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NAFTA's corporate investor rights and their threat to the environment Under NAFTA, corporations have the right to sue a government directly if they feel that their ability to profit has been undermined by for example an environmental law or regulation. Examples of such lawsuits include a case where Mexico was forced to pay $16 million after denying a U.S. company a permit to build a toxic waste facility on an environmentally sensitive site, and a current case where a Canadian mining company is suing the U.S. for $50 million over a California law that requires that the holes created by open-pit mining be "backfilled" and that the landscape be brought back to its original form once mining operations have been completed. NAFTA's investor rights go beyond the rights granted to U.S. companies in protection against regulatory takings. Under NAFTA's rules, indirect expropriation and loss of future profits constitute grounds for a NAFTA case, threatening a wide array of legitimate policy regulations aimed at protecting the public health and the environment. Under NAFTA's "investor" provisions several attacks have been made on the environment and public health: A Canadian gold mining company recently sued the United States to escape the clean up and reclamation of a mine site in California, claiming that this would have interfered with the Canadian company's profits. The Mexican government was forced to pay the California Metalclad company $16 million in compensation when the local municipal government of Guadalcazar denied the construction of a toxic waste disposal facility on an environmentally sensitive site that had previously been contaminated with 20,000 tons of toxic waste. A Canadian company challenged California's right to ban the gasoline additive MTBE. California banned MTBE because it leaked from underground gasoline storage tanks and polluted drinking and surface water throughout the state. The Canadian company Methanex sued California for almost $1 billion because its profits were allegedly harmed by California's MTBE ban. CAFTA provides foreign investors greater rights than U.S. companies (pdf) New: Sierra Club Backgrounder on NAFTA's Chapter 11 (October 2004) "Sierra Club Factsheet: New Pro-Corporate Rules Threaten Our Environment and Health" (pdf) "Private Rights - Public Problems: a guide to NAFTA's controversial chapter on investor rights" (pdf) Up to Top HOME | Email Signup | About Us | Contact Us | Terms of Use | © 2008 Sierra Club