Green Mayor of Santa Monica makes NY Times - 2 parts
- part 1 of 2 parts
mike feinstein, the green party's mayor of santa monica, is interviewed
regarding nafta. he is mentioned a little more than 1/2 thru the article.
unfortunately the green party is never mentioned in the article.
if you go to the nytimes webpage, there's even a nice picture of mike in the
middle of a lotta blue-green machinery: the water power plant perhaps.
March 11, 2001
Nafta's Powerful Little Secret
By ANTHONY DePALMA
Their meetings are secret. Their members
are generally unknown. The decisions they reach need not be
fully disclosed. Yet the way a small group of international
tribunals handles disputes between investors and
foreign governments has led to national laws being revoked,
justice systems questioned and environmental regulations
challenged. And it is all in the name of protecting the rights
of foreign investors under the North American Free
The corporations — American, Canadian and Mexican
alike — that directly invest in neighboring countries are
thrilled that Nafta provides some protection. But foes of the
trade pact say some of their worst fears about
anonymous government have become reality. And as Western
economies move toward more free trade and globalization,
environmentalists, consumer groups and anti-trade organizations
are increasingly worried about how the tribunals
influence the enforcement of laws. The groups are gearing up
for a fight at the Summit of the Americas next month in Quebec,
where President Bush will be pushing a vast new Free
Trade Area of the Americas, which would provide for similar
Protesters will attack the sweeping powers and
broad impact of the tribunals, along with their very nature —
ad hoc panels drawn from lists of academics and international
lawyers almost unknown outside their highly specialized fields.
"What we're talking about here is secret
government," said Joan Claybrook, president of Public Citizen,
a consumer watchdog group in Washington that has been critical
of Nafta and other trade agreements. Ms. Claybrook said the
16 Nafta cases that have been filed so far in the
United States, Canada and Mexico showed how corporations were
using Nafta not to defend trade but to challenge the
functioning of government. "This is not the way to do the
public's business," she said.
The tribunals have been used in Nafta disputes for only a few
years, but the complaints they have handled have already had many
repercussions, including these:
• The Canadian government lifted restrictions on manufacturing
an ethanol-based gasoline additive that it considered hazardous after an
American manufacturer said that the ban hurt its business.
• A tribunal ordered Mexico to pay an American company $16.7
million after finding that local environmental laws prohibiting a
toxic-waste-processing plant that the company was building were tantamount to
• A Canadian-based funeral company is asking the United States
government for $725 million in compensation after a Mississippi jury found
the company guilty in 1995 of trying to put a local funeral home out of
business, and levied $500 million in damages. The company contends that the
jury sought to punish it because it is foreign. If the tribunal awards
compensation, critics say, all jury awards involving foreign investors may be
• United Parcel Service, the package-delivery company, has
filed a complaint contending that the very existence of the publicly financed
Canadian postal system represents unfair competition that conflicts with
Canada's obligations under Nafta.
Critics worry that if the tribunal upholds the U.P.S. claim,
government participation in any service that competes with the private sector
will be threatened.
It is clear that investors have gained a shield far more
powerful than almost anyone had imagined when Nafta was written in the early
1990's. "There is no doubt that these measures represent an expansion of the
rights of private enterprises vis- à-vis government," said Prof. Andreas F.
Lowenfeld, an international trade expert at the New York University School of
Law. "The question is: Is that a good thing?"
The international tribunals are authorized under a Nafta clause
called Chapter 11, dealing with investments. Investors who believe they have
suffered a loss because of a breach in Nafta rules can bring a claim against
the government of the country where they made their investment. They can have
the complaint heard under one of two existing sets of rules — one from the
United Nations, the other from an independent office of the World Bank.
These off-the-shelf mechanisms adopted by Nafta have commonly
been used to resolve private disputes between corporations, and are thus
intended to provide a great degree of confidentiality. Both critics and
proponents agree that the provisions run headlong into demands for openness
and accountability when public issues are involved.
"The fact that the drafters of Nafta chose this secretive
process to resolve these disputes is further evidence that they weren't
foreseeing matters of broad social concern coming before these panels," said
Martin Wagner, director of international programs for the Earthjustice Legal
Defense Fund, an environmental group in San Francisco.
Critics say the corporate victories have spawned even bolder
and broader challenges, each one further undermining public policy. In a
recent case that critics consider one of the most worrisome, the Methanex
Corporation of Vancouver, British Columbia, is challenging California's
decision to phase out the use of a gasoline additive containing methanol,
which Methanex makes. The state considers the additive, MTBE, which was
originally intended to reduce air pollution from motor vehicle emissions, to
be a health hazard when it enters the water supply. Santa Monica, Calif.,
with 93,000 residents, had to shut down most of its municipal wells when
gasoline containing MTBE leached into the drinking water a few years ago.
Methanex contends that MTBE poses absolutely no health hazard
and that the state's action would effectively destroy its market. "The work
that was done to make the decision to move forward with the ban wasn't
extensive enough to draw the conclusion that MTBE is hazardous," said Bradley
W. Boyd, director of investor relations at Methanex.
The company recently amended the claim to include accusations
that a decision by Gov. Gray Davis of California to ban the additive might
have been politically motivated and linked to more than $200,000 in campaign
contributions by the Archer Daniels Midland Company, which makes a competing
product. A spokesman for the governor, Gabriel Sanchez, called the
Mr. Boyd said Methanex was not asking for the ban to be lifted,
but rather for Methanex to be compensated if it was prevented from doing
business in California because of the ban. The company wants $970 million in
compensation, which rankles many Californians.
"It's the height of corporate moxie," said Michael Feinstein,
an environmental activist who is the mayor of Santa Monica. He said he was
worried that a precedent would be set if the MTBE phase-out was undermined.
Even if the tribunals have no power to overturn laws, he said, a decision in
Methanex's favor "would have a devastatingly chilling effect on all such
future laws and standards because of the belief that they would not stand up
The United States government, named as a defendant in the
Methanex complaint, is also concerned that the case stretches Nafta beyond
recognition. In a statement to the tribunal, the government contends that
"Methanex's claim does not remotely resemble the type of grievance for which
the states parties to the Nafta created the investor-state dispute mechanism."
Mr. Wagner has asked the tribunal to consider breaking with
tradition and accepting written statements from third-party groups like the
Bluewater Network, a citizens' environmental organization. The three- person
tribunal hearing the complaint is unusual in that its members include former
Secretary of State Warren Christopher. The tribunal determined in January
that it had the right to accept written arguments, and said it would decide
later whether to do so in this case.