October 22, 2008

Why NAFTA Sucks: DOW to Sue Canada for anti-pesticide laws

By admin

Original story here from Canadian Newswire.

This story is a little hard to figure out, but it seems like DOW, the company that gave us Bhopal and Napalm, is suing the government of Canada through a backdoor policy with NAFTA known as ‘Chapter 11’.  Apparently, with Chapter 11, companies that are ‘wrongfully’ affected by the legislation of any Canadian body can seek damages.

I did a quick search on ‘Chapter 11 settlements’ and found this chart .  While there aren’t many cases that actually have an impact on Canada (it’s actually the other way around), I’m surprised that this kind of mechanism hasn’t received more scrutiny in the grand scheme of things.

Does it protect Canadians or Canadian companies?  I doubt it.

Does it prevent Canadians from doing what they want to do without facing challenges from US or Mexican companies?  THAT’S the big question.  What will happen in a fragmented marketplace when a conglomerate can claim that ‘local’ is illegal under the NAFTA?  What about fair-trade policies?  What happens when other pieces of legislation are brought into question, discouraging lawmakers from being proactive in the first place?

Obviously, for a legal expert, these seem like pretty naive questions, but for your average Canadian, these types of challenges and these mechanisms could be very damaging to new businesses and efforts to shift away from a traditional way of doing business (ie. the corporate, mega-co kind of way).

What are your thoughts on this?

CALGARY, Oct. 22 /CNW/ – Dow AgroSciences LLC today confirms that it has submitted a Notice of Intent to Submit a Claim to Arbitration for breach of Canada’s obligations under NAFTA.

In filing this Notice, Dow AgroSciences alleges that the Government of Canada has breached its obligations under Section A of Chapter 11 of NAFTA, under Article 1105 (Fair and Equitable Treatment in Accordance with International Law) and Article 1110 (Expropriation).

Dow AgroSciences bases its claim on the actions of the Government of Quebec in starting a campaign in 2002 to ban 2,4-D, a Dow AgroSciences pesticide product, without any scientific basis for such a ban.

That ban went into force on April 3, 2006 despite the Government of Quebec’s own advice that there was no scientific basis for this ban and despite numerous attempts by Dow AgroSciences to work with the Government of Quebec in using a science-based, transparent policymaking framework for the decision affecting 2,4-D. The Government of Quebec and the Government of Canada are both parties to NAFTA.

"This challenge is aimed at ensuring that important public policy decisions are based on scientific evidence, predictability and a clear set of principles, and are managed within a transparent framework," said Jim Wispinski, President and CEO of Dow AgroSciences. "The actions of the Government of Quebec are tantamount to a blanket ban based on non-scientific
criteria, and we are of the view that this is in breach to certain provisions of NAFTA. We don’t welcome this step, but feel it is necessary given the circumstances."

Dow AgroSciences manufactures 2,4-D for sale to companies around the world, including Canada. Regulators in several countries, including Canada, the United States and in the European Union, have all reviewed 2,4-D on the basis of modern science and concluded that it is safe for use according to label instructions. On May 16, 2008, Health Canada’s Pest Management Regulatory Agency announced the results of an extensive review on 2,4-D. The
PMRA concluded that 2,4-D can be used safely according to label directions for a variety of lawn, turf and agricultural applications, and that the product meets all of Canada’s pesticide health and safety regulations, which are among the toughest and most stringent in the world.

The Notice of Intent was filed with The Department of Justice and is available online at
gov.aspx?lang=en. Dow AgroSciences is seeking a $2 million CAD settlement, plus legal costs, in filing its Notice.