In today’s Globe and Mail, Jim Stanford is upset at how the BC govt handled their teachers’ strike: legislation, fines, etc. This is of course a defensible and understandable position for someone who works for a union, but he lets his indignation get the better of him when he reaches for the NAFTA Chapter 11 Booga-Wooga Stick^TM:

What the workers need is Chapter 11 (subscription req’d): NAFTA’s Chapter 11 allows corporations to sue governments for any policy change held to undermine their future profits (defined broadly as "expropriation"). Corporations have sued governments over everything from environmental regulations to postal delivery. Canada has been targeted the most.

Here is the chapter is question, and here’s how it’s been applied. A quick look disposes of that last claim fairly quickly. If you discard notices to claim that were subsequently withdrawn, then Canada has been targeted the least. And even if you don’t, we come in second.

There’s no reading of Chapter 11 that suggests that firms can sue the Canadian govt to compensate for a policy change that cost them profits; they have to show that they were treated worse than Canadian-based firms.

So how has Chapter 11 played out? Since 1995, the federal government has received 11 ‘Notices of Intent to Submit a Claim to Arbitration’ from US-based corporations. Of these,

• four have yet to submit a claim,
• three made claims and then withdrew them,
• one file is active (UPS),
• one claim was rejected,
• one claim was settled before it came to arbitration, and
• one claim was upheld.

That’s it. In 10 years, US corporations and their hordes of lawyers have managed to achieve precisely ONE victory under Chapter 11.

That victory was the S.D. Meyers case. From what I can tell, this is exactly the sort of case that Chapter 11 was designed to deal with: a ministerial order that ran counter to what her own officials advised, but which served the interests of a Canadian competitor. Can anyone think of a good reason why PCBs should be sent 3500km from Toronto to Alberta for disposal instead of the 500km to Cleveland?

Shaking the Chapter 11 Booga-Wooga Stick^TM is a widely-used rhetorical device. Speculating about why that is so appears to be a depressing exercise: one that I’ll deal with another time.