As you read the following article, notice that the corporate 'bottom line'
and stockholders' equity takes precedence to the health of the people.
The article mentions opposition to the lawsuit by environmentalist groups.
Keep in mind the environmentalist movement and its myriad organizations are
created and funded by the same creatures who created the NAFTA. It's called
controlled opposition, to ensure no real or effective opposition takes place.
Remember, too, that the NAFTA is an unconstitutional agreement entered
into by controlled U.S. Congress critters. Who controls the critters? According
to Israeli Knesset member, Uri Avenim, as published in the Israeli daily
"Israel is not the 51st state of the United States of America, as some
would like to think; rather, the U.S. Congress is one of the ccupied areas
Although it's referred to as a 'treaty', the NAFTA was passed by a simple
majority of both houses of Congress. A treaty is ratified only by a
super-majority of the Senate, and even if it were a treaty, as U.S. Senator
Arlen Spector noted in a letter to a constituent, in 1994, "... as in the
case of any treaty, any provision that conflicts with our Constitution would
be void in our country." (We're quite sure Spector didn't expect the
letter to find its way into the hands of networkers or the true statement
would most probably not have been made.)
States could be opting out of the NAFTA on the grounds it violates the
Constitutional protections as guaranteed in the 9th and 10th Articles of
Amendment (Bill of Rights). So? What are we waiting for? More begging on
our knees to the bought-and-paid-for U.S. Congress critters?
New NAFTA Lawsuit Against the U.S.
CITIZENS TRADE CAMPAIGN
For Immediate Release: For More Information, Contact:
Wednesday, June 16 Katie Burnham (202) 546-4611
Patrick Woodall (202) 546-4996
$1 Billion NAFTA Lawsuit Threatens California Environmental Safeguard State's
Fuel Additive Ban, Designed to Protect Water Supply, Attacked as
"Expropriation of Profits"
WASHINGTON -- A Canadian corporation's use of NAFTA to challenge a key California
environmental law demonstrates the danger to public health safeguards
posed by the agreement's sweeping "investor rights" provisions. California
recently imposed a ban on the gas additive MTBE, effective in 2002, because
MTBE is leaking into the water table and poses health risks to
humans. Canada-based Methanex sued the United States for $1 billion
yesterday, claiming that California's ban unfairly restricts the
company's ability to sell methanol (the key ingredient in MTBE) and
profit from it in the state -- and therefore constitutes a violation of
"This is what `free trade" is all about -- corporations overruling the decisions
made by citizens at the ballot box and the legislative process," said Lori
Wallach, Director of Public Citizen's Global Trade Watch. "Methanex is using
NAFTA to override the Governor, State Senate, and people of California."
NAFTA's investor rights provisions, so-called Chapter 11, allow any corporation
in a NAFTA country to sue the federal government of either of the other countries
whenever the corporation believes that a federal, state or local law or policy
violates vaguely-defined investor rights.
The Methanex case is remarkably similar
to the 1998 case leveled against Canada by U.S.-based Ethyl Corp. A
Canadian public health ban on the fuel additive MMT was challenged by Ethyl
because it "expropriated" future profits and damaged Ethyl's "good
reputation." Rather than pay the $251 million in damages demanded by
Ethyl Corp., Canada overturned its ban and paid Ethyl $13 million.
"Its the Ethyl case all over again," said Citizen's Trade Campaign Executive
Director Scott Nova. "A single corporation is using NAFTA to blackmail
an entire country into environmental submission."
Part of Methanex's claim of damages is for its declining stock prices, ostensibly
a result of California's ban. In fact, the dip may well merely
reflect the changes in the underlying price of methanol on the commodities
market. The methanol spot price fell from over 60 in 1997 to
about 20 in 1999. Moreover, Methanex sales to North America remain
strong and were higher in 1998 than for any of the previous five years except
1997 which was only slightly higher.
"The effort to make US taxpayers foot the bill for Methanex's bad luck and
bad business strategy is perverse," stated Nova. "How many Americans
knew when NAFTA was enacted that we were inviting corporations to engage
in this sort of abuse? It is duplicitous for Methanex to blame California
for falling stock values when the company's profits dropped $270 million
between 1997 and 1998 -- before the law was passed and years before the law
will go into effect."
"This is just another case of transnational corporations trying to bully
democracies into weakening
their environmental safeguards,"
added Wallach. "This is an unconscionable
of California's clean water standards."
COUNCIL OF CANADIANS
June 16, 1999
LATEST NAFTA LAWSUIT PROVES THREAT OF CHAPTER 11 TO HEALTH AND ENVIRONMENTAL
(OTTAWA) Vancouver-based Methanex Corp.'s proposed $970-million (U.S.) lawsuit
against the United States joins a growing list of NAFTA lawsuits designed
to overturn health and environmental laws in favour of corporations, says
The Council of Canadians and Sierra Club of Canada.
Methanex Corp. is suing the U.S.
government after California announced it is phasing out MTBE (methyl tertiary
butyl ether), a gasoline additive Methanex manufactures, due to fears leaking
storage facilities could contaminate groundwater.
The U.S. Environmental Protection Agency has declared MTBE to be a known
animal carcinogen and a probable human carcinogen. Both the company and the
industry generally have been plagued recently with falling sales. Methanex
has followed the lead of Ethyl Corp., manufacturer of the gasoline additive
MMT, which last year became the first company to successfully pressure the
Canadian government to reverse an earlier ban on MMT when it launched a Chapter
11 lawsuit against Canada.
"As long as Chapter 11 of NAFTA allows companies to directly sue governments
over laws they feel jeopardize their profits, the numbers of these cases
and the severity of their impact will only increase," said Peter Bleyer,
Executive Director of The Council of Canadians.
"NAFTA is a tool in the hands of corporations desperate to protect their
bottom line, no matter what the cost to human health or the environment,"
added Angela Rickman of the Sierra Club of Canada.
"Chapter 11 very clearly favours trade law over every other form of domestic
law," said Jo Dufay, Campaign Co-ordinator with the Council. "Under NAFTA,
you simply can't have a meaningful environmental law, or one that directly
protects public health and safety, if they in any way conflict with corporate
The Council called on Trade Minister Sergio Marchi to negotiate changes to
NAFTA, Chapter 11, as he has hinted he wishes to do. "Surely, even the U.S.
government will now see that NAFTA gives outrageous powers to corporations,
and jeopardizes human health and the environment," said Bleyer.
Wednesday, June 16
Methanex to sue U.S. under free-trade deal. Damages sought
over California ban on gas additive
Heather Scoffield and Steven Chase
The Globe and Mail
Wednesday, June 16, 1999
Ottawa and Calgary --
HEATHER SCOFFIELD in
STEVEN CHASE in Calgary
Corp. says it plans to use the North American free-trade agreement to
sue the U.S. government, seeking $970-million (U.S.) in damages
because of a California ban on a methanol-based gas
Methanex, the world leader in methanol production, notified the
U.S. government yesterday that it intends to use NAFTA to seek
compensation for the March 25 decision to phase out MTBE
(methyl tertiary butyl ether) by the end of 2002.
be the second time that a Canadian company has used NAFTA to sue the
administration, and will be a test
of a country's ability to pass tradeproof environmental
governor's order to ban the use of MTBE in that state unfairly
targets MTBE in what are really broader gasoline and water resource
issues," Methanex president Pierre Choquette said. "Our mandate is to
act in the best interests of our shareholders, and we are confident
we have a valid claim for damages under the NAFTA."
NAFTA's controversial investment chapter allows companies to
sue foreign governments for compensation if they pass measures
that amount to expropriation. Because methanol is one of two key
ingredients in MTBE and California MTBE is a huge market for Methanex,
the company argues that the ban amounts to a massive expropriation
of Methanex's market capitalization and potential profits.
The company's stock lost $150-million in
the 10 days after the California announcement, Methanex spokesman
Michael Macdonald said, and share prices were volatile for
months leading up to the announcement.
MTBE was introduced in fuel in the mid-1990s
to help it burn more completely and reduce air pollution, but
environmental critics in California feared that leaking storage tanks
could contaminate groundwater.
is the second-largest end use of methanol, consuming an estimated 30
per cent of global demand, according to Methanex, which controls
about a quarter of the world's methanol market.
phase-out in California threatens methanol producers because if it is
copied by other jurisdictions, it could cut what until now was
a growing new market for the commodity, analysts
been by far the fastest-growing use for methanol. Its usage has risen
from nearly nothing 20 years ago to close to one-third of the world's
methanol use," said David Silver, analyst with Credit Suisse
First Boston in New York.
felt this was an "appropriate" time to react to California's ban because
Maine is considering a similar motion, and legislation is also
in the works at the U.S. federal level, Mr. Macdonald
argues that there are better ways to solve the problem of MTBE in water
than to ban the use of the additive.
"We believe there is a focus on MTBE when there
is a whole broader issue of gasoline in the water and in the environment,"
Mr. Macdonald said. "We believe there are alternatives, better
says studies used by the California governor to support his order
were fundamentally flawed, and that MTBE is "safe when handled
Under the NAFTA process, Methanex must wait
60 days before it can actually file its suit. That period is intended
for the company to hold consultations with U.S. trade
officials. If no solution is reached, Methanex can request
Ottawa has been hit four times by such NAFTA claims; three of
them are still in the works. A fourth case, in which Ethyl
Corp. fought Ottawa's de facto ban on the gasoline additive MMT,
was dropped after the federal government agreed to pay the
Virginia-based company $20-million (Canadian) and withdraw the
The settlement raised fears
among environmentalists that NAFTA can be used by companies to
fight environmental laws they don't like. Environmentalists
in both Canada and the United States will be watching the
Methanex case closely, said Toronto trade lawyer Barry Appleton,
who represented Ethyl Corp. in the MMT case.
"This is the case everyone will look to, to
see what NAFTA means," he said. "This will be the catalyst for
either a significant number of new NAFTA cases, or significant changes
The Canadian government is already seeking clarification of NAFTA's
investment chapter, hoping to narrow the definition of expropriation
to avoid such compensation suits. Mexico has resisted Canada's
moves; the United States has remained
also is also an important one for the future of Methanex, analysts said.
If the California phase-out is copied by other U.S. states or other
countries, methanol prices will continue to slide.
Worldwide supply exceeds demand by about 11 per cent. Consequently,
methanol makers face spot prices for the commodity that are trading
near 15-year lows.
wasn't spared from the effects of the supply glut. It lost $68.4-million
(U.S.) in 1998, compared with a 1997 profit of more than $201-million.
Analysts expect continued losses this year and next.
of methanol sales to California alone for MTBE use wouldn't cripple
Methanex. Sales to that state for MTBE use make up 5 per
cent of the company's total revenue, which was $721-million last
To cope with the glut of methanol worldwide, Methanex has closed
two plants, including one in Medicine Hat, Alta., and a joint
venture in Fortier, La. Analysts say the future of the company's
northern B.C. plant, which provides 130 jobs in the coastal town
of Kitimat, is in question.
Report on Business Company
Snapshot is available for: METHANEX CORPORATION
Copyright c 1999 The Globe and Mail
June 15, 1999, Tuesday
HEADLINE: Methanex Seeks Damages Under NAFTA for California MTBE Ban
VANCOUVER, British Columbia, June 15 -- Methanex Corporation today notified
the Government of the United States of its intention to seek damages under
the NAFTA relating to California's decision to ban MTBE.
This is only the second time in the NAFTA's five year history that a claim
of this kind has been filed against the United States.
Pierre Choquette, Methanex's President and CEO commented, "The California
Governor's Order to ban the use of MTBE in that state unfairly targets MTBE
in what are really broader gasoline and water resource issues. Our mandate
is to act in the best interests of our shareholders and we are confident
we have a valid claim for damages under the NAFTA. Our claim is related to
expropriation. The NAFTA requires that an expropriating party meet certain
obligations including fair and equitable treatment and the payment of
compensation, which California did not meet."
Under the NAFTA, a business in a NAFTA-member country is entitled to enjoy
certain conditions relating to its investments in another NAFTA-member country.
Methanex's investments in the United States include Methanex Methanol Company
based in Dallas, Texas and a production plant in Fortier, Louisiana. The
NAFTA dispute process provides an initial period for discussion that can
be followed by an arbitration.
MTBE (methyl tertiary butyl ether) is a gasoline component manufactured from
methanol and isobutylene by oil refiners and chemical manufacturers. Since
the 1970s, MTBE has been used as an affordable and effective source of octane,
first as lead was phased-out of gasoline and subsequently as gasoline aromatics
levels, including benzene, have been reduced. Since the mid-1990s, clean
air legislation has required the use of oxygenates in gasoline (reformulated
gasoline) to reduce tailpipe emissions. MTBE is the refiners' oxygenate of
Reformulated gasoline, including
MTBE, has been key to achieving healthier, cleaner air for an estimated 75
million Americans in the nation's worst-polluted regions. MTBE also makes
the fuel safer by diluting harmful gasoline components like benzene, a known
human carcinogen. The controversy surrounding MTBE relates to its detection
in water resources, which results from gasoline releases to the environment
and MTBE's solubility in water.
Methanex manufactures and markets methanol and is a major supplier to MTBE
producers in the United States and elsewhere. Globally, MTBE represents
approximately 30% of methanol demand, while California's MTBE demand, which
is about a third of the United States MTBE demand, alone represents approximately
6% of global methanol demand. Methanol is Methanex's only product.
With regard to MTBE, Mr. Choquette commented, "Californian and US Federal
regulatory authorities have estimated that reformulated gasoline, including
MTBE, has had an effect equivalent to removing millions of cars from California's
and the nation's roads."
Mr. Choquette continued, "Our view is that we are all entitled to a clean
environment -- air, water and soil -- and that we should not have to choose
between these elements. We have consistently challenged the apparent
pre-occupation with banning MTBE. We promote alternative measures such as
improved gasoline infrastructure management (especially underground storage
tanks), more stringent boat engine emission standards and managed recreational
use of lakes and reservoirs.
These preventative measures
would address the root cause of the issue by substantially reducing gasoline
release to the environment. We also support flexibility for the refiners
which, with continued MTBE availability, would provide choice for
Mr. Choquette concluded, "We have also today submitted our proposal to address
the MTBE controversy, in the form of a five-point plan, to the EPA and to
the EPA's Blue Ribbon Panel currently considering Oxygenates in Gasoline."
Methanex's Five-Point Plan on gasoline, MTBE and the environment includes:
1. providing greater flexibility to refiners by the
elimination of the 2% oxygenate mandate included in the Federal
reformulated gasoline (RFG) program
2. measures to ensure that the better of current or future
air quality standards and existing gains from vehicle emission reductions
already achieved by the use of oxygenates are not lost -- i.e. no
backsliding on air quality
3. more effective enforcement and regulatory programs
to prevent the release of gasoline to the environment
4. more aggressive gasoline and MTBE remediation and treatment
efforts and increased funding to support remediation and treatment
research and development
5. comprehensive consumer education programs on the proper
handling and use of gasoline and the environmental benefits and risks
of gasoline and MTBE
Methanex is a Vancouver based, publicly-traded company engaged in the worldwide
production and marketing of methanol. Methanex shares are listed for
trading on the Toronto and Montreal stock exchanges in Canada under the trading
symbol "MX" and on The Nasdaq Stock Market in the United States under the
trading symbol "MEOH."
Additional background information
on Methanex, the NAFTA claim and MTBE is available on the company's website
Information in this news
release may contain forward-looking statements. By their nature, such
forward-looking statements involve risks and uncertainties that could cause
actual results to differ materially from those contemplated by the
SOURCE Methanex Corporation
CONTACT: Michael Macdonald, Director, Investor Relations & Corporate
Communications of Methanex Corporation, 604-661-2600
In accordance with Title 17 U.S.C. Section 107, this material is distributed
without profit to those who have expressed a prior interest in receiving
the included information for research and educational purposes.
Mike Dolan, Field Director
Public Citizen's Global Trade Watch
ph 202.546.4996 x322
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