Ottawa Citizen

B.C. court ruling shows NAFTA favours business over environment: McDonough

OTTAWA (CP) - A decision by the B.C. Supreme court against Mexico proves a contentious NAFTA clause is a threat to the environment, NDP Leader Alexa McDonough said Friday. McDonough called Chapter 11 of NAFTA an "environmental hazard" after Mexico lost its appeal against Metalclad, a U.S. waste disposal firm.

"In case there was any doubt, this decision makes it clear," McDonough said.

"Chapter 11 says that profit is more important than the environment. It says that profit is more important than the health and safety of citizens."

On Thursday, the B.C. Supreme court upheld a NAFTA panel's finding that a decision by a Mexican state government to ban development of a toxic-waste disposal sited under an ecological decree amounted to expropriation.

Mexico must now pay most of a $16.9-million US arbitration award to Metalclad.

The municipality of Guadalcazar refused to issue a construction permit for Metalclad's project after a public outcry over tonnes of toxic waste left scattered over the dumpsite by Metalclad's predecessor.

The NAFTA tribunal ruled last August the decision to block construction of the waste disposal plant on a dump site Metalclad bought from a Mexican firm violated NAFTA's Chapter 11.

The section contains provisions for equal treatment of investors from NAFTA's three signatory countries and protection against unfair expropriation.

Canada had intervened in the appeal, concerned that the ruling read obligations into NAFTA that were never intended when the treaty was signed.

Prime Minister Jean Chretien has said Chapter 11 has worked "remarkably well."

-- Rachel Gibson (rgibson@hotmail.com), May 05, 2001