.
If permitted into the hearing room, the justices might be taken aback by the extent to which NAFTA tribunals can now review the actions of governments.
In fact, one of the things that has incensed many members of the environmental community – and which might bemuse members of the Supreme Court – is that pesticide bans in other parts of Canada have already been upheld by the Supreme Court of Canada.
In 2005, the court dismissed an effort by a pesticide industry association to challenge a ban introduced by the municipality of Toronto.
Environmentalists assumed that this ruling affirmed the right of governments to act proactively so as to minimize potential health risks.
However, it now appears that the Supreme Court was merely engaged in a dress rehearsal.
Sure, pesticide bans in different parts of Canada have been declared constitutional by the highest court in the land, but in the 21st century, constitutions are not the only law of the land.
Rather, it will fall to three arbitrators – one appointed by Dow, one by Canada, and the third by mutual assent – to determine whether our North American constitution, the NAFTA, sanctions the actions of the Quebec government.
The Dow arbitration promises to be of seminal importance.
Dow protests that Quebec lawmakers failed to take heed of several risk assessments, including one by Canada's federal government, which showed that the pesticide ingredient 2,4-D "does not entail an unacceptable risk of harm to human health or the environment."
Of course, others – including some governments – have questioned whether risk assessments should be the final word on such matters.
Environmental and medical groups like the Canadian Cancer Society have long argued that no amount of risk is worth taking when it comes to "unnecessary" chemicals, such as lawn pesticides, which are used for purely cosmetic purposes.
However, where governments wish to drive certain risks closer to zero, it will fall to a panel of NAFTA arbitrators to decide who shall pay the price for doing so: the chemicals industry or the Canadian taxpayer.
Luke Eric Peterson is editor of Investment Arbitration Reporter, an online news service reporting on NAFTA-style investor-state arbitrations (www.iareporter.com).
Quebec, Mexico