Dear RN list, Sept. 10
If anyone ever doubted that the forces behind corporate globalization put
their right to engage in any type of commerce over the right of people and
the earth not to be poisoned, the following items should serve to make them
think twice.
all the best, Jan
Date: Fri, 28 Aug 1998 20:12:19 -0400
From: Eric Fawcett <•••@••.•••>
Subject: s4p-13: NAFTA [soon MAI?] MMT-Ethyl/Canada & Metalclad/Mexico
STOP PRESS: "U.S. firm hits Ottawa with NAFTA lawsuit"
Globe and Mail, August 21, 1998, section B1
I don't have this item on file, so I'll just give salient information:
"An American company has hit the federal government with another NAFTA
lawsuit. Ohio-based S.D. Myers Inc., a company that treats transformers
contaminated with PCBs, has told Ottawa that it plans to submit a claim
under NAFTA for compensation for the 1995 ban on PCB exports to the USA."
***************************************************************************
Part I: "Running on MMT"
by George Monbiot, Guardian (London), Thursday August 13, 1998
Three weeks ago, something happened in Canada. It could not have been
very important because hardly anyone on this side of the Atlantic is even
aware that it took place.
A total of four column inches in the British newspapers was devoted to
the event. The handful of people who bothered to read them would have
learnt that a company no one has heard of, which makes a product whose
name no one can pronounce, received some money from the Canadian
government and an assurance that it could continue making the product.
It is the butterfly's wing over North America that will cause ahurricane
in Europe.
The company is called the Ethyl Corporation, and its product is a
chemical called methylcyclopentadienyl manganese tricarbonyl, or - and
let us thank God for acronyms - MMT. MMT is a fuel additive which is mixed
with petrol to prevent engine knocking. Many scientists believe it is
also a dangerous neurotoxin. Manganese entering the body through the
lungs causes nerve damage, which can lead to psychosis, memory loss and
early death.
Until last year, Canada was the only country on earth in which MMT was
sold. It is legal to sell it in most of the US - but surveys suggest
that suppliers will not stock it, not least because it appears to
damage car engines, causing the release of other pollutants.
Canadian MPs questioned why their citizens should be exposed to this
peculiarly unpleasant species of pollution. After a long and
intelligent debate, the parliament voted to ban it in April 1997. Had
the vote taken place three years earlier, the Ethyl Corporation would
have had to abide by the decision. A sovereign parliament had decided
to protect its citizens from a deadly poison, and that, you would
imagine, would have been the end of the matter.
But, since 1994, corporations in Canada, the US and Mexico have
enjoyed a new and astonishing power over elected authorities. The
North American Free Trade Agreement (Nafta) entitles companies to sue
governments they believe to be raising unfair barriers to trade.
Ethyl sued the Canadian government for the "expropriation" of its
"property" (namely its anticipated profits) and the "damage" to its
"good reputation" caused by the parliamentary debate. It took its suit
to NAFTA, where a secret tribunal - whose records are not disclosed
and whose decisions cannot be appealed - began to assess the case.
Last month, the Canadian government, realising that its chances of
success were approximately zero, settled with Ethyl. It agreed to allow
the corporation to resume sales of MMT in Canada. It agreed to pay Ethyl
$13 million in compensation. It agreed, too, to mislead its citizens.
Upon settling, it announced that "MMT poses no health risk".
So what has any of this got to do with us? Well, the NAFTA rules
allowing the Ethyl Corporation to sue the Canadian government are
almost identical to the provisions of the Multilateral Agreement on
Investment which, if passed, will allow corporations to sue the
governments, such as Britain's, which sign it. This is not surprising,
because the MAI was modelled on NAFTA, to "harmonise" investment
standards in the rest of the world with North America.
For the past year and a half, British ministers have been assuring us
that the MAI does "not affect the rights of signatories to carry out
normal regulation", that it will "weaken neither environmental
regulation nor worker protection" and that it contains "nothing . . .
that gives investors the right to be compensated for lost profits".
Far from undermining domestic legislation, it simply establishes that
foreign investors should be treated no less favourably than domestic
investors.
Yet MMT was banned in Canada irrespective of who produced it: the
rules were precisely the same for foreign and domestic investors.
This, as campaigners predicted, offered no protection at all to the
sovereignty of the Canadian parliament.
In March this year, a ragged band of voluntary bodies and direct
activists won an extraordinary victory against the MAI. By exposing
the monumental threat to democracy it posed, they forced the
governments engaged in secret negotiations to postpone the agreement.
Now Britain and the other negotiators are trying again. Again they
will tell us that it presents no threat to the democratic process.
Again they will tell us that it will not undermine the protection of
workers, consumers or the environment. And again they will be wrong.
********************************************************************
Part II: MMT & Ethyl Case-- Trade lawyer expresses concern
Here is the perspective of a trade lawyer who was briefly
consulted on this case back in 1995 who, now that the case is
settled, feels free to speak out with great concern over the far
reaching precedent of this case.
The Financial Post, Tue 28 Jul 1998, p. 13
`EXPROPRIATION' TAKES ON NEW MEANING: MMT case sets far-reaching precedent
...<snip>
But the main reason I thought a trade case would be problematic in
1995 was because the investor-state arbitration provisions of
NAFTA seemed confined to cases where governments took assets away
by direct action and refused to compensate the investor. Having
closely watched the evolution of these provisions in the trade
agreement negotiations, and having once been involved as a
government lawyer in settling several international expropriation
claims, I thought there had to be this essential element of a
``taking.''
The intelligent and astute counsel to Ethyl Corp. has proved,
however, the legal concept of expropriation and the protection
afforded under NAFTA provisions go beyond these traditional legal
concepts. The MMT case has thus emerged as one of the most
important in the annals of Canadian trade law. Even though it was
settled out of court, it has established a far-reaching precedent.
It illustrates governments are at peril if they adopt measures
having the ``effect'' of expropriating foreign-owned assets,
directly or indirectly. It shows using trade instruments to
achieve public policy goals must be meticulously thought out and
supported with impeccable scientific backstopping. Even then,
there must be no hint of discrimination in the proposed measure.
But whatever the substantive pros and cons of these NAFTA
provisions, a serious procedural shortcoming persists. I am
concerned, as are several other trade lawyers, that the agreement
allows these disputes to be dealt with entirely behind closed
doors, merely if one of the parties requests it. This is what
happened in the MMT case.
Such in-camera proceedings are undesirable. In arbitrations with
governments over important matters of law and public policy, there
must be openness and transparency, as in the courts. Whatever the
risks of the NAFTA investor-state provisions, at the end of the
day public confidence in the system can only be safely assured
through full disclosure and accessibility.
The problem with the MMT case is, with the secrecy permitted under
NAFTA, we will never know the full story.
**************************************************************************
Part III: "The metalclad case"
In January 1997, the U.S.-based waste disposal company Metalclad Corporation
filed a complaint with the International Center for the Settlement of
Investment Disputes (ICSID), alleging that the Mexican state of San Luis
Potos¡ violated a number of provisions of NAFTA when it prevented the
company from opening its waste disposal plant. Metalclad took over the
facility, which had a history of contaminating local groundwater, with the
obligation that it clean up preexisting contaminants. After an environmental
impact assessment revealed that the site lie atop an ecologically sensitive
underground alluvial stream, the Governor refused to allow Metalclad to
reopen the facility. Eventually, the Governor declared the site part of a
600,000 acre ecological zone. Metalclad claims that this action effectively
expropriated its future expected profits and seeks $90 million in damages.
This figure is larger than the combined annual income of every family in the
county where Metalclad's facility is located.
Environmental zoning has been attacked, especially in the U.S., by "property
rights" activists (also known as the "takings" movement), who seek
compensation for complying with environmental regulations. In a vein similar
to that of Ethyl Corp.s' claims, Metalclad is claiming that the zoning law
constitutes an effective seizure of the company's property - a seizure that,
under the property rights extended by NAFTA, requires that the offending
government compensate the company. While Metalclad would have a very
difficult time convincing a U.S. court that the "taking" is compensable, the
broad language of the NAFTA expropriation provision sets a higher standard
for investor rights.
...<snip>
The Metalclad case raises other alarming questions. Metalclad claims the
Mexican federal government is (unofficially) encouraging the company's NAFTA
lawsuit so that it can deflect the political fall-out of forcing the state
to open the facility. The local community -- still reeling from water
contamination resulting from the illegal storage procedures of the
facility's previous owners -- was never consulted about the possibility of
reopening the facility by either the federal or state governments or
Metalclad, and vehemently opposes locating a toxic waste dump in its area.
If Metalclad's claim that the Mexican federal government supports the suit
is indeed accurate, this case raises the disturbing possibility that
investors can use their rights to collude with governments to force
unwanted, or even dangerous investments on unwilling populations. A
spokesman for Metalclad states, "I don't know of anything the federal
government could have done and didn't do, short of sending the army in"
(Millman, Joel. "Metalclad Suit is First Against Mexico Under NAFTA Foreign
Investment Rules," The Wall Street Journal, October 14, 1997, p. A2, A11.).
It remains to be seen whether the facts bear out the claims and
counterclaims. But until this case is decided, MAI negotiators must keep in
mind the possibility that some national governments could use the agreement
to run roughshod over the will of their citizens.
...<snip>
------------------------------------------------------------------------
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*****************************************************************************
Date: Mon, 17 Aug 1998 16:40:46 -0500
From: Mark Douglas Whitaker <•••@••.•••>
Subject: historical parallel: lead in gasoline then, MMT now--same
politics, different strategy
Hello,
If you like, this is a companion piece to the MMT story I forwarded
this afternoon. Plus ca change? I wrote this several months on another list.
This MMT is a good test case and foreshadowing of what kinds of
things we will be getting as out "MAI heritage" for generations to come.
Regards,
Mark Whitaker
University of Wisconsin-Madison
At 09:28 AM 4/22/98 -0500, you wrote:
>From: Brad De Long, University of California - Berkeley
> •••@••.•••
>
>
>Steven Harvey, University of New Mexico •••@••.••• wrote:
..<snip>...
>
>Technology is truly neutral. It magnifies human powers of action for good
>*and* for evil. If you think that on balance humans have more good than
>evil in them, you should think that technological progress is a good bet.
I would posit that your line of arguments for the neutrality of
technology is in error. By way of a short demonstration, I would like to
show how your rhetoric has many historical parallels. Especially within
capitalism, with its reliance on 'markets' and 'progress' as the abstract
forces which create social change, it usually gets lost in transmission that
technology is produced by interests as well as technological acceptance is
highly political. Technological production is only as neutral as ideological
production makes it out to be.
Progress of whom and for what? However I feel about 'Luddites,' or
"Nazi-like" people to use your phrase, I have neglected much of my
historical understanding if I failed to realize that people have been
kicking and screaming since the early 1800's against not technology, per se,
but particular interests represented in technological development, which
have called themselves alternately, 'neutral' or 'efficient.' And since the
late 19th century, most of the West's technological drive is performed in
privatized research facilities which are inherently geared towards
particular interests, and is very capital intensive, and thus has a series
of filters it has to pass through (satisfy) before ever getting to the wider
'us' of the market. And even Adam Smith didn't care for what we have hence
come to know as urban industrial production or its technologies (1).
What generally occurs in technological production is a great deal of
attempting to control how the technology is viewed. General Motor's
president in the 1920's, Alfred Sloan, said he saw his role as "not for
basic transportation, but for progress in comfort, convenience, and style."
The way that this comfort and style were accomplished was though cars which
used tetraethyl gasoline, classified at the time as an industrial toxin.
What occurred, like so much of technological production within capitalism,
is that the chemical was subsequently redefined as benign. Despite wide
public and scientific horror, and governmental health outcry. General
Motors, which enjoyed an interlocking directorship with the DuPont
Corporation at the time, made a deal with Standard Oil to produce the
tetraethyl lead. Standard Oil attempted first to get a 'neutral body' like
the Bureau of Mines to conduct a report which said that the industrial toxin
tetraethyl lead was 'safe,' despite concern that the short-term experiments
and exposures were an unsuitable manner of studying the poison. This study
by a government body was paid for by the oil company. There was an accident
in the Standard Oil experimental research facility in New Jersey in which
80% of the workers in the facility died or were severely poisoned by lead.
The company doctor was quoted in the New York Times as saying, "nothing
ought to be said about this matter in the public interest." One of the
supervisors of the facility said "these men probably went insane because
they worked too hard." The vice-president of General Motors, Midgely, known
as the "Father of Ethyl Gas," had an attendant at a press conference bring
in a quantity of pure tetraethyl which he poured on his hands saying, "I'm
not taking any chance whatever. . .Nor would I take any chance doing that
every day." The previous year he had to take a "prolonged vacation in
Florida in order to cure himself of lead poisonings." At a hearing held by
the United States Surgeon General, the pro-lead lobby was questioned about
the health risks. They changed the subject and described tetraethyl lead as
"a gift of God,' and "essential in our civilization,' among other things.
"By casting the issue in this way, Howard [the representative of Ethyl
Gasoline Corporation, the subsidiary of Standard Oil] put the opposition on
the defensive, making them appear to be reactionaries whose limited vision
of the country's future could permanently retard progress and harm future
generations.
They also argued that with any "great advance" comes "sacrifice."
Further "objective" studies were called for. The long term studies were not
carried out, and we were poisoned for approximately 50 years, especially
urban residents.
The next time someone calls you a reactionary, tell them they may not
even have their own interests at heart in the long run. Technological
production and progress, especially in capitalism, is a highly contentious
political process. It is only with a well balanced assessment of the risks
from all sides that technology could potentially seen as 'progressing'
anywhere. Technology is not 'neutral' from the start. It progresses toward
neutrality with the influence of varied political interests. Without input
from all interests though, I am afraid that technology is not 'neutral.'
This input rarely, if ever, happens in capitalism, so the use of the term
neutrality is unjustified. I would gladly take comments for candidates for
'technological neutrality,' and I feel confident that the term is basically
an oxymoron in the way it is widely used in discrediting a voiced concern
with cries of technological neutrality. Only society as a whole gets to
determine what is neutral. By itself, neutrality is rather a strange
defense, because it trumps the argument instead of addressing social
concerns. One-sided portrayals of technology as neutral are conceivably more
"Nazi-like" than those who are voicing their concern, if you think about
it.. I would recommend that he read some Albert Hirschman. (3)
Instead of taking Brad DeLong's above comments seriously, I would
take them with a grain of lead.
Mark Whitaker
University of Wisconsin-Madison
_________________
(1) Berg, Maxine. 1986. The Age of Manufactures, 1700-1820. Oxford:
Oxford University Press.
(2) Rosner, David and Gerald Markowitz. 1985. "A 'Gift of God'? The Public
Health Debate Controversy over Leaded Gasoline during the 1920's," American
Journal of Public Health, April, v. 75(4), pp. 344-352.
(3) Hirschman, Albert. 1967. Exit, Voice, and Loyalty. Harvard: Harvard
University Press. (especially Chapter Eight, "Exit and Voice in American
Ideology and Practice,' pp. 106-109.)
