NAFTA Arbitration Panel Makes Precedent Setting Ruling In Favour of Canadian NGO

Decision favours IISD intervention in upcoming Methanex Chapter 11 hearing

Read the Tribunal's decision.

WINNIPEG — After more than six months of intense effort by the International Institute for Sustainable Development, a NAFTA Chapter 11 Tribunal has set a precedent by ruling that it has the power to accept amicus curiae ("friends of the court") briefs. The January 16 decision in the controversial case of Methanex vs. the United States clears the way for a decision to accept IISD's petition to submit its legal arguments to what has until now been a process closed to public participation.

"We are delighted that the Tribunal has acted where it felt it could to provide civil society access." David Runnalls, IISD President said. "They have broken new ground by recognizing the important public interest element of this case, and that the Chapter 11 process could benefit from greater openness and transparency."

In November of last year both the Canadian and U.S. governments formally supported the IISD petition in the case, which pits a Canadian firm against the US over a Californian ban of a suspected carcinogen. The Mexican government and the firm, Methanex, both opposed the petition. The Tribunal said it was "at present minded to receive" the amicus submissions of the IISD, but delayed its final decision until the procedural steps for doing so can be determined. The show of government support and IISD's credentials, which the Tribunal called "impressive", undoubtedly influenced the decision in favour of the IISD.

This ruling is important for several reasons:

• It is an essential first step in opening the previously closed Chapter 11 proceedings to non-parties, clearing the way for possible substantive roles for civil society.
• While this ruling does not legally bind other tribunals, it does set a precedent that will be referred to. The strength of the precedent is reinforced by the fact the both Canada and the United States supported IISD's petition.
• It reveals an inherent recognition of the important public interest element in this case.

IISD had its request to participate in the Tribunal's oral hearings turned down due to Methanex's opposition. The United States, on the other hand, consented to IISD's participation in the proceedings.

"We regret we will not have the opportunity to make oral arguments." Runnalls said, "It is hard not to be struck by the Methanex position in this case. On the one hand they argue for more transparency and access to the governmental decision-making process when their interests are affected. On the other hand they make every effort to prevent any public access in this case. We applaud the United States for supporting our bid to participate in the oral arguments, even though that bid was unsuccessful."

If the Methanex dispute is settled in the company's favour it will set a precedent that could plague North American environmental regulators for years to come, potentially forcing them to pay polluters to stop polluting. IISD hopes to put forward interpretations of NAFTA's Chapter 11 that will not lead to such results.