Metalclad

[Ian Murray]

----------
From: "Mexico Solidarity Network" <[EMAIL PROTECTED]>

MEXICO SOLIDARITY NETWORK
WEEKLY NEWS SUMMARY
OCTOBER 22-28, 2001

[...]

4. MEXICO PAYS US$16 MILLION TO METALCLAD

In a closely watched case that expanded corporate legal rights under
the
NAFTA accords, the Mexican government paid US$16 million to the
US-based
Metalclad Corporation.  The payment settled a long-standing lawsuit
and was
widely seen as an effort by the Fox administration to appease
international
investors.

In 1995, Metalclad purchased a hazardous waste processing facility in
the
central Mexican state of San Luis Potosi.  Metalclad intended to clean
up
the site and expand the plant to handle hazardous waste from the US.
During
the licensing process, an environmental impact study discovered that
the
plant was located directly above the local aquifer.  The local
government
declared the area an ecological preserve in an effort to protect the
only
source of fresh water in the area, and Metalclad was unable to obtain
the
necessary government permits for expansion.  Metalclad sued the
Mexican
government for US$100 million under NAFTAís chapter 11, which allows
private
corporations to sue governments for loss of future potential profits.
A
secret three-member NAFTA tribunal decided the case in favor of
Metalclad,
awarding the corporation US$16 million.  Initially Mexico disagreed
with the
decision and refused to pay, but apparently behind-the-scene pressure
from
investors and US officials convinced the Fox administration to settle.
The
case sets an important precedent under Chapter 11 and expands the
ability of
private corporations to challenge environmental regulations in all
three
NAFTA countries.

This report is a product of the Mexico Solidarity Network.
Redistribution is authorized and encouraged provided that the source
is
cited.

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