and Description consequences of Chapter 11 of NAFTA
November 15, 2007
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Topics in this lecture
Lack of transparency of process Articles of Chapter 11. Performance requirements. The doctrine of "regulatory taking" and its relation to Chapter 11. Some Chapter 11 cases.
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Lack of transparency
There is no requirement of public notification of complaints, and tribunal hearings (typically) are not open to public. Prior to NAFTA Chapter 11, most BIT cases involved narrow commercial interests, where secrecy protected these interests without public harm. Some NAFTA cases involve environmental regulation, with clear public consequences. Until recently, public interest groups could not participate. Tribunal ruling in Methanex case accepted "friends of the court" briefs, providing greater public access.
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Provisions of Chapter 11: National Treatment Article 1102: National treatment provision requires governments to treat foreign investors of NAFTA countries no less favorably than domestic investors in like circumstances, with respect to all phases and aspects of investment, including initial investment and sale of investment.
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Discussion of National Treatment
The difficulty of determining "like circumstances" is similar to the problems associated with determining "like products". Examples: Suppose that a foreign investor builds a new factory. Is it legal to require that this factory meet stricter environmental standards than existing factories? If new factory is lo...
Ch 11 NAFTA Nov 2007