U.S. Company Using NAFTA to Sue Canada for Water

by Mark Bourrie

Thirsty nations elsewhere will pay big money for Canadian water, so much so that the government has now imposed a moratorium on water exports.

But some environmental activists worry that the country may already have ceded control of this resource by its membership in NAFTA.

Sunbelt Ltd., a U.S. company, filed a lawsuit against the Canadian government late in 1998 declaring it was against NAFTA rules to refuse it permission to ship fresh water from a British Columbia river to the U.S. The company wants $220 million for alleged loss of profits.

The water would have come from streams that are in areas claimed as Native territory. The region is one of the most important salmon spawning grounds on the Pacific Coast.

Ottawa responded last week by asking the 10 Canadian provinces to place a moratorium on water exports and work on a national agreement.

"The time has come to update (Canada's water policy) and include the full range of issues which threaten our watershed -- one of which is the bulk removal of water," said Christine Stewart, Canada's environment minister.

"Major water extraction may change the environment, altering the habitats of native species and possibly introducing new, exotic species not normally found in the ecosystem. These changes to the ecosystem could also impact on how people live and work."

Many environmentalists worry that the federal request may have come too late.

But there is pressure on Canada to ship water to the United States and Asia as companies see easy profits in building pipelines or shipping water by the tanker-load across the world.

Water shortages have become common in southern California and dry regions in the Great Plains states rely on irrigation water pumped from the Oglala Aquifer, an underground pool of water stretching into Canada that was left over from the melting of the continental glaciers 8,000 years ago.

The aquifer has shrunk to about 25 percent of its original size.

Canada's government has long opposed the diversion of rivers into the United States. In the 1980s, Canadian investors developed a plan to change the flow of major rivers in central Canada and pooling fresh water in southern Hudson Bay. That plan died when the Canadian government passed new environmental assessment rules.

In 1998, an Ontario company called Nova Group was given a permit to export to Asia 600 million liters of water a year from Lake Superior, the world's largest fresh water lake. The company has support from the provincial government in Ontario, but may be stopped by the International Joint Commission, the Canada-U.S. agency that administers boundary waters.

Another company, McCurdy Group, wants to export 52 million liters of water a year from Gisborne Lake in Newfoundland, in one of the poorest regions of Canada. The government of Newfoundland has not yet decided whether to grant an export permit.

Maude Barlow, chairwoman of the Council of Canadians, an umbrella group for organizations opposed to globalization, said it may be too late to stop U.S. companies from having unfettered access to Canada's water resources.

She said the Canadian government must reopen NAFTA and have water resources included in the treaty. "It (the federal request for water export bans) is not binding on the provinces. If even one province decides it's not going to adhere to the federal standard and pass its own, it puts the whole in jeopardy because NAFTA was signed by the federal government, she said.

"It's the federal government's responsibility to have this kind of jurisdiction. When any one province allows the export of water for commercial purposes, all of the provincial bans across the country are put at risk because it is only federal legislation dealing with NAFTA, exempting us from NAFTA, that can pertain to this issue."

Barlow said only one country in NAFTA has to begin exporting water for all three countries to have their resources open to exploitation.

"I don't think they (the Canadian government) have yet understood the implications of the fact that there is a Canadian company that has a contract to export 18 billion gallons of Alaskan water every year. That is signed and sealed and they'll be beginning those exports within a year.

"One of the three countries (in NAFTA) has opened up the commercial export and trade in water, which means that NAFTA has been triggered in terms of the water resources in all three countries. This opens up investor state rights, the provision under which Ethyl sued Canada for banning (the gasoline additive) MMT and forced us to reverse that decision.

"It's that provision under which Sunbelt is suing the government of Canada," she adds.