U.S. Dodges Bullet on NAFTA Glamis Case

Mining Firm's Claim Had Major Flaws, But Four Foreign Investor Cases against U.S. Totaling Over $6 Billion Still Pending

Posted: 6/9/2009

WASHINGTON, D.C. – A NAFTA tribunal's dismissal of Glamis Gold Inc.'s challenges against California's mining regulations is not surprising given severe flaws in Glamis' claim and the fact that the ruling does nothing to remedy the serious problem of NAFTA providing foreign investors special rights to attack domestic health and environmental laws, Earthjustice, Earthworks, Public Citizen and Sierra Club said today.

The panel's decision in the Glamis case does not affect the outcome of the four other NAFTA challenges pending against the United States in which foreign investors are demanding more than $6 billion in U.S. taxpayer compensation. The Glamis case attracted considerable attention because it involved a firm claiming to be a Canadian foreign investor under NAFTA in order to file a challenge over a mining claim available only to U.S. residents that it had acquired through its domestic subsidiary. Further, Glamis claimed that California mining regulations had caused an indirect taking of the mining claim's value and thus NAFTA required the firm to be compensated. Yet, in fact, Glamis remained free to sell its valuable mining rights or to operate the mine following California's mining laws.

"It is no surprise that this long-delayed NAFTA case was dismissed given the major flaws in Glamis' claim. In addition, there would have been serious political ramifications if a foreign corporation had been able to use NAFTA to be awarded millions of our tax dollars because it did not want to comply with non-discriminatory mining regulations that protect public health, the environment and the cultural and religious practices of an Indian tribe," said Lori Wallach, director of Public Citizen's Global Trade Watch division. "Today's dismissal does nothing to fix the underlying problems with U.S. trade agreements' foreign investor rights rules, which are replicated in the leftover Bush trade pacts with Panama, Colombia and Korea the Obama administration inherited."

"Happily for California's taxpayers and environment, the panel ruled against Glamis' attempts to avoid having to play by the same rules as everyone else," said Margrete Strand Rangnes, director of the Sierra Club's Responsible Trade program. "But the fact that Glamis' claim was even possible, that a foreign company could try to undermine U.S. environmental laws in the name of higher profits, shows why our trade agreements' foreign investor rules must be altered."

Although the NAFTA tribunal dismissed Glamis' demand for taxpayer compensation, the Canadian firm still maintains its mining claims in southern California's Imperial Valley. Earthjustice, Earthworks, Public Citizen and the Sierra Club support the Quechan Indian tribe's efforts to ensure that Glamis does not harm sacred Quechan lands in California's Imperial Valley.

Continue reading the full press release (PDF).