Groups urge Canada to defend itself in NAFTA ruling

Reuters 18jan01

OTTAWA -- Canada may yet appeal a recent decision by a North American free trade tribunal to fine it up to $20 million for banning exports of deadly PCB waste chemicals in the mid-1990s.

     ``It is a possibility, based on a complex set of rules,'' a trade department spokesman said after environmental groups Tuesday urged the government to appeal the NAFTA decision.

     The groups say the costly ruling sets a dangerous precedent by letting a secret trade tribunal interfere in a country's ability to regulate environmental wastes and policies.

     Canada lost to U.S. company S.D. Myers of Ohio in November under the controversial Chapter 11 of NAFTA which lets companies sue member countries to protect their investments.

     The tribunal ruled that Canada blocked the export of polychlorinated biphenyls to the U.S. for destruction to protect a domestic company able to perform the same task.

     ``The federal government has the option of seeking a review of that award and appealing to a Canadian court of superior jurisdiction to set it aside,'' Ottawa trade lawyer Steven Shrybman told a news conference.

     He said the Canadian Alliance of Trade and Environment, a coalition of citizen, labor and environmental groups, planned to ask a Prime Minister Jean Chretien to demand the ruling be appealed, possibly in the Supreme Court of Canada.

     ``The tribunal's award is wrong. It's wrong in law and it's a disaster in terms of public policy from an environmental point of view,'' he said.

     The groups fear private corporations could interfere in Canada's ability to control its abundant fresh water supply.

     Canadian Trade Minister Pierre Pettigrew had asked the U.S. and Mexico for a review of Chapter 11 following the decision.

     He said he may oppose investor-state provisions in future trade deals, such as the upcoming Free Trade Area of the Americas (FTAA) agreement.

     The trade department spokesman said the tribunal had yet to decide a final penalty.

     ``We're making a case that basically the amount they're asking for is unjustifiable,'' he said. ``Whether or not they'll get it is debatable. They might not get anything at all.''

     The decision to ban the PCB exports to the U.S. from 1995 to 1997, was made by then Liberal Environment Minister Sheila Copps. The U.S. government banned PCB imports in 1997.

     Shrybman said Canada would have to act quickly to appeal, having only three months after the initial decision to do so.