Say what? Taxpayers must Pay Corporations for Clean Air and Water?

Great Debates
21

Not to worry, you are not driving anyone out of the discussion. I knew beforehand that I knew very little about NAFTA, but on seeing the OP, thought the facts of this particular issue were straightforward and not in dispute. I therefore felt I could pontificate a bit on the matter. Having seen that this is not at all the case, i realize that it was a mistake for me to have commented.

A question for Mandelstam: it would appear that the document that Rick is linking to (I have no problems with the link) is the actual claim filed by the company, as opposed to a company description of the claim, which you appear to believe it to be. As such, statements like

don’t appear to make any sense at all. If you see with your own eyes someone saying “I claim X”, and a “prominent journalist writing for an a publication of longstanding repute” writes “so-and-so just claimed Y”, who do you believe? Perhaps you should try to get the link to work before disputing that particular issue.

However I will note that though the claim is heavily based on the discrimination issue, it does mention (page 67-68) that “one NAFTA tribunal has held that regulatory taking can be unlawful even if they are not discriminatory”, though the exact circumstances of this are not clear (to me).

22

Izzy, Thanks for the extra input as to the Adobe link. I was indeed proceeding on the assumption that what Rick was posting was some kind of press release with excerpts from the proceedings, and not the full text of the proceedings themselves. That said, I must disagree that my above assertion of a false antithesis makes no sense.

First, given all the intricacies above, you may have missed that I have already addressed why I believe (based primarily on the posted legal analysis) that Methanax’s expropriation claim will depend on their proving discrimination. The fact that the company is citing that “one NAFTA tribunal has held that regulatory taking can be unlawful even if they are not discriminatory” only proves the point that I am trying to make: to wit, the heart of the claim is “regulatory taking”–the same controversial doctrine that Greider’s article is all about; the same controversial doctrine that Rick insists doesn’t either exist in NAFTA or apply in the Methanax case. Proof of discrimination is here, in other words, playing a secondary role in proving an argument about “regulatory taking.” But by Rick’s account the claim is only about discrimination and not at all about “regulatory taking.”

Moreover, ven if you’re single citation hadn’t proved the point I’ve been attempting to make since Rick’s first intervention, I would still dispute that any single primary document (to use Rick’s phrase) must necessarily trump a solid journalistic account by a reliable reporter. At best, Rick’s understanding of the Methanax claim (which appears to be faulty) might have caused him to want to question Greider’s article. Why, Rick might have asked, did Greider leave out the “discrimination” side of the “regulatory takings” argument? But that’s not what Rick did: rather, he dismissed Greider’s article out of hand (along with all of the supportive links I provided) which suggests that he’s either a) too prejudiced in favor of NAFTA to review the available evidence objectively; or b) lost in the complexities of all of this.

It’s now up to Rick to take a closer look at Greider’s article, and even review his own info in the context of what’s been said. So I won’t take your post, Izzy, as an opportunity to preempt Rick’s response.

But what you, Izzy, ought to realize is that, whatever the nuances of the Methanax case, there is a larger issue out there that Rick–so far–is attempting to deny. I hope you don’t fall into the same error. Why don’t you do a google search for yourself or, if you prefer, look at the Public Citizen link, read the Greider article, read the law student’s analysis, then (as I hope to do very soon) read the Methanax claim (again). As I said above, where there’s smoke, there’s fire.

23

>> I should believe Methanax more than a prominent journalist writing for an a publication of longstanding repute?

Mandelstam, that makes no sense. We are not talking about whether their claim has merit or not, we are talking about what their claim IS. If I read it, I believe my eyes before I believe third sources.

Rickjay’s posts make sense to me and are well documented.

24

sailor, just in case you missed this part, I must resort to the ultra-indulgent resort of quoting my own post!

“My point: any sophisticated commentator on the sidelines, as we both are, has to recognize that when the picture is complicated the idea is to get the clearest picture you can and even to keep an open mind if and when sources seem to conflict. In addition, I see no reason whatsoever to assume that Methanax is the most reliable source since Methanax has a billion dollars at stake in diffusing public alarm.”

I’ve bolded my favorite part! :wink:

25

With respect to the content of their complaint to NAFTA? I’m not talking about what the ugly truth of MTBE is - I’m talking about the actual complaint that was presented, which I linked to but you apparently can’t get to work. Well, of course you should believe Methanex - or more precisely, believe the text of the complaint. If you’re going to tell me that I should doubt Methanex’s claims about the health hazards of MTBE or the ways it can be spread into the environment and cite a well respected journalist, that’s one thing. Obviously, they’re motivated to lie; in fact, I noticed some highly suspicious oversimplifications just going through it yesterday.

Here isthe EPA report on MTBE-related risks. This is a .pdf file, too.

But the question here was what is the complaint for? If you want to know what’s in the complaint, then the only relevant evidence is… what’s in the complaint. Or is their complaint a fake document or something? If you read the complaint, you’ll see what the basis of the complaint is; they claim that the State of California acted in a discriminatory fashion.

I’m quite certain here that you have mistaken my position. I’m not saying Methanex’s suit is justified or will win or won’t. I don’t know. What I am saying, however, is that the sources you quoted have NOT accurately described the basis of their complaint to the NAFTA secretariat, and have left out the very crux of both the complaint and the part of NAFTA it appeals to; the anti-discrimination provision. The text of the complaint itself is absolute proof of my position that Mr. Greider misrepresented the truth - unless you’re saying it’s a fake complaint, and that what was submitted to the secretariat is different.

What it says, really clearly, is: “We were discriminated against and it cost us money.” Mr. Greider is stating that that ISN’T what they claimed; he says they just claimed the “cost us money” part and that NAFTA supports them, and that isn’t true. Now, is Methanex’s claim of discrimination true in itself? Beats me. But that is, in fact, what they’re saying, and what the NAFTA secretariat will rule on.

Well, that kind of sucks, since the complaint really simplifies the discussion, but I apologize; I should have mentioned before it isn’t just HTML.

I admit that I don’t see how this is substantially different from existing tort law. Damages are damages; NAFTA doesn’t explicitly allow anything you couldn’t sue for before, and I’m not aware of any NAFTA decisions that expand any definitions in this regard. Suing for damages over loss of business is a practice a lot older than you or I. The claim of expropriation is the basis for assessing damages, not for determining if the complaint will win or not. The government can expropriate your money fifty thousand different ways, but if you try to appeal to NAFTA to have your income tax bill thrown out, they’ll laugh you right out of the star chamber. The only basis Methanex has, and the only basis they claim, is that in this case they had their business expropriated only because they’re a foreign company.

Of course, this does give private interests one more avenue to attack the government, and in theory that could be a bad thing. But A) I haven’t seen a case yet where it was, and B) it’s begging the question to assume that giving private interests more power over government is, necessarily, a bad thing. The government’s hardly short on power.

The problem I can see here that’s actually objectively true is the notion that this goes to an arbitrator, not a court of law. That said, (a) the use of arbitrators isn’t new, either, and (b) I’m sure you can see the rationale for using an arbitrator when any court of law will be biased towards their own country. (I guess you could use the third country’s courts, but some disputes are trilateral.) That’s not to say it isn’t still a problem, though.

Maybe the case has been dropped; I’ve heard nothing about that particular case for months, no press clippings, no progress on the case, nothing. Methanex hasn’t released a peep about it.

I am sure the great majority of Americans (or Canadians, or Mexicans, or anyone) aren’t familiar with the terms or effects of most international treaties the United States enters into; if you’re arguing for more public awareness of what the government’s up to I’m in your corner.

That (And Greider’s comment, which I deleted for space) is, IMHO, entirely subjective and without supporting evidence. Americans DID sanction this doctrine in their legislation - international treaties are law, according to the Constitution. If the government has done something the majority of the people don’t want, that sucks, but it doesn’t make the United States any less democratic a country than it was before NAFTA was passed; it’s merely another treaty, and participation remains voluntary. Furthermore, claims of a chilling effect on environmental legislation are, so far, unsupported. California is still going ahead with the MTBE ban, and as mentioned earlier in the thread they’re making moves against ethanol, too.

That’s strikes me as just silly; this is the old “the criminals have rights that law-abiding folk don’t” argument. Everyone (within the USA, Canada, and Mexico) has the same rights under NAFTA. Nobody is excluded. Of course, with specific reference to the anti-discrimination clause, it’s likely that foreign companies will be the first ones to complain, because they’re likeliest to be discriminated against. Greider ignores the fact that the whole point to NAFTA is that everyone will be treated equally, and the complaints process is supposed to hear complaints of unequal treatment. How, might I ask, does filing a complaint of discrimination grant you exclusive rights under the law? If I file a complaint with the Human Rights Commission, am I getting something extra that people who weren’t discriminated against don’t get?

I find slippery-slope arguments really, really unconvincing if they aren’t supported with objective evidence that the slope really does have grease on it or that bodies are piled up at the bottom. Seven years after NAFTA, we still have environmental and health legislation.

Uhh… you didn’t scroll down the page, I guess. The entire book is there for you to read, from the first page to the last. Scroll down and click on Chapter 3. Sorry, I’m posting the links; you’re just not reading them. (And yes, I did read Greider’s stuff.)

If you can get Adobe working - I hate it, personally - this will be a clearer discussion.

26

>> “the idea is to get the clearest picture you can and even to keep an open mind if and when sources seem to conflict”

So I have to deny what I saw with my own eyes and believe what a stranger tells me? This is just plain nonsense. All sources do not carry equal weight. If I can read your posts directly I am not going to “keep an open mind” and believe someone who says you posted something else. Secondary sources carry little weight if you have access to the original source.

27
  1. This issue is not complicated. The issue is whether Methanex has file a complaint on the basis of non-discriminatory expropiation. Either they have or they haven’t. If they have, they must state so somewhere in their complaint. So all you have to do to prove your complaint is to provide a cite of them making such a claim.
  2. The “clearest picture” is the Methanex complaint. The only reason an article about the complaint would be used is if one did not have access to the original complaint.
  3. The term “open mind” means willingness to accept evidence. It does not mean a willingness to forego evidence. Whatever this reporter has said is hearsay. If you wish to arguee on the basis of the actual complaint, that would be admissable.
  4. Methanex is the most reliable source because they are the source. Every other source is based on what they said. Your statement is like saying “I don’t see why actually watching a movie would give me any better idea of what it is about than just reading a review of it”.
28

That should be “all you have to do to prove your position…”

29

The Ryan, I’m not exactly sure what your point is, but thanks for defining an open mind. :wink:

Okay, still no joy on Adobe, but did manage to get an e-mailed copy of a Q & A background on Methanex’s NAFTA claim and MTBE. This is also available on the Web (including the very attractive Methanex logo).

In answer to the question “What is the basis of the claim?” Methanex replies: (DRUM ROLL PLEASE…)

"Methanex’s claim is that the actions taken by the Government of California to ban the use of MTBE by the end of 2002 constitute a breach of Article 110 (Expropriation and Compensation), Chapter 11 of NAFTA.

http://www.methanex.com/investorcentre/mtbe/naftaQ&A.pdf

Ta Da!

NOTE: In this and in every other respect, Methanex’s Q & A supports the facts of the case as they are presented in William Greider’s article.

Although I still am not able to look at Rick’s link,(and although I still have every intention of doing so once I sort out this annoying Adobe problem), Izzy’s single quotation from it was sufficient to demonstrate the accuracy of Greider’s basic account; and the Q & A will leave no doubt in the mind of any one else who is, if I may invoke The Ryan, “willing to accept evidence.”

Rick my guess is that you did not understand that the thrust of the case was expropriation, that expropriation involves a controversial use of the “takings” doctrine, and that any allegations of discrimination (none of which are raised in the Q & A), are merely subsidiary to the former.

(Although it’s always possible that there’s a second lawsuit. The one in the Q & A is quite clearly the one Greider describes as you’ll see when you look it over).

Now that we have established the basic facts (I hope), I we can proceed to have a debate about what really is debatable here.

Rick: "[T]he sources you quoted have NOT accurately described the basis of their complaint to the NAFTA secretariat

Entirely untrue, as I think you will have to admit when you look at the Q & A.

“and have left out the very crux of both the complaint and the part of NAFTA it appeals to”

Untrue, or, if you prefer, extremely exaggerated, as the Q & A proves. At most, a subsidiary element of proving the expropriation case has been left out, and it has been left out because it’s not relevant to what Greider’s writing about. The article–for the two of you who’ve read it–is about investor protections under NAFTA, not about the Methanex case alone. If you like we can (and perhaps should) shift our ground from the Methanex case to the above-cited Loewen case, where discrimination isn’t at all at issue in the expropriation case.

Rick: “I admit that I don’t see how this is substantially different from existing tort law.”

The most important is that “regulatory takings” isn’t part of existing tort law. Under NAFTA it is. That is a huge difference as I think you’ll agree.

For other differences see the link to Public Citizen’s report.

“The problem I can see here that’s actually objectively true is the notion that this goes to an arbitrator, not a court of law. That said, (a) the use of arbitrators isn’t new, either, and (b) I’m sure you can see the rationale for using an arbitrator when any court of law will be biased towards their own country. (I guess you could use the third country’s courts, but some disputes are trilateral.) That’s not to say it isn’t still a problem, though.”

Exactly. It’s a very big problem because there’s too much secrecy and no accountability. Here is Public Citizen on one of the consequences with regard to environmental issues.

“The Preamble of NAFTA states that countries will undertake their obligations in a manner “consistent with environmental
protection and conservation.” Further language in Article 1114 of the investment chapter purports to protect the environment, and prevent a race to the bottom in environmental standards. These provisions of NAFTA have been given such short shrift by NAFTA tribunals as to render them meaningless. In the toxic waste case, there was no evidence
that the tribunal weighed NAFTA’s environmental provisions at all before reaching their final decision. The ruling does make clear that no weight was given to the environmental concerns of the community which was the reason that local officials tried to block the dump. Further, the panel set a number of disturbing precedents. It not only equated the denial of a municipal construction permit and the creation of an ecological reserve with an “expropriation” under NAFTA, but it broadened the definition of expropriations to include “incidental” interference with the value of a property thus opening the door for all sorts of legitimate zoning by a sub-national government to be challenged under NAFTA…”

This is, IMO, an outrageous subversion of democracy.

“Americans DID sanction this doctrine in their legislation - international treaties are law,according to the Constitution. If the government has done something the majority of the people don’t want,that sucks, but it doesn’t make the United States any less democratic a country than it was before NAFTA was passed; it’s merely another treaty, and participation remains voluntary.”

I disagree. Yes, Americans have been asleep at the wheel and/or have been hoodwinked on a number of important issues. But this is different because here legislators themselves didn’t understand what was going on. Many members of congress are against these provisions being used in this way: for the third time, they believed that these provisions were about protecting US investors against corruption in Mexico, not about protecting foreign corporations from US citizens desire for clean air and water.

In any case, even on your view of things, articles like Greider’s are crucial because they open people’s eyes to what’s going on. You may want to take the position that NAFTA must be honored, expropriation clauses and all, b/c it was lawfully enacted. But so was Prohibition. That doesn’t mean that we shouldn’t raise citizen awareness on the matter and overturn the law. Do you disagree?

As to Smoke and Mirrors, thanks for letting me know that the whole book is available for free online. At some point I might want to take a look. However, I’ve already said what I think on the matter (twice). The only thing that would change my opinion on its relevance to this debate is if there is a certain page on which the author writes, “Everything but the threat of a NAFTA ‘takings’ lawsuit influenced the dropping of the decision to require plain packaging.” And I have a funny feeling that if there were such a page, you’d have cited in chapter and verse by now. :wink:

30

Having read through the claim and the Greider article, it appears to me that the opposite is true. Greider is clearly being misleading and dishonest the discrimination part, which is what the entire filing is about (aside from the one paragraph that I mentioned). Obviously he is so worked up about the “takings” issue that he is trying to sound an alarm about the matter (his final chapter is a call for demonstrations & political pressure) and is painting a misleading picture in order to do so.

It is true that the treaty does allow for regulation to be treated as expropriation (or at least recognizes claims for things that are “tanamount to expropriation”). But it does not follow that any expropriation at all of this sort can be challenged. And to state that

and

is at best misleading - probably outright deceitful. I frankly find it hard to believe that this Greider fellow is a “prominant journalist” although he may well have achieved prominance among those for whom ideology is more important than accuracy.

I see you’ve suggested that there was a second lawsuit. It almost seems that way.

Mandelstam I’m almost sorry that I let you on to that quote that “one NAFTA tribunal has held that regulatory taking can be unlawful even if they are not discriminatory”, as you continue to make innapropriate use of it, while still not having read the entire claim. Having actually read it, I can tell you that the entire claim was about 75 pages of allegations about the safety of their product vs. ethanol, other methods of controlling runoff and campaign contributions, from which they concluded that the decision was discriminatory and therefore subject to NAFTA. The quote in question was one paragraph, which - I note says “one NAFTA tribunal has held that regulatory taking can be unlawful even if they are not discriminatory” - it does not go into what circumstances that might be.

I’m surprised by your most recent claim that

This is absurd. No one is denying that Methanex is basing their claim on the fact that the regulations amount to expropriation. Please don’t keep on pointing to this as proof of anything. The point is that regulations amounting to expropriation is not in and of itself enough to cause liability.

It seems to me that this sentence should be completely reversed.

31

Mandelstam, you are creating a false comparison. The correct comparison is distinctly not between what the complaint says and how Greider interprets the complaint.
Instead, it is between how Greider, an award-winning journalist, inteprets the complaint, and how Rickjay interprets the complaint.

Pulling on my lawyer hat for a second, after reading the complaint, Rickjay is correct. Methanex is asserting that the MBTE regulation is discriminatory against them because there is not equivalent regulation concerning products based on ADM’s ethanol.
Quite frankly, I cannot figure out how Greidel came to his interpretation. A reading of the plain language of Section VI of the complaint “Legal Arguments” makes it crystal-clear that the basis of the complaint is that ADM, a domestic corporation, is being treated differently than Methanex, a foreign corporation.

Whether or not Methanex is correct in their assertion is another issue.

Sua

32

Sua, I know you’re a reasonable enough person, though we’ve had our differences. Do me a favor and read the Q & A and tell me if it’s the same case. (Also, take a brief look at the Kent law scholar’s piece if you like). As I can’t read the link, I can only assume that there are two different cases at play; or maybe an amended case. The Q & A clearly supports the basic reading of the case offered by Greider, Public Citizen, the online trade publication and everyone else I have cited. And I could cite dozens more. There must be an answer to this as there is I am not ready to believe that there is a collective delusion here that includes Methanex’s own question and answers.

Also, let me make sure that we have this straight: is this or is this not a case of “regulatory takings” under chapter 11, 1110? Because if it is, Greider has not misinterpreted at all.

33

Until you’ve read the claim, you’re still arguing from assumptions. I cannot help but notice that the less-than-entirely-detailed Q&A document states that the expropriation claim is based on Article 1110 - which, of course, is the article that specifically states that expropriation of assets must be done in a non-discriminatory manner.

I would compare this to a human rights complaint against an employer who refuses to promote an employee because she is black. The basis of the claim is a failure to give an earned promotion, and the claim might ask for relevant monetary damages. But the claim isn’t “He owes me money because he didn’t promote me.” Not getting promoted is not a human rights violation. It’s a human rights violation because it was discriminatory. The Methanex suit is quite similar to that. Governments routinely do things that cost people and coroporations money all the time. In this case, however, it’s alleged they were discriminatory. Since we’re quoting news releases, here is another Methanex news release that’s quite clear on the issue of discriminatory treatment. This release is later than the Q&A document, which came out quite some time before the amended claim. The amended claim suggests that the claim of discrimination has been beefed up, so maybe the original claim was just too weak to run.

Yes, Methanex is asking for money to make up for it. Yes, NAFTA allows them to ask for that. But why, oh why, did Mr. Greider leave out the issue of discriminatory treatment? It’s not a minor issue, and there is absolutely no possible way he could have missed it; more than THREE QUARTERS OF THE COMPLAINT is dedicated to arguing discrimination. It practically IS the complaint. I sure as hell hope he didn’t go by the Q&A document without reading the complaint or the NAFTA treaty. Going through the actual complaint:

pp. 1-3: Reason for the amended claim (basically, that there was new evidence of Gray Davis being in bed with ADM)

pp. 3-7: Summary of who Methanex is and what MTBE is

pp. 7-10: Summary of ethanol industry; claims that ethanol is heavily favoured by U.S. and state governments

pp. 10-11: Various claims that ethanol will kill you

pp. 11-12: Claim that ethanol is unprofitable and so has led a smear campaign against MTBE

pp. 12-19: Claim that MTBE is politically discriminated against, including claims of racism

pp. 20-21: Claim of smear campaign against MTBE

pp. 21-24: Claims of political favouritism towards ADM

pp. 24-28: Claims that the environmental charges against MTBE are bull

pp. 27-33: Claims that the California action was discriminatory: "The California Governor’s Executive Order discriminates on its face in favor of the U.S. ethanol industry."

pp. 33-35: Claims that Europe is much nicer to MTBE and thinks MTBE is just the cat’s meow

pp. 35-38: Claims of what the damage to Methanex is; invocation of three sections of Article 11 (1102, 1105, 1110.)

pp. 38-69: Legal argument. Here is the title of the first section: “Environmental Regulations Are Often Used To Discriminate Against Foreigners Or Foreign Products In Violation Of International Law.” The entire legal argument is based on a claim of discrimination. Every single paragraph. There is not one part of the entire legal argument that ISN’T based on a claim of discrimination. Even the part that deals with expropriation is entitled NAFTA Article 1110 and International Law Prohibit Discriminatory Measures That Are Tantamount To Expropriation. (emphasis mine.)

Thirty two pages of legal claim. The bulk of the report. And from the first word to the last it’s all about discrimination. ALL of it.

pp. 70-72: Summary and cause of claim

Of 72 pages of the official submitted claim, about 90% of it goes directly to a claim of discrimination and favouritism. It is absolutely impossible for any person to read the complaint and not come to the conclusion that the complaint is all about discrimination - yet Mr. Greider never mentions it. I find that amazing; it is simply not possible for him to have read this complaint and miss the entire point of it, so why did he not even mention what the complaint is based on? Doesn’t that strike you as being a little strange? Imagine if I filed a complaint against my employer that I had been sexually harassed, and sued for damages of $50,000, and a journalist wrote a summary of the suit and talked at great length about my asking for damages but never once mentioned sexual harassment, never once said WHY I made the claim. Would that not seem like shoddy journalism to you?

Now, maybe Mr. Greider wasn’t reading the current version of the claim - but he has no excuse. It was filed in March; the article you linked to was from October.

34

Good God, folks. Can we just say you are both right? :wink:

Seriously though, I think Mandelstam got to the jist of the confusion when she noted that the Q&A fact sheet does not seem to mention the discriminatory aspect but rather concentrates on the takings aspect and asked whether what you linked to might be some sort of amended case.

Well in fact it is…

So, Rick Jay, I suggest you read section I.A. of the complaint that you linked to: “The reason for the amendment”. I think that section makes it clear that they amended the case precisely to insert the intentional discrimination claim. The implication (particularly in light of the Q&A thing that Mandelstam linked to) is that the original case relied solely on the expropriation argument (or maybe that it relied on “unintentional discrimination” but that seems rather unlikely in view of the Q&A thing on the Methanex investment site).

Maybe someone can find the original unamended claim?

So, I think what we are left with here is a picture that Methanex originally filed a claim based on expropriation but has since amended that claim (in Feb of this year) to add and emphasize intentional discrimination. Whether Greider should have known and mentioned this can certainly be argued … But then you can also ask why Methanex has failed to update the Q&A on their investor site to emphasize this rather than the takings aspect.

Basically, the interpretation of the expropriation clause in NAFTA is far from settled. But none other than the holy Methanex claim, Chapter 4, Verse 3 (actually p. 67) states, “Furthermore, one NAFTA Tribunal has held that regulatory takings can be unlawful even where they are not discriminatory.”

Finally, one should note that if you actually read Greider’s article (have we all done that yet?) then you will see that he presents the side of the argument [made by this guy Charles Roh who I mentioned in my previous post, perhaps not by name] that there are “unresolved legal ambiguities…and…that once more cases are decided, the terms will prove to be not very different from long-established practices.” However, Greider then read to Roh from that letter sent in April to US Trade Rep Robert Zoellick by 29 major US multinationals and industrial organizations that urges provisions in the FTAA that, like NAFTA, include “protection from regulations that diminish the values of investers assets”. It was at that point that Roh expressed the shock I noted in my previous post.

So, basically, I think we are left with the fact that the language in NAFTA is somewhat ambiguous and that the interpretation is still being fought over. However, there are some very powerful interests who are asserting that the interpretation ought to be a broad “regulatory takings” provision and that such a broad provision is being fought for by them in future trade agreements. So, where exactly has Greider led us astray here, Rick Jay?

P.S.—Mandelstam and I, as brilliant and insightful as we both are :wink: , cannot possibly do justice to Greider’s long and very detailed article, so for God’s sake, if we are going to have an intelligent discussion about it, you are going to have to read it. Otherwise you are going to end up pretty much arguing against straw men.

35

Whoops, simulpost…I see, RickJay, that you do now recognize this is an amended claim. I guess it is a fair question why Greider didn’t note that they had changed the main basis of their claim recently, but it is a long article that probably took a lot of research over many months and clearly Methanex itself has been rather pokey at getting around to changing all their info about the claim, so one can simply conclude that he didn’t have the latest info.

At any rate, the fact that Methanex has decided to pursue mainly another avenue on this claim does not change the basic thrust of Greider’s article which in fact documents that some of the people pushing the sort of expropriation language seem to have wanted it their as a “shield” to prevent them from egregious things such as clear discrimination against a foreign manufacturer but that there are others who are clearly trying to work it as a “sword” to fight for a more expansive view of regulatory takings. Greider’ whole point is to pressure corporations to back off on their interpretation of the “regulatory takings” provision in NAFTA. [Read the last paragraph of Greider’s article for a more eloquent take on this.]

36

jshore, you may be right about the original claim being different - here’s a link to the Notice of Intent of their original claim, which does not play up the discrimination angle. But I take exception to

Of course it does. The change in position by Methanex is presumably due to the fact that absent the discrimination issue the case is weak. By leaving this issue out, Greider presents a much scarier picture of NAFTA then the facts would warrant. (In fact, though he quotes others who seem to support his view, having seen his misleading presentation of the Methanex case I wouldn’t trust his presentation with regards to those either).

37

As I mentioned earlier, Greider wrote his article in October, more than half a year after the claim was updated. You would think that an award-winning journalist would, rather than use a raft of materials more than half a year old, at least check to see if any new information had come out in the last seven months, wouldn’t you? It would be appalling for any journalist to write a column in October 2001 using nothing but old information from March and before, and not bother to see if anything had changed in that long a span of time, wouldn’t it? I’m also still wondering why Greider seems to say that NAFTA threats had killed plain packaging tobacco laws in Canada when a cursory examination of the facts demonstrates that the NAFTA argument in that case was entirely rebutted, and the plain packaging laws were dropped for entirely different reasons. (Including, as I mentioned, a Charter of Rights and Freedoms challenge.)

I have no doubt at all that many corporations see expropriation as an opportunity to use NAFTA to their benefit, but I guess I’m a little unclear as to why it comes as a surprise to anyone that people would push the envelope of the law by making outrageous claims, or (as in the case of the plainpackaging laws) idle threats. Like it or not, any law’s limits will be tested; the behaviour of the jerks pushing the limit is not necessarily a good litmus test for the effect of the law as a whole.

The Canadian Charter of Rights and Freedoms, in fact, is a good counterexample; since it was signed into law in 1982, it has been cited and used in court to defend child molesters, child pornographers, drunk drivers, rapists, terrorists, and villians and scum of all kinds. It has been used to justify child porn, tobacco ads, and even murder. On some rare occasions people have gotten away with crimes, up to and including murder, with creative Charter arguments. The limits of the CCRF have been pushed to places nobody ever intended them to and have been used to thwart the democratically expressed will of the majority on MANY occasions. It has been used in ways its framers never anticipated or intended. Yet I don’t see the Council of Canadians protesting against it. Why is that? I’m sure you could say the same about various amendments to the Constitution of the United States.

Seven years after NAFTA we don’t seem to lack for environmental or health legislation. The majority of Mr. Greider’s article, as well as most similar theses, is based on slippery slope argumentation. That might not be wrong, but it’s not good logic and I don’t find it convincing, especially when critically significant facts are left out of the mix.

38

Sorry guys, (I think the rest of you participating in this thread are guys), this is becoming a killer time for me at work again. No one can figure out why Adobe’s software doesn’t like my new computer :(. However, I think we can get past that now that we know that Methanex amended the suit filed (though without updating their Q & A to reflect those changes).

Rick: “As I mentioned earlier, Greider wrote his article in October, more than half a year after the claim was updated.”

I agree. I should explain that I am a total fan of Greider’s work: have read two of his books, many of his Rolling Stone articles, and everything he’s ever written in The Nation. The man is an awesome writer and has a knack of elucidating complex subjects so that they seem simple. That’s why Rick’s calling him a liar took me to DefCon 4 ;). Since Greider is covering this issue as closely as any man, it’s hard to believe that he wasn’t aware of the amended claim. (Rick, I’m assuming that you’ve known about the amended claim for some time: i.e., that it’s not something that Methanex kept tightly under wraps until just a few weeks ago?)

Unless it was a case of a tightly kept secret, my best guess is that Greider doesn’t think the amended claim changes the case’s basic relation to “regulatory takings”. The Kent law analysis, as I’ve said, predicts that any win for Methanex under regulatory takings would have to hinge on showing that the exercise of an environmental law was discriminatory to them. Perhaps they reached the same conclusion and that sought to revise their case so as to show discrimination. However, if the basic gist of the case rests on regulatory takings, the case is still a regulatory takings case whether its subsidiary proofs hinge on discrimination, or a detailed consideration of losses of whatever. (Aside to Izzy: it doesn’t matter how many pages are devoted to discrimination; what matters is reading the case closely enough to know whether they’ve entirely dropped the “regulatory takings” reasoning of the original case, even if that only occupies one paragraph.)

Interestingly, I searched the New York Times archive: they covered the case in 1999 when it first came up and they noted alarms about NAFTA’s possibly needing revision on grounds similar to Greider’s. Yet they didn’t seem to bother to cover the amended case at all. For the purpose of judging Greider’s journalism, the relevant issue is: would Methanax have been able to sue the US government on grounds of discrimination alone (much less to do so with a secret tribunal)? Or would there have been no basis for a foreign corporation to sue a government for discrimination without also having a “regulatory takings” view of expropriation to which to tie that suit. If the answer is “No,” then Greider’s omission isn’t serious. (Although I still wish he’d added a sentence such as, "Methanex has since amended its case to foreground discrimination, but the essence of the case remains “takings.”) If the answer is, “Yes,” than Greider is indeed guilty of an important omission and I can’t begin to explain why he didn’t switch to using one of the 16 or so other cases that do illustrate his point.

“I’m also still wondering why Greider seems to say that NAFTA threats had killed plain packaging tobacco laws in Canada when a cursory examination of the facts demonstrates that the NAFTA argument in that case was entirely rebutted, and the plain packaging laws were dropped for entirely different reasons.”

I’m less concerned about that aspect. Greider’s article is very condensed–he’s making a huge and far-reaching argument in a few pages. He may have exaggerated the NAFTA element to illustrate a point; or his research may have been superificial. Journalists do sometimes make mistakes–even excellent ones. However whether Greider’s interpretation of what occurred is exaggerated or downright erroneous, the article isn’t about plain packaging. Rather, the article is about the kind of impact that NAFTA’s expropriation set-up up can have on government’s ability to regulate. It doesn’t take Sherlock Holmes to realize that with cases like Metaclad and Loewen (see the Public Citizen link posted below) as well as Methanex floating about, that threat of NAFTA lawsuit is going to be on the minds of legislators/government regulators.

“I have no doubt at all that many corporations see expropriation as an opportunity to use NAFTA to their benefit, but I guess I’m a little unclear as to why it comes as a surprise to anyone that people would push the envelope of the law by making outrageous claims, or (as in the case of the plainpackaging laws) idle threats. Like it or not, any law’s limits will be tested…”

Exactly. I think you miss the heart of Greider’s argument which is not to express naive surprise, but rather serious alarm. His message is precisely that the law’s limits will be tested, and that if the tests are successful, the results will be profoundly anti-democratic, and potentially damaging for domestic government as well as transnational public interests. Remember, FTAA’s extension of this stuff is being plugged by Bush and by major corporations as we speak.

“The limits of the CCRF have been pushed to places nobody ever intended them to and have been used to thwart the democratically expressed will of the majority on MANY occasions. It has been used in ways its framers never anticipated or intended. Yet I don’t see the Council of Canadians protesting against it. Why is that?”

I’m not sure what you expect to learn from my answering that question. I suppose that the Council of Canadians either a) feels that the benefits outweigh the costs or b) isn’t being vigilant enough or c) feels that there isn’t popular support to amend the law or d) feels that the legal intricacies of involved in proscribing bad use of the law are too great to make it a worthwhile enterprise.

But that need not be the case with NAFTA. Greider offers suggestions of what ought to be done. You seem to be reasoning that just because one law can go awry we must therefore simply accept that all laws will go awry–no matter what is at stake. You imply that we must always choose between either no law or laws that can be abused. That’s an unncessary choice.

Bear in mind: I think foreign corporationsshould have some means of protecting themselves against illegitimate expropriation. But this language has sneakily defined expropriation too widely, and the rulings are made in secret by appointed figures. That’s a recipe for a disaster and one that shouldn’t be spread.

"Seven years after NAFTA we don’t seem to lack for environmental or health legislation."

Seven years aint nothing in legal or social history, Rick.

*“The majority of Mr. Greider’s article, as well as most similar theses, is based on slippery slope argumentation. That might not be wrong, but it’s not good logic and I don’t find it convincing, especially when critically significant facts are left out of the mix.” *

Well I’m a trained historian and if you’ve ever done historical research you’d realize that what you’re calling “slippery slope argumentation” is the way most historical processes develop. It’s absurd to object to it on logical grounds: major sea changes in social policy don’t happen overnight. They evolve. You can see them coming. Also, in law has a special language for such things: “statute,” “precedent.” They are much more tangible than the slippery slope.

What’s distinctive here–a point which you still haven’t addressed–is that a doctrine that is not woven into the existing fabric of US law, a doctrine that is not likely to enjoy popular support, a radical doctrine that is not supported by a majority of US legislators or jurists has been sneaked through the backdoor under cover of something else and is now being used and applied through a tribunal process that outsiders can’t observe. That’s pretty scary! Moreover, it isn’t a left issue. I imagine that most of the center and a good chunk of the right would be very exercised about this issue if they understood it.

As to the persuasiveness of Greider’s article, we need not pretend that it exists in a vacuum. Take a look at the Public Citizen report. Read the original 1999 article in the New York Times (I can’t link it b/c you’d still have to pay $3 to look at it). Consider the portions of Greider’s article that don’t relate to Methanex or plain packaging: in particular the section on Epstein’s doctrine and its dissemination thus far. Consider how pernicious the precedent of having secret tribunals ruling on matters of broad public concern. (Imagine if the US government’s suit against Microsoft, for example, had been conducted in secret rather than public discussed and examined by the entire world.)

If you put aside your disgruntlement with Greider’s article (which I completely understand in light of what’s emerged), I think you’ll find that the basic problem is quite serious.

BTW, thanks jshore for coming in when you did. Apart from your always reliable provision of rhetorical and moral support, I shall now have to think of you as my link to the world of Adobe :wink:

39

I think there is a basic misunderstanding here, Mandelstam, of both discrimination and regulatory takings.
First, to answer your question, Methanex would not have a cause of action unless the regulatory takings occurred. So, a claim of discrimination itself would not avail Methanex.
But, that does not lessen the severity of Greidel’s omission. This is not an “either/or” situation; instead the discrimination is a necessary precondition under NAFTA to bring a regulatory takings case. Discrimination is never in and of itself a valid basis for a lawsuit under any circumstances - there has to be an injury caused by the discrimination. You do not have a cause of action against a stranger who calls you a racial epithet as you walk down the street. You do have a cause of action if your boss calls you the same epithet. In the second case, there are consequences - hostile working environment, you are probably not going to be promoted, etc., etc.
IOW, there are two steps - action violative of the law, and an injury caused by that violation.

In this case, had California banned both MBTE and whatever substance is derived from ADM’s ethanol, Methanex wouldn’t have a leg to stand on under NAFTA. (Whether they have a leg to stand on now depends on whether MBTE and the ethanol derivative are truly equivalent, and I have no idea what the answer is.) Had California banned both substances, there still would have been a “regulatory takings”, but no discrimination, thus no violation of NAFTA.

I get a sense from your post that you are offended by the very concept of “regulatory takings” as expropriation. To a large extent, I am too. However, you should know that “regulatory takings” is by no means a new concept invented by NAFTA. It has been around for a while, deriving from the Takings Clause of the US Constitution.
I confess to have forgotten the elements of a “regulatory takings” cause of action, but lawsuits brought under the theory abound - usually in the context where a government regulation prevents particular uses of land, and therefore lessens the value of that land (wetlands regulations is a huge area of dispute in this arena).

Sua

40

Sua, thanks for coming in here. I want to assure you that I understand fully that there has to be an injury for one to sue for damages over discrimination. I come from a long line of lawyers ;). But I appreciate your setting that forth nevertheless.

You wrote: “I get a sense from your post that you are offended by the very concept of “regulatory takings” as expropriation. To a large extent, I am too. However, you should know that “regulatory takings” is by no means a new concept invented by NAFTA. It has been around for a while, deriving from the Takings Clause of the US Constitution.
I confess to have forgotten the elements of a “regulatory takings” cause of action, but lawsuits brought under the
theory abound - usually in the context where a government regulation prevents particular uses of land, and
therefore lessens the value of that land (wetlands regulations is a huge area of dispute in this arena).”

I do know that regulatory takings has been around for a while because Greider’s article explains that. I really wish you would read the article–not b/c I don’t find your posts worthwhile as they are–but because you, as the only lawyer in this debate so far, are in a position to help us to clarify certain things. The article, I think, is really fascinating in its discussion of the legal context.

I realize that it’s not “either/or” and I apologize if my way of putting thigns gave that impression. What I meant is that if there is already some other statutory basis for foreign corporations to sue for damages based on discrimination–some other basis besides the “takings” reading of the expropriation articles in NAFTA–then I think Greider’s omission was serious. But if they’re still relying on takings I don’t think it’s especially serious because and only because his article is about regulatory takings under NAFTA. That’s his main concern. He spends only 2 paragraphs on Methanex and less than one on plain packaging.

Anyway, I really wish you’d read the article and let us know what you think of the whole thing. This would enrich our debate about the principle issues here, and get us off of what is at bottom a tangent on the quality of particular aspects of Greider’s journalism. The Greider article will take you maybe 1/2 hour to read, if that. The Public Citizen link provides a full summary that will take you five minutes.