NAFTA Chapter 11 Investor-State Cases
NAFTA Chapter 11 Investor-State CasesLessons for theCentral America Free Trade AgreementFebruary 2005
2005 by Public Citizens Global Trade Watch. All rights reserved. No part of this document may bereproduced or utilized in any form or by any means, electronic or mechanical, including photography,recording, or by information exchange and retrieval systems, without written permission from the authors.Public Citizen Publication Number: E9014Public Citizen is a nonprofit membership organization in Washington, D.C., dedicated to advancingconsumer rights through lobbying, litigation, research, publications and information services. Since itsfounding by Ralph Nader in 1971, Public Citizen has fought for consumer rights in the marketplace, forsafe and secure health care, for fair trade, for clean and safe energy sources, and for corporate andgovernment accountability. Visit our web page at http://www.citizen.org.Acknowledgments: This report was written by Mary Bottari and Lori Wallach. Additional writing andinvaluable research assistance was provided by Runako Kumbula, David Waskow (Friends of the Earth),Josh Kolsky, Joshua Chanin, and Heather Goss. Other assistance was provided by Juan Marchini, CarlosLa Hoz, Todd Tucker, Libby Sinback, Paul Levy, Alyssa Prorok, Susan Ellsworth, John Gibler, DavidEdeli, Angela Bradbery, Timi Gerson, Peter Lurie, Patricial Lovera, Tony Corbo and Sara Johnson.Special thanks to Chris Slevin at Public Citizen, Matthew Porterfield and Robert Stumberg at GeorgetownUniversity, Marcos Orellana at Center for International Environmental Law, Luke Peterson from theInternational Institute of Sustainable Development, and Martin Wagner at Earthjustice. This report buildson an earlier publication, by Bottari, Wallach and Waskow “NAFTA Chapter 11 Investor-to-State Cases:Bankrupting Democracy” (Public Citizen, 2001).Additional copies of this document are available from:Public Citizen’s Global Trade Watch215 Pennsylvania Ave SE, Washington, DC 20003(202) 546-4996Other Titles By Public Citizen’s Global Trade Watch:Whose Trade Organization?: A Comprehensive Guide to the WTO (New Press, 2004)Down on the Farm: NAFTA’s Seven-Years War on Farmers and Ranchers in the U.S., Canada andMexico (June 2001)NAFTA Chapter 11 Investor-to-State Cases: Bankrupting Democracy (2001)The Coming NAFTA Crash (February 2001)Purchasing Power (October 2000)The Clinton Record on Trade-Vote Deal Making: High Infidelity (May, 2000)Whose Trade Organization?: Corporate Globalization and the Erosion of Democracy (1999)The WTO: Five Years of Reasons to Resist Corporate Globalization (1999)A Citizen’s Guide to the WTO: Everything You Need to Know to Fight for Fair Trade (1999)Deals for NAFTA Votes II: Bait and Switch (1997)Deals for NAFTA Votes: Trick or Treat? (1997)NAFTA’s Broken Promises: Fast Track to Unsafe Food (1997)NAFTA’s Broken Promises: Failure to Create U.S. Jobs (1997)NAFTA’s Broken Promises: The Border Betrayed (1996)NAFTA’s Broken Promises: Job Creation (1995)Trading Away U.S. Food Safety (1993)NAFTA’s Bizarre Bazaar (1993)
NAFTA Chapter 11 Investor-State CasesTABLE OF CONTENTSTABLE OF NAFTA CHAPTER 11 INVESTOR-STATE CASES & CLAIMS . iEXECUTIVE SUMMARY . viI. BACKGROUND . 1Investors and Their New NAFTA Rights and Privileges . 2NAFTA Corporate Dispute Resolution: Private Enforcement of a Public Treaty . 4As Criticism of Chapter 11 Builds, NAFTA Trade Ministers Issue a “Clarification” . 6New Investment Rules in CAFTA/ FTAs Fail to Meet Congressionally Required “NoGreater Rights” Standard . 8II. MAJOR NAFTA CHAPTER 11 CASES. 21Ethyl v. Canada – MMT Gasoline Additive . 21Loewen v. United States – Funeral Home Conglomerate . 23Metalclad v. Mexico Toxic Waste Facility . 27Methanex v. United States – MTBE Gasoline Additive. 31Gami, Corn Products, ADF & Staley v. Mexico – Sweeteners Cases . 35Pope & Talbot v. Canada – Softwood Lumber . 39S.D. Myers v. Canada – PCB Treatment. 42UPS v. Canada – Federal Postal Services. 45III. NEW NAFTA CLAIMS OF PUBLIC INTEREST . 48Canadian Cattlemen for Fair Trade v. United States – Mad Cow Disease. 48Glamis Gold v. United States – Mining & Culture. 52Grand River v. United States – U.S. Tobacco Settlements . 55Thunderbird Gaming v. Mexico – Gambling . 57IV. OTHER NAFTA CHAPTER 11 ARBITRATIONS . 59
Public Citizen’s Global Trade Watch, February 2005ADF Group v. United States – Buy America Contract . 59Azinian v. Mexico – Municipal Waste Disposal Contract . 60Crompton v. Canada – Pesticide Phase-Out. 61Fireman’s Fund Insurance Company v. Mexico – Bank Capitalization. 62Karpa (Feldman) v. Mexico – Cigarette Excise Taxes. 62Kenex v. United States – Drug Enforcement Policy . 63Mondev v. United States – City Development Dispute . 64Softwood Lumber Firms v. United States Antidumping & Countervailing Duties. 65Waste Management v. Mexico – Municipal Waste Disposal Contract. 66V. OTHER NAFTA CHAPTER 11 CLAIMS . 68Adams, et. al. v. Mexico – Land Dispute . 68Amtrade International v. Mexico – Oil Contracts . 68Bayview Irrigation District, et. al. v. Mexico – Water Rights. 68Scott Ashton-Blair v. Mexico – Land Dispute . 69James Russel Baird v. United States – Nuclear Waste Disposal Patent. 69Calmark Commercial Development v. Mexico – Land Dispute. 70Connolly v. Canada – Land Dispute . 70Robert J. Frank v. Mexico – Land Dispute . 71Francis Kenneth Haas v. Mexico – Investment Partnership Dispute . 71Lomas Santa Fe Investments v. Mexico – Land Dispute. 71Ontario Limited v. United States – RICO Investigation. 71Signa v. Canada – CIPRO Antibiotic Patent. 72Sun Belt v. Canada Bulk Water Shipments . 72Trammel Crow Company v. Canada – Federal Postal Contract. 73VI. THREATENED NAFTA CHAPTER 11 CASES. 74CONCLUSION AND RECOMMENDATIONS . 76ENDNOTES . 86
NAFTA Chapter 11 Investor-State CasesTABLE OF NAFTA CHAPTER 11 INVESTOR-STATE CASES & CLAIMSFebruary 2005Key**Indicates date Notice of Intent to File a Claim was filed, the first step in the NAFTA investor-state process when an investor notifies agovernment that it intends to bring a NAFTA Chapter 11 suit against that government.*Indicates date Notice of Arbitration filed, the second step in the NAFTA investor-state process when investor notifies an arbitration body that itis ready to commence arbitration under NAFTA Chapter 11.The two venues for the adjudication of NAFTA Chapter 11 disputes are the World Bank’s International Center for the Settlement of InvestmentDisputes (ICSID) and the United Nation’s Commission on International Trade Law (UNCITRAL).Corporationor InvestorVenueDamagesSought(U.S. )Status ofCaseIssueCases & Claims Against the United StatesLoewenOct. 30, 1998*ICSID 725 millionDismissedCanadian funeral conglomerate challenged large Mississippi state courtdamage award granted by a jury in a contract dispute suit by a local companyclaiming Loewen engaged in anti-competitive, predatory business practices.June 2003 – Claim dismissed on procedural basis. Tribunal found thatLoewen’s reorganization as a U.S. corporation under U.S. bankruptcy lawdestroyed the firm’s ability to bring the NAFTA claim as a foreign investor.MondevSep. 1, 1999*ICSID 50 millionDismissedCanadian real estate developer challenged City of Boston’s actions indevelopment contract dispute and adverse state supreme court ruling thatdenied the firm compensation on the grounds that city actions were shieldedby principle of sovereign immunity.October 2002 – Claim dismissed on procedural grounds. Tribunal found thatthe majority of Mondev’s claims, including of expropriation, were time-barredmeaning that the dispute on which the claim was based predated NAFTA andthat court rulings were well founded in state law.MethanexDec. 3, 1999*UNCITRAL 970 millionPendingCanadian corporation which produces methanol, a component chemical ofgasoline additive MTBE, challenges California phase-out of MTBE, which iscontaminating drinking water throughout the state.August 2002 – Jurisdictional ruling indicates that because Methanex onlyproduces a component ingredient of MTBE, methanol, not the actual product,company is to “distant” from the MTBE ban to qualify as a firm harmed by it,suggesting that certain MTBE producers may be qualified to bring similarNAFTA suits. Methanex allowed to resubmit claim to demonstrate how theMTBE ban was specifically directed toward methanol producers instead ofmerely affecting them. U.S. government has spent 3 million on legaldefense to date on case, which NAFTA supporters are eager to havedismissed permanently on technical grounds for fear of political ramificationsif Methanex wins.ADF GroupJul. 19, 2000*ICSID 90 millionDismissedCanadian steel contractor challenged U.S. Buy America provision in Virginiahighway construction contract.January 2003 – Claim dismissed on procedural grounds. Tribunal found thatthe basis of the claim constituted “government procurement” and thereforefell under the procurement provisions of NAFTA, Chapter 10, not Chapter 11.i
Public Citizen’s Global Trade Watch, February 2005James BairdMar. 15, 2002**Arbitrationhas not yetcommenced 13 billionCanadian investor challenged U.S. policy of disposing nuclear waste atYucca Mountain, Nevada site. Investor claims to have patents for alternativewaste disposal method and location.DomanMay 1, 2002**Arbitrationhas not yetcommenced 513 millionCanadian company seeks damages over May 2002 application by the U.S. ofanti-dumping and countervailing duties on Canadian softwood lumber.CanforJul. 9, 2002*UNCITRAL 250 millionPendingCanadian company seeks damages over May 2002 application by the U.S. ofanti-dumping and countervailing duties on Canadian softwood lumber.KenexUNCITRAL 20 millionPendingCanadian hemp production company challenged U.S. Drug EnforcementAgency regulations criminalizing importation of hemp foods. In 2004 the firmwon a U.S. federal court case charging that the agency overstepped itsstatutory authority when issuing the rules. Status of NAFTA case unclear.Ontario LimitedSep. 9, 2002**Arbitrationhas not yetcommenced 38 millionTembecUNCITRAL 200 millionPendingUNCITRAL 50 millionPendingAlbert J. ConnollyFeb. 19, 2004**Arbitrationhas not yetcommencedValue ofexpropriatedpropertyGrand RiverMar. 10, 2004*UNCITRAL 340 millionPendingSmall Canadian tobacco company seeks damages in claim challenging U.S.tobacco settlements due to the requirement that tobacco companiescontribute to state escrow funds set up by state law.Terminal ForestProductsMar. 30, 2004*UNCITRAL 90 millionPendingCanadian company seeks damages over May 2002 application by the U.S. ofanti-dumping and countervailing duties on Canadian softwood lumber.Canadian Cattlemenfor Fair TradeAug. 12, 2004**Arbitrationhas not yetcommenced 300 millionAug. 2, 2002*Canadian company seeks return of property after its bingo halls and financialrecords were seized during an investigation for RICO violations in Florida.Dec. 3, 2003*Glamis GoldDec. 9, 2003*Canadian company seeks damages over May 2002 application by the U.S. ofanti-dumping and countervailing duties on Canadian softwood lumber.Canadian company seeks compensation for California regulation requiringbackfilling and restoration of open pit mines that would damage NativeAmerican sacred sites.U.S. investor claims real estate was expropriated by Canadian government tobe used as a park.Group of Canadian cattlemen and feedlot owners seeks compensation forlosses incurred when the U.S. halted imports of live Canadian cattle after thediscovery of a case of BSE (mad cow disease) in Canada in May 2003.Cases & Claims Against CanadaSignaMar. 4, 1996**Arbitrationnevercommenced 40 millionEthylApr. 14, 1997*UNCITRAL 250 millionMexican pharmaceutical manufacturer filed challenge of Canadian patent lawwhich blocked the manufacture of a generic equivalent to CIPRO, the multispectrum antibiotic. Little is known with regard to the disposition of this case.Settled;Ethyl wins, 13 millionpaidU.S. chemical company challenged Canadian environmental regulation ofgasoline additive MMT.July 1998 – Canada loses NAFTA jurisdictional ruling, reverses ban, pays 13 million in damages and legal fees to Ethyl.ii
NAFTA Chapter 11 Investor-State CasesS.D. MyersOct. 30, 1998*UNCITRAL 20 millionS.D. Myerswins, 4.8 millionpaidU.S. waste treatment company challenged Canadian ban of PCB exports.Ban was compliant with multilateral environmental treaty on toxic waste tradeNovember 2000 – NAFTA tribunal dismisses S.D. Myers claim ofexpropriation, but upholds claims of discrimination and equates this violationwith a violation of the minimum standard of treatment required byinternational law. Panel also states that “market share” could constitute aNAFTA protected investment.Pope & TalbotMar. 25, 1999*UNCITRAL 381 millionP&T wins, 582,000paidU.S. timber company challenged Canada’s implementation of 1996 U.S.Canada Softwood Lumber Agreement.April 2001 – NAFTA tribunal dismissed claims of expropriation anddiscrimination, but held that the rude behavior of the Canadian governmentofficials seeking to verify firm’s compliance with Softwood Lumber Agreementconstituted a violation of the minimum standard of treatment required byNAFTA for foreign investors. Tribunal also stated that “market access” couldbe considered a NAFTA-protected investment.UPSApr. 19, 1999*UNCITRAL 160 millionPendingUPS claims that Canadian post office parcel delivery service, due to its statusas a public service, enjoys NAFTA-illegal subsidies that undermine themarket share of foreign private sector competitor UPS.Sun BeltOct. 12, 1999*Arbitration hasnot yetcommenced 10 billionUnknownU.S. water company challenged moratorium by Canadian province (BritishColumbia) on bulk water exports.Ketchum and TysaInvestmentsDec. 22, 2000**ArbitrationnevercommencedTrammel CrowSep. 7, 2001**Arbitrationnevercommenced 32 millionCromptonNov. 6, 2001**Arbitration hasnot yetcommenced 100 millionU.S. softwood lumber firms challenged Canadian implementation of 1996Softwood Lumber Agreement. Case later withdrawn, perhaps due to limitedsuccess of similar Pope & Talbot case.SettledU.S. real estate company filed complaint regarding discrimination overCanada Post’s competitive bidding process. Reportedly settled in 2002.U.S. chemical company, producer of pesticide lindane, a hazardouspersistent organic pollutant, challenges voluntary agreement established inCanada to restrict production of the chemical.Cases & Claims Against MexicoAmtradeInternationalApr. 21, 1995**Arbitrationnevercommenced 20 millionMetalcladJan. 13, 1997*ICSID 90 millionU.S. firm claimed it was discriminated against by a Mexican firm whileseeking to bid for pieces of property, in violation of a pre-existing settlementagreement. Little is known with regard to the disposition of this case.Metalcladwins, 15.6million paidU.S. firm challenged Mexican municipality’s refusal to grant constructionpermit for toxic waste dump and governor’s declaration of ecologicalpreserve surrounding the site.August 2000 – NAFTA tribunal ruled that the denial of the construction permitand the creation of an ecological reserve are tantamount to an “indirect”expropriation and that Mexico violated the minimum standard of treatmentguaranteed foreign investors because the firm was not granted a “clear andpredictable” regulatory framework. In October 2000, the Mexican governmentchallenged the NAFTA ruling in Canadian court alleging arbitral error. ACanadian judge ruled that the tribunal erred in part by importing transparencyrequirements of NAFTA Ch 18 into Ch 11 and reduced award by 1 million.In 2004, the Mexican federal government’s effort to hold state financiallyresponsible failed in Mexican Supreme Court.iii
Public Citizen’s Global Trade Watch, February 2005Azinian, et al.Mar. 10, 1997*ICSID 19 millionDismissedU.S. investors challenged revocation of solid waste collection contract byCity of Naucalpan and Mexican federal court decision upholding therevocation.November 1999 – Claim dismissed. NAFTA tribunal held that the firm madefraudulent misrepresentations with regard to its experience and capacity tofulfill the contract and dismissed claims of expropriation and unfair treatment.Waste ManagementSep. 29, 1998*Resubmitted:Sep. 18, 2000*ICSID 60 millionDismissedU.S. waste disposal giant challenged City of Acapulco revocation of wastedisposal concession, also implicated Mexican courts and the actions ofMexican government banks.April 2004 – Claim dismissed. Tribunal found that the investor’s businessplan was based on unsustainable assumptions and that none of thegovernment bodies named in the complaint failed to accord the minimumstandard of treatment, nor did the city’s actions amount to an expropriation.Karpa (Feldman)Apr. 7, 1999*ICSID 50 millionKarpa wins, 1.5 millionpaidU.S. cigarette exporter challenged denial of export tax rebate by Mexicangovernment.December 2002 – The tribunal rejected an expropriation claim but upheld aclaim of discrimination after the Mexican government failed to provideevidence that the firm was being treated similarly to Mexican firms in “likecircumstances.” Karpa attempted to bring this ruling into Canadian domesticcourt, but its case was dismissed by a Canadian judge.Scott Ashton BlairMay 21, 1999**ArbitrationnevercommencedValue ofproperty heownsU.S. investor purchased a residence and restaurant in Mexico and claims hewas a harassed by Mexican government officials and improperly jailedbecause he was a U.S. citizen.Adams, et al.Feb. 16, 2001*UNCITRAL 75 millionU.S. landowners challenged Mexican court ruling that developer who soldthem property did not own land and therefore could not convey it.Lomas Santa FeAug. 28, 2001**
NAFTA Chapter 11 Investor-State Cases TABLE OF NAFTA CHAPTER 11 INVESTOR-STATE CASES & CLAIMS February 2005 Key **Indicates date Notice of Intent to File a Claim was filed, the first step in the NAFTA investor-state process when an investor notifies a government that it intends to bring a NAFTA Chapter 11 suit against that government.
I.1 What is the USMCA? A.Originally “NAFTA 2018” or “NAFTA 2.0” B.Replaces NAFTA upon entry into force C.Builds on legacy NAFTA 1994 concepts and rules D.Builds on work done under TPP & other FTAs E.Modernizes NAFTA Modified Rules of origin Services
Part One: Heir of Ash Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Chapter 20 Chapter 21 Chapter 22 Chapter 23 Chapter 24 Chapter 25 Chapter 26 Chapter 27 Chapter 28 Chapter 29 Chapter 30 .
NAFTA originated goods. While the specific rules of origin are mentioned in NAFTA Annex 401, issues related to “Regional Value Content” are stated in Chapter 4 of NAFTA (Article 402). Once the Regional Value Content is determined, I would know if the shipper is eligible to offer a NAFTA certificate of origin for this export shipment
TN (Trade NAFTA) Status for TN Citizens of Canada and Mexico Instructions & Forms The TN (Trade NAFTA) category was developed as part of the North American Free Trade Agreement (NAFTA) to facilitate the entry of Canadian and Mexican Citizens to the United States (U.S.) in order t
TO KILL A MOCKINGBIRD. Contents Dedication Epigraph Part One Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 Part Two Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18. Chapter 19 Chapter 20 Chapter 21 Chapter 22 Chapter 23 Chapter 24 Chapter 25 Chapter 26
DEDICATION PART ONE Chapter 1 Chapter 2 Chapter 3 Chapter 4 Chapter 5 Chapter 6 Chapter 7 Chapter 8 Chapter 9 Chapter 10 Chapter 11 PART TWO Chapter 12 Chapter 13 Chapter 14 Chapter 15 Chapter 16 Chapter 17 Chapter 18 Chapter 19 Chapter 20 Chapter 21 Chapter 22 Chapter 23 .
Mar 29, 2019 · Modernizing NAFTA The USMCA updates NAFTA and offers meaningful improvements for US commercial interests in a number of ways. For example, the USMCA dramatically strengthens existing rules on state-owned enterprises and enhances the labor and environmental obligations of the parties, in
a central part of the Revolution’s narrative, the American Revolution would have never occurred nor followed the course that we know now without the ideas, dreams, and blood spilled by American patriots whose names are not recorded alongside Washington, Jefferson, and Adams in history books. The Road to the War for American Independence By the time the first shots were fired in the American .
