Issue 8, August 2003

1. Major New NAFTA Chapter 11 Suit Challenges California Mining Laws

2. Georgian NGOs Charge Baku-Tbilisi-Ceyhan Oil Pipeline Construction Violates Georgian Law

3. Public Financing Delayed Again For Destructive Gas Project in Peru’s Amazon

4. Coalition Opposes Launch of WTO Investment Talks in Letter to U.S. Trade Representative Zoellick

1. Major New NAFTA Chapter 11 Suit Challenges California Mining Laws

Glamis Gold, a Canadian mining corporation, has taken the first formal step toward filing a suit against the U.S. government under Chapter 11 of the North American Free Trade Agreement (NAFTA). Glamis has filed a “Notice of Intent,” seeking $50 million due to changes enacted earlier this year in Californian mining laws and regulations aimed at protecting the environment and tribal lands. The company argues that it deserves compensation for the laws’ impacts on its mining project in California's Imperial Valley. The mining project has been highly controversial both in California and at the Federal level.

In a statement, Friends of the Earth and Mineral Policy Center called the company's action “a disturbing end-run around the U.S. legal and political system.” The groups added that “Glamis wants to have its cake and eat it too, using its subsidiaries to pose as U.S. citizens for purposes of mining on federal lands, while still bringing a NAFTA case as a foreign investor.” The groups also noted that Glamis wants the federal government to buy-out its mining claims in California for millions of dollars.

“This is the latest case of a foreign-owned company trying to take advantage of U.S. laws and taxpayers under NAFTA - all in an attempt to gain a massive settlement from the U.S. government,” said David Waskow of Friends of the Earth.

For more information, contact David Waskow at (202) 783-7400 ext. 108 or dwaskow@foe.org.

A copy of the Glamis Notice of Intent can be found at: http://www.foe.org/camps/intl/greentrade/glamis.pdf

2. Georgian NGOs Charge Baku-Tbilisi-Ceyhan Oil Pipeline Construction Violates Georgian Law

In a letter to the World Bank and European Bank for Reconstruction and Development (EBRD), Georgian NGOs charged that BP and its consortium partners are violating Georgian law by proceeding with construction of the Baku-Tbilisi-Ceyhan (BTC) oil pipeline before required studies are completed and approved. The World Bank and EBRD are currently considering financing the BTC pipeline.

The NGOs found that in the Tsalka region, approximately 21 kilometers (13 miles) of the construction corridor is cleared and leveled, with topsoil stripped and stored near the pipeline. According to the conditions attached to the Nov. 30, 2002 approval of the project's Environmental Impact Assessment (EIA), construction in this area can proceed only after completion and approval of several additional studies, including one regarding re-routing the pipeline. These conditions are intended to protect groundwater deposits near Lake Tsalka, an important drinking water source for the country. The studies have not yet been approved. The BTC consortium claims that “on-going works” constitutes preparatory works, not construction. The EIA, however, specifies that surface preparation and grading is construction.

The BTC oil consortium also includes U.S.-owned Unocal, ConocoPhillips, and Amerada Hess (through a joint venture with Saudi-owned Delta Oil). The $3.5 billion oil pipeline will stretch a length equal to the distance from New York to Miami to ship Caspian Sea oil to the United States. The U.S. Overseas Private Investment Corporation and the Export-Import Bank are also considering financing the oil pipeline.

For more information, contact Carol Welch at (202) 783-7400 ext. 237 or cwelch@foe.org

Friends of the Earth’s BTC case study web page: http://www.foe.org/camps/intl/institutions/bakuceyhan.html

3. Public Financing Delayed Again For Destructive Gas Project in Peru’s Amazon

Under intense pressure from environmental and human rights groups and members of Congress, the board of executive directors of the Export-Import Bank of the United States (Ex-Im) and the Inter American Development Bank (IDB) delayed scheduled votes on the controversial $2.6 billion Camisea Gas Project in Peru. Votes at both banks were expected on Aug. 6 but are now cancelled due to no consensus.

According to an internal Ex-Im report, obtained through the Freedom of Information Act, proposals to mitigate the environmental impacts of the project are “woefully inadequate” and the project will likely lead to landslides, destroy critical natural habitats and spread diseases among indigenous peoples.

Recently a letter was sent from 13 U.S. senators to the head of Ex-Im and to the U.S. Treasury Secretary – the agency that directs U.S. voting decisions at IDB. The letter opposes using U.S. taxpayer money to support the Camisea gas project at this time, and echoes the concerns of House Democratic Leader Nancy Pelosi (D Calif.), who also sent a letter.

For more information contact Jon Sohn at 202-783-7400 ext. 231 or jsohn@foe.org.

Friends of the Earth’s Camisea case study web page: http://www.foe.org/camps/intl/institutions/camisea.htm

4. Coalition Opposes Launch of WTO Investment Talks in Letter to U.S. Trade Representative Zoellick

A broad coalition of environmental, labor, religious and development groups urged U.S. Trade Representative Robert Zoellick in an Aug.1 letter not to support the launch of negotiations for a new World Trade Organization (WTO) agreement on investment liberalization. WTO member countries will decide whether to launch those negotiations at the upcoming WTO Ministerial meeting in Cancun, Mexico in September.

In their letter, the groups said that global environmental and social obligations for multinational corporations must precede a new agreement granting businesses additional rights. The groups also described NAFTA Chapter 11 and other investment agreements as troubling precedents for a WTO investment agreement.

For more information, contact David Waskow at (202) 783-7400 ext. 108 or dwaskow@foe.org

A copy of the NGO letter to Zoellick can be found at: http://www.foe.org/camps/intl/greentrade/cancun.pdf