QUERY: class action suits using NAFTA courts? and William Grieder articl

Hello,
        It seems to me that the more consumptive globalization the world 
receives,
the more a Chiapas-like judicial framework is required (or what they are
attempting to do): a more **geographic specific court level** as the
highest (or strengthed) court--to work against globalization's co-option of
the higher courts.] The following article has a nice summary of examples of
the way corporate globalization uses the creation of its own courts--which
citizens lack all access to--to enforce itself upon us. 
        I was curious: perhaps a class action suit using NAFTA courts against
corporations would be an interesting test of whether this is entirely one
sided? It would be a great PR move, exposing the bias, regardless of the
outcome either way. Any examples of using NAFTA courts in this citizenship
way? I know that there are class action suits of Hondurans against American
corporations in *American courts*, though has any group attempted to press
the issue of 'short-circuiting' these NAFTA courts against corporate
globalization?
        

Regards,

Mark Whitaker
University of Wisconsin-Madison


FYI-
===============
Will corporations trump nations?

As NAFTA¹s reach expands, so do its threats to democracy

By William Greider
THE NATION
April 17, 2001

When NAFTA was adopted in 1993, Chapter 11 in the trade and
investment agreement was too obscure to stir controversy. Eight years later,
it¹s the smoking gun in the intensifying argument over whether globalization
trumps national sovereignty. Chapter 11 established a new system of private
arbitration for foreign investors to bring injury claims against
governments. As the business claims and money awards accumulate, the
warnings from astute critics are confirmed, NAFTA has enabled multinational
corporations to usurp the sovereign powers of government, not to mention the
rights of citizens and communities.

                THE ISSUE HAS exquisite resonance with the present moment.
On
April 20, 34 heads of state gather in Quebec City to lead cheers for a Free
Trade Area for the Americas. The FTAA negotiations are designed to expand
NAFTA¹s rules to cover the entire western hemisphere. The Quebec meeting
should provide good theater but not much substance. Tony Clarke of the
Polaris Institute, in Ottawa, says the meeting is intended to be "a facelift
for the whole global agenda, by portraying free trade as democracy."
Protesting citizens will be in the streets, challenging 6,000 police and
Mounties, with an opposite message: Democracy is threatened by the corporate
vision of globalization.

        Chapter 11 of NAFTA should become a defining issue for FTAA
negotiations. Many, including Clarke, vice chairman of the Council of
Canadians, believe corporate governance was and is the FTAA¹s intent. ³There
is a conquering spirit at the heart of all this,² he says, adding that the
corporations¹ attitude is: "We have to get into every nook and cranny of the
world and make it ours."

                Chapter 11 provides a model of how this might be
accomplished. The operative principle is that foreign capital investing in
Canada, Mexico and the United States may demand compensation if the
profit-making potential of their ventures has been injured by government
decisions, "tantamount to expropriation." Thus, foreign-based companies are
given more rights than domestic businesses operating in their home country.

  For example:
  California banned a methanol-based gasoline additive, MTBE, after the EPA
reported potential cancer risks and at least 10,000 groundwater sites were
found polluted by the substance. Methanex of Vancouver, B.C., the world¹s
largest methanol producer, filed a $970 million claim against the United
States. If the NAFTA panel rules for the company, many similar complaints
are expected, since at least ten other states followed California¹s lead.
The federal government would have to pay the awards. California State Sen.
Sheila Kuehl and others have asked the U.S. Trade Representative to explain
how this squares with a state¹s sovereign right to protect health and the
environment.

  In Mexico, a U.S. waste-disposal company, Metalclad, was awarded $16.7
million in damages after the state of San Luis Potosiacute blocked its waste
site in the village of Guadalcazar. Local residents complained that the
Mexican government was not enforcing environmental standards and that the
project threatened their water supply. Metalclad¹s victory established that
NAFTA¹s dispute mechanism reaches to subnational governments, including
municipalities.

  In Canada, the government banned another gasoline additive, MMT, as a
suspected health hazard and one that damages catalytic converters, according
to auto makers. The Ethyl Corporation of Virginia, producer of MMT, filed a
$250 million claim but settled for $13 million after Canada agreed to
withdraw its ban and apologize.

  The Loewen Group Inc., a Canadian operator of far-flung funeral homes,
lodged a $750 million complaint against the United States, claiming that a
Biloxi, Mississippi, jury made an excessive award of $500 million when it
found Loewen liable for contract fraud against a small local competitor.
  Sunbelt Water Inc. of California has filed the largest and most audacious
claim ‹seeking $10.5 billion from Canada for revoking its license to export
water by supertanker from British Columbia to water-scarce areas of the
United States.

  Canada¹s Mondev International is claiming $50 million from the United
States because the City of Boston canceled a sales contract for an office
building with a shopping mall. Boston invoked sovereign immunity against
such lawsuits and was upheld by a local judge and the Massachusetts Supreme
Court. The U.S. Supreme Court declined to hear the appeal. So the company
turned to NAFTA for relief.

INVESTORS RULE
        "When just the threat of a Chapter 11 action may suffice to wrest a
financial settlement from a government, investors have unprecedented
leverage against states," Lydia Lazar, a Chicago attorney who has worked in
global commerce, wrote in Global Financial Markets magazine. Mexico, Canada
and the United States effectively waived the doctrine of sovereign immunity,
she explained, when they signed NAFTA.

        As many as 15 cases have been launched to date, but no one can be
sure of the number, since there¹s no requirement to inform the public. The
contesting parties choose the judges who will arbitrate, choose which issues
and legal principles are to apply and also decide whether the public has any
access to the proceedings. The design follows the format for private
arbitration cases between contesting business interests. With the same
arrogance that designed the WTO and other international trade forums, it is
assumed that these disputes are none of the public¹s business ‹even though
public laws are under attack and taxpayers¹ money will pay the fines.

The core legal issue is described as damage to an investor¹s
property-property in the form of anticipated profits. The NAFTA logic thus
establishes the "regulatory takings" doctrine the right has promoted
unsuccessfully for two decades-a retrograde version of property rights
designed to cripple or even dismantle the administrative state¹s regulatory
powers. ³NAFTA is really an end run around the Constitution,² says Lazar.

        The fundamental difference in Chapter 11, unlike other trade
agreements, is that the global corporations are free to litigate on their
own without having to ask national governments to act on their behalf in
global forums. Clearly, some of the business complaints so far are more
exotic than anyone probably anticipated. These initial cases will set
precedents, however, that major global firms can apply later. If nobody
stops this process, the national identity of multinationals will become even
weaker and less relevant, Lazar points out, since they have status to
challenge government as "an open class of legal equals."

WHAT DOES BUSH KNOW?
        In Canada a private lawsuit was filed recently challenging the
constitutionality of Chapter 11, since Canada¹s Constitution states that the
government cannot delegate justice to other bodies. The Canadian government,
itself embarrassed by the cases against it, expressed doubt that Chapter 11
should be included in the hemispheric agreement, though it appears to be
backing away from outright opposition. In U.S. localities, the cases are
beginning to stir questions, but lawmakers and jurists are only beginning to
learn the implications.

        Does George W. Bush understand what he is proposing for the
Americas?
Did Bill Clinton and Bush the elder understand the fundamental shift in
legal foundations buried in NAFTA¹s fine print? They knew this is what
business and finance wanted. As the public learns more, the smoking gun
should become a focal point in this year's trade debate, confronting
politicians with embarrassing questions about global governance. Who voted
to shoot down national sovereignty? Who crowned the corporate investors the
new monarchs of public values?
---------
William Greider is a columnist for The Nation, where this essay originally
appeared.