Copyright (c) 2003 Lewis & Clark Law School
ARTICLE: THE NAFTA CHAPTER 11 EXPROPRIATION DEBATE THROUGH THE EYES OF A PROPERTY THEORIST
33 Envtl. L. 851
Marc R. Poirier*
It has become clear that something is amiss with Chapter 11 of the North American Free Trade Agreement (NAFTA). 3 This Chapter provides protection for foreign investors through a series of substantive guarantees, backed up by an Investor State Dispute Mechanism (ISDM) that allows direct arbitration by a foreign investor against a state. 4 These guarantees - especially the guarantees of fair treatment under minimum international standards 5 and of compensation for indirect expropriation of property, 6 and to some extent the guarantee of national treatment 7 - are being invoked broadly to attack perfectly standard exercises of the police power that purport to protect public health, safety, welfare, and the environment. In one pending arbitration, Methanex v. United States, damages of close to $ 1 billion are being sought from the United States for lost market share because California has banned a gasoline additive that it believes imperils the water supply. 8 In Metalclad v. United Mexican States, an arbitration that concluded in 2000, a U.S. investor sought $ 90 million and was awarded $ 16 million because a Mexican city denied a building permit for a hazardous waste facility and a Mexican state declared the land an environmentally protected area. 9 The British Columbia Supreme Court subsequently narrowed the holding of the arbitration panel, but the award was not reversed altogether, 10 and the claim was settled in 2001 for the $ 16 million. 11 Indeed, in the first invocation of NAFTA Chapter ...
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