A far-reaching legal case involving a Mexican city government and a US multinational corporation over a toxic waste dump threatens to affect municipal governments ability to protect the public interest.
Metalclad successfully sued the Mexican government under NAFTA because one of its city governments refused to let the US multinational operate a toxic waste dump in their city.
The NAFTA panel ordered the Mexican government to pay Metalclad more than $17 million US in compensation for “expropriating” the companys assets.
Mexico has appealed the decision in a Canadian court
“If it can happen in Mexico, it could happen here,” said Judy Darcy, National President of the Canadian Union of Public Employees. “This case is a frightening example of the way NAFTA puts corporate profits ahead of public health, and the rights of foreign corporations ahead of the democratic rights of citizens.”
CUPE has asked the BC Supreme Court for the right to intervene in the precedent-setting case.
Under NAFTA Chapter 11, any action by a government that limits the current or future value of assets held by a foreign corporation is subject to a claim for compensation.
”NAFTA protects investors, but what about the rights of citizens? What about respect for local democracy and domestic laws? Elected municipal officials must have the right to make decisions in the public interest,” said Darcy.
“If this ruling is upheld no town or city will be safe. Any municipality could find itself facing a damage claim from a foreign corporation that feels its profits have been harmed,” said Darcy. “What would have happened in the Adams Mine case if a US corporation could have sued the City of Toronto for scrapping the project?”