What is at stake?
The North American Free Trade Agreement (NAFTA), Chapter 11, deals explicitly with investment (rather than trade) and most importantly includes a mechanism for dealing with "investor-state" disputes. These are disputes between corporations and governments, and they allow foreign corporations to sue governments directly whenever they think their "rights" have been violated by a particular government measure, regulation or public interest legislation. Corporations have used chapter 11 to challenge environmental laws, municipal land-use controls, water protection measures, activities of public service providers like Canada Post and even the decisions of juries and appellate courts.
Why are we challenging Chapter 11?
We are NOT talking about dispute between a government a company over a breach of contract or about a traditional “expropriation” of private assets. NAFTA goes much further. The key to the investor-state provision is NAFTA's extremely broad definition of "expropriation." By narrow legal definition, expropriation means the actual "taking" of private property, almost always land. But a well-organized effort by corporations in the US during the Reagan era led to a series of Supreme Court decisions that expanded this narrow legal definition to include what is now called "regulatory taking." This definition now includes any government regulatory action (law, regulation, rule or policy) that reduces the commercial value of an investment or the expected profit from an investment - including future profits. This new definition of expropriation has found its way into NAFTA's Chapter 11. In effect, Chapter 11's dispute settlement provisions give foreign corporations the right to directly enforce an international treaty signed by sovereign governments, under which the corporations have absolutely no obligations. This underlines the fact that these trade agreements are primarily aimed at restricting governments from regulating or controlling corporations.
NAFTA Constitutional Challenge fact sheets (PDF):
