NEWS RELEASES
NAFTA TRIBUNAL RULES AGAINST CANADA
November 13, 2000 (5:00 p.m. EST) No. 266
NAFTA TRIBUNAL RULES AGAINST CANADA
The Government of Canada today acknowledged receipt of a NAFTA Tribunal decision
that concluded that Canada's temporary ban on the export of PCB waste between
November 1995 and February 1997 breached two provisions of the NAFTA's
investment chapter.
This is a partial award. The next stage of the arbitration will determine the amount of
damages that S.D. Myers has suffered, if any. Chapter 11 of the NAFTA prohibits the
award of punitive damages.
The ruling does not require Canada to change its environmental laws, including its
regulations to control PCBs. The Tribunal's decision was with respect to an interim
order, which is no longer in effect. Nothing in the decision detracts from Canada's
ability to regulate the safe movement and disposal of hazardous wastes, including PCB
wastes. The Tribunal directly acknowledged that NAFTA members "have a right to
establish high levels of environmental protection. They are not obliged to compromise
their standards merely to satisfy the political or economic interests of other states."
The Tribunal upheld claims by S.D. Myers Inc. of Tallmadge, Ohio that Canada
breached its obligations under NAFTA Chapter 11 with respect to: National Treatment
(1102), and Minimum Standard of Treatment (1105). This decision also held that
Canada did not breach Chapter 11 with respect to Performance Requirements (1106)
and Expropriation (1110).
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A detailed backgrounder is attached.
For further information, media representatives may contact:
Media Relations Office
Department of Foreign Affairs and International Trade
(613) 995-1874
This document is also available on the Department of Foreign Affairs and International
Trade's Internet site:
http://www.dfait-maeci.gc.ca
Backgrounder
CHRONOLOGY
NAFTA CHAPTER 11 - S.D. MYERS INC.
DECISION OF THE TRIBUNAL
1. On July 22, 1998, S.D. Myers Inc.(headquartered in Tallmadge, Ohio) served on the
Government its Notice of Intent to Submit a Claim to Arbitration under the investor-state
dispute settlement provisions of Chapter 11 (Investment) of the NAFTA.
2. On October 30, 1998, S.D. Myers filed a Claim to Arbitration, which started the
formal arbitration process. S.D. Myers alleges that Canada's PCB Waste Export Interim
Order (issued November 20, 1995, rescinded February 4, 1997) breached the following
NAFTA obligations: (i) Article 1102 - National Treatment; (ii) Article 1105 - Minimum
Standard of Treatment; (iii) Article 1106 - Performance Requirements; and (iv) Article
1110 - Expropriation. S.D. Myers claims that the Canadian export ban prohibited it from
conducting its business in Canada. S.D. Myers has claimed damages of not less than
US$20 million.
3. The Tribunal was fully established on March 4, 1999, with S.D. Myers's appointment
of Dr. Bryan Schwartz, Professor of Law, University of Manitoba, and both parties
agreeing to the appointment of Professor Martin Hunter (U.K.) as presiding arbitrator.
Canada's appointee to the Tribunal was Edward Chiasson of Vancouver, B.C.
4. In accordance with the Tribunal's timetable, Canada submitted its Statement of
Defence on June 18, 1999. On July 20, 1999, S.D. Myers submitted its Memorial (i.e.
main argument). Canada submitted its Counter-memorial on October 5, 1999.
Supplementary briefs were delivered on December 15, 1999, and pre-hearing
submissions on January 14, 2000.
5. Both the U.S. and Mexico had representatives present throughout the proceedings,
although only Mexico made any submissions to the Tribunal. Mexico intervened on
questions of interpretation of Chapter 11 obligations, which were largely supportive of
Canada's position.
6. Substantive hearings took place before the Tribunal in Toronto on February 14-16,
2000.
7. The Tribunal decision was delivered to the parties on November 13, 2000.
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