North American Free Trade Agreement: U.S. Experience With Environment, Labor, and Investment Dispute Settlement Cases (20-JUL-01, GAO-01-933). The North American Free Trade Agreement (NAFTA)which went into effect in 1994, was intended to spur trade and investment throughout North America. Separately, the three NAFTA countries--the United States, Canada, and Mexico--negotiated and entered into two side agreements, the North American Agreement on Environmental Cooperation and the North American Agreement on Labor Cooperation. The side agreements allow citizens and governments to raise questions about failures to effectively enforce environmental or labor laws in any of the three countries. This can be accomplished through both a submission process and a government-to-government dispute settlement process. NAFTA also provides protections for investors, such as nondiscriminatory treatment and the right to freely transfer funds related to an investment, as well as a mechanism to settle investor-state disputes through the agreement's chapter 11. This report provides information on the institutional structure, principles, process, cases, and outcomes associated with (1) the environmental side agreement's submission process, (2) the labor side agreement's submission process, and (3) NAFTA's investor-state dispute settlement mechanism. This report includes information on fines and trade sanctions under the side agreements, as well as summary date on cases filed under both the side agreements and chapter 11. -------------------------Indexing Terms------------------------- REPORTNUM: GAO-01-933 ACCNO: A01415 TITLE: North American Free Trade Agreement: U.S. Experience With Environment, Labor, and Investment Dispute Settlement Cases DATE: 07/20/2001 SUBJECT: International trade Environmental law International agreements Dispute settlement Labor law North American Free Trade Agreement NAFTA Mexico North American Agreement on Environmental Cooperation North American Agreement on Labor Cooperation ****************************************************************** ** This file contains an ASCII representation of the text of a ** ** GAO Testimony. ** ** ** ** No attempt has been made to display graphic images, although ** ** figure captions are reproduced. Tables are included, but ** ** may not resemble those in the printed version. ** ** ** ** Please see the PDF (Portable Document Format) file, when ** ** available, for a complete electronic file of the printed ** ** document's contents. ** ** ** ****************************************************************** GAO-01-933 A Report to the Chairman, Subcommittee on Trade, Committee on Ways and Means, House of Representatives July 2001 NORTH AMERICAN FREE TRADE AGREEMENT U. S. Experience With Environment, Labor, and Investment Dispute Settlement Cases GAO- 01- 933 Letter 3 Results in Brief 4 Agency Comments and Our Response 5 Briefing Section I: 7 Environmental Side Slide 2: Key Principles 9 Slides 3 and 4: Citizen Submission and Review Process 13 Agreement Slide 5: Citizen Submissions Filed and Status of Cases Against the United States 15 Slide 6: Key Citizen Submissions Filed Against the United States 17 Slide 7: Outcomes 19 Briefing Section II: 21 Labor Side Agreement Slide 9: Key Principles 23 Slide 10: Submission and Review Process 25 Slide 11: Citizen Submissions Filed and Status of Cases Against the United States 27 Slide 12: Submissions Filed Against the United States and Labor Principles Involved 29 Slide 13: Outcomes 31 Slide 14: Background 33 Slide 15: Key Principles and Structure 35 Slide 16: Investor- State Dispute Settlement Process 37 Slide 17: Claims Filed and Status of Claims Against the United States 41 Slides 18 and 19: Claims Filed Against the United States 45 Slide 20: Outcomes 47 Appendixes Appendix I: Monetary Enforcement Assessments and Trade Sanctions in the North American Free Trade Agreement?s Labor and Environment 48 Appendix II: Citizen Submissions Under the North American Agreement on Environmental Cooperation 51 Appendix III: Submissions Under the North American Agreement on Labor Cooperation 55 Appendix IV: Cases Filed Under NAFTA's Chapter 11 Investor- State Dispute Settlement Mechanisms Through May 2001 60 Appendix V: Objectives, Scope, and Methodology 65 Appendix VI: GAO Contacts and Staff Acknowledgments 67 Abbreviations BITS bilateral investment treaties ICSID International Centre for Settlement of Investment Disputes NAFTA North American Free Trade Agreement UNCITRAL United Nations Commission on International Trade Law Lett er July 20, 2001 The Honorable Philip M. Crane Chairman, Subcommittee on Trade Committee on Ways and Means House of Representatives Dear Mr. Chairman: The North American Free Trade Agreement (NAFTA) went into effect on January 1, 1994, and was intended to facilitate trade and investment throughout North America. Separately, the three NAFTA countries- the United States, Canada, and Mexico- negotiated and entered into two side agreements, the North American Agreement on Environmental Cooperation and the North American Agreement on Labor Cooperation. The side agreements provide mechanisms that allow citizens and governments an opportunity to raise questions regarding failure to effectively enforce environmental or labor laws of any of the three countries. These mechanisms include both a submission process and a government- to- government dispute settlement process. NAFTA also provides protections for investors, such as nondiscriminatory treatment and the right to freely transfer funds related to an investment, as well as a mechanism to settle investor- state disputes through the agreement?s chapter 11. In preparation for considering future free trade agreements, we recently briefed your staff on the U. S. experience to date with cases brought under the environmental and labor side agreements and with chapter 11 investorstate dispute settlement. In this report, we provide information on the institutional structure, principles, process, cases, and outcomes associated with (1) the environmental side agreement?s submission process, (2) the labor side agreement?s submission process, and (3) NAFTA?s investor- state dispute settlement mechanism. In addition, this report includes information on fines and trade sanctions under the side agreements, as well as summary data on cases filed under both the side agreements and chapter 11 (see app. I to IV). To address these objectives, we interviewed officials from eight U. S. agencies with program responsibility for environmental, labor, or trade issues. In conducting the work, we examined the institutional structure and principles of the side agreements and chapter 11 on investment, the processes that are used to investigate and settle disputes, the cases that have been initiated under the side agreements and investment provisions, and the outcomes and disposition of these cases. We also talked to representatives from nongovernmental entities with knowledge of the environment and labor submission processes, as well as those familiar with NAFTA?s investor- state dispute settlement mechanism. A more detailed description of our scope and methodology is contained in appendix V. Results in Brief The environmental side agreement created the Commission for Environmental Cooperation to implement that accord?s principles and includes a process whereby citizens or nongovernmental groups can raise questions regarding the failure to effectively enforce environmental laws in all three member countries. This process is coordinated at the Commission by the Secretariat, which receives submissions from individuals or groups raising such questions. To date, 31 submissions have been filed with the Secretariat. Of these submissions, 8 were against the United States, 13 were against Mexico, and 10 were against Canada. These submissions have raised a wide range of concerns, from narrow questions of a government?s failure to effectively enforce environmental laws in a particular instance, to broader concerns about enforcement in general. The submission process can lead to the publication of a ?factual record,? a report that outlines the history of the issue, a Party?s obligations under the law in question, and the facts relevant to assertions made in the submission. Of the submissions made to date, only two have resulted in completed factual records, and neither of those completed factual records has involved the United States. The Commission recently finalized a review of the submission process. More detailed information on the submissions and process can be found in briefing section I and appendix II. The labor side agreement established the North American Commission for Labor Cooperation to implement that accord?s principles and includes a process whereby citizens, groups, or governments can raise questions of labor law enforcement in all three member countries. The Commission, through a network of National Administrative Offices in each country, coordinates the submission process, which can, in some cases, directly result in initiation of the government- to- government dispute settlement mechanism. To date, 23 submissions have been filed, with 7 against the United States, 14 against Mexico, and 2 against Canada. Although these submissions have covered a broad range of issues, a majority of them have raised concerns about freedom of association. Thus far, no submission has reached the dispute settlement phase. A review of the entire labor side agreement is scheduled for 2002. Additional information on the labor submissions and process can be found in briefing section II and appendix III. NAFTA?s chapter 11 is based in large part on previous international agreements, such as U. S. bilateral investment treaties and U. S. domestic legal principles applicable to investment (foreign and domestic). Chapter 11 includes specific protections of investor rights in the three NAFTA countries, as well as a mechanism for settling investor- state disputes. This dispute settlement process makes use of the international arbitration rules of the International Centre for Settlement of Investment Disputes (ICSID), ICSID Additional Facility, and the United Nations Commission on International Trade Law. The parties to the dispute are allowed to choose the arbitral tribunal. The process allows disputing parties to seek to revise, set aside, or annul an award on limited grounds. To date, 13 claims have been filed under this dispute settlement mechanism. Of those claims, four were against the United States, five were against Mexico, and four were against Canada. Only five cases have resulted in a final outcome- either settlement or award. Of these cases, two decisions were brought before Canadian courts for review of the arbitral panels? decisions; one is still pending and the other was partially upheld. Further details on the cases and process are described in briefing section III and appendix IV. Agency Comments and We obtained comments on a draft of this report from the Department of Our Response Commerce, the Environmental Protection Agency, the Department of the Interior, the Department of Labor, the Department of State, the Department of Justice, the Department of the Treasury, and the United States Trade Representative. Their comments were predominately technical in nature, and we generally incorporated them as appropriate throughout this report. As arranged with your office, unless you publicly announce the contents earlier, we plan no further distribution of this report until 30 days after its issue date. At that time, we will send copies to interested congressional committees and the Secretary of Commerce; the Administrator, Environmental Protection Agency; the Secretary of the Interior; the Attorney General; the Secretary of Labor; the Secretary of State; the Secretary of Treasury; and the U. S. Trade Representative. Copies will also be made available to other interested parties upon request. If you or your staff have any questions about this report, please call me at (202) 512- 4347. Additional contact and staff acknowledgments are listed in appendix VI. Sincerely yours, Loren Yager, Director International Affairs and Trade Briefing Section I: Environmental Side Agreement Briefing Section I Environmental Side Agreement: Institutional Structure Commission for Environmental Cooperation The Council Minister of Environment - Canada Environmental Protection Agency (EPA) Administrator - United States Secretary of Environment and Natural Resources - Mexico Joint Public Advisory Committee 15 members (5 appointed by each country) Secretariat Executive Director 50 professional and support staff Briefing Section I Environmental Side Agreement: Key Principles *Key principles Protect, conserve, and improve the environment Provide citizens and nongovernmental organizations an opportunity to raise questions regarding a Party?s enforcement of environmental laws Provide governments an opportunity to raise questions regarding a Party?s enforcement of environmental laws Government- to- government process includes provisions for fines and trade sanctions Slide 2: Key Principles The environmental side agreement aims to protect, conserve, and improve the environment through increased cooperation and transparency among the three governments and greater public participation. Since the agreement?s first full year of operation in 1995, member governments have worked cooperatively on a number of projects-- producing reports on environmental topics of common concern such as conservation of biodiversity, holding symposia on topics such as understanding the linkages between trade and the environment, and implementing the Sound Management of Chemicals Program. In addition, the agreement provides citizens and nongovernmental organizations an opportunity to raise questions about and shed light on a Party government?s effective enforcement of its environmental laws through the submission process. 1 Party governments may also raise questions regarding another Party?s enforcement of its environmental laws through the government- to- government dispute settlement mechanism; however, no government- to- government disputes have been initiated to date. The latter process includes a provision for the assessment of fines and trade sanctions. 2 1 For more information on the cooperative work programs of the Commission for Environmental Cooperation, as well as the citizen submission process, visit the Commission?s Web site at http:// www. cec. org . 2 While we do not provide specific information on the government- to- government dispute settlement mechanism in this report, appendix I provides a description of the monetary enforcement assessments and trade sanctions available under the North American Agreement on Environmental Cooperation. Briefing Section I Environment: Citizen Submission and Review Process Submission filed with Secretariat Secretariat evaluates submission based on specific criteria Meets criteria Does not meet criteria Secretariat decides if response from Submitter refiles submission Party is warranted If yes, response requested If no, process terminated Secretariat decides if factual record warranted If yes, notification to Council Briefing Section I Environment: Citizen Submission and Review Process Decision by Council to prepare a factual record If yes, Secretariat drafts factual record If no, process terminated Comments from Parties Secretariat prepares final factual record Decision by Council whether to make factual record public If yes, publication of factual record Slides 3 and 4: Citizen The process for making a submission to the Commission for Environmental Submission and Cooperation begins when a citizen or nongovernmental group files a submission with the Secretariat. The process can then move through Review Process various decision points, which can culminate in the public release of a factual record on the issues raised in the initial submission. According to the Commission?s guidelines, a factual record outlines the history of an issue and the facts relevant to the assertions made in the submission. In the two factual records prepared to date, the Secretariat has also included information on the obligations of the Party under the law in question and the actions of the Party in fulfilling these obligations. Depending on the point of the process, the decision to proceed rests with either the Secretariat or the Council. The Secretariat is guided by criteria laid out in formal guidelines for implementing the submission process. Documentation of some of the Secretariat?s determinations, as well as a Party?s response to a submission, is generally available to the public. 3 For example, the Council recently resolved to amend the guidelines to reflect a requirement that the Secretariat make public its reason for recommending a factual record 5 working days after the Secretariat has notified the Council of such a recommendation. A vote of at least two- thirds of the Council is required to proceed at two key points of the process- whether to instruct the Secretariat to prepare a factual record and whether to publicly release the factual record. 3 Making files on the citizen submissions and related documents public is subject to the confidentiality provisions of the environmental side agreement and of the guidelines. Briefing Section I Environment: Citizen Submissions Filed and Status of Cases Against the United States 31 Total submissions 8 against the United States 13 against Mexico 10 against Canada 19 Submissions closed and 12 under review 8 Submissions against the United States 5 have been terminated or the process halted 1 was withdrawn 1 has been recommended for a factual record 1 is under review Slide 5: Citizen There have been a total of 31 citizen submissions filed with the Submissions Filed and Commission for Environmental Cooperation alleging violations of environmental laws against all 3 member governments. Of these 31 Status of Cases Against submissions, 8 were against the United States, 13 were against Mexico, and the United States 10 were against Canada. Nineteen submissions have been closed. Of these closed submissions, 17 were closed for several reasons, including that the submission did not meet specific requirements; and two are considered closed because a factual record was prepared. Twelve are currently under review and in various stages of the process. Submissions have covered a broad range of concerns, from specific questions of a government?s failure to effectively enforce a particular law in a particular situation, to others alleging a more general failure to effectively enforce environmental laws. For example, an early submission, known as the Cozumel Pier case, alleged that in one instance, the Mexican government had failed, among other things, to effectively enforce its requirements for conducting an environmental impact assessment of the Cozumel pier project. A more recent submission, known as the Migratory Bird case, involves a complaint alleging that the U. S. government fails to effectively enforce a law that prohibits the taking of migratory birds without a permit with respect to loggers and the logging industry. Eight submissions were filed with the Commission alleging that the United States failed to effectively enforce its environmental laws. Of these eight submissions, one is currently being considered by the Council for preparation of a factual record, one is being reviewed in light of the U. S. government?s response and additional information provided by the United States at the request of the Secretariat, and six are no longer being considered. A summary of all citizen submissions made under the environmental side agreement can be found in appendix II. Briefing Section I Environment: Key Citizen Submissions Filed Against the United States MIGRATORY BIRDS GREAT LAKES Submitters: Submitters: Center for International Environmental Department of the Planet Earth Inc., et al. Law, et al. Claim: Claim: Regulations and programs adopted to Migratory Bird Treaty Act (MBTA) not control airborne emissions of toxic effectively enforced as it relates to substances from solid and medical waste loggers, logging companies, and incinerators violate and fail to effectively logging contractors; logging operations enforce U. S. domestic laws and U. S. Canada exempted from the MBTA as a matter Treaties of U. S. internal policy U. S. Response: U. S. Response: Submission does not meet applicable No policy to exempt logging requirements Agency discretion allows for current Allegations inaccurate enforcement policy Section of Clean Air Act misunderstood Resource allocation decision Status: Status: Additional information requested and Preparation of a factual record received from United States recommended by the Secretariat Secretariat reviewing submission in light of Council will consider whether to response and additional information approve preparation of a factual record Slide 6: Key Citizen The United States was named in eight submissions. However, two stand Submissions Filed out as significant- the Migratory Birds and the Great Lakes submissions- because they have gone the furthest in the submission process, resulting in Against the United a U. S. response, and, in the Migratory Birds case, a recommendation from States the Secretariat to the Council to prepare a factual record. 4 Currently, both submissions are pending, and it is not known in either case whether a factual record will be prepared and made public. 4 A third submission, the Fort Huachuca submission, also reached the point in the process where a response was prepared by the U. S. government and was submitted. However, the submitters withdrew their filing, and the process was terminated before the Secretariat made a decision about whether to recommend the preparation of a factual record. Briefing Section I Environment: Outcomes Two factual records have been prepared and made public Submission against Mexico in Cozumel case Submission against Canada in BC Hydro case Another factual record is being prepared Secretariat recommended and is preparing a factual record in a submission against Mexico (Metales y Derivados case) History of submissions and submission process reviewed by the Joint Public Advisory Committee Briefing Section II: Labor Side Agreement Briefing Section II Labor Side Agreement: Institutional Structure North American Commission for Labor Cooperation Permanent structure Temporary bodies Ministerial Council Evaluation Committee of Experts Secretariat Executive Director Arbitral panel 15- member support staff Canada NAO U. S. NAO Mexico NAO Briefing Section II Labor Side Agreement: Key Principles Key principles Improve working and living standards through compliance with, and effective enforcement of, 11 labor principles Eleven labor principles fall into three categories: Group I-- union- related activities Group II-- workers? rights Group III-- child labor and workplace safety Provide citizens and governments an opportunity to address questions regarding enforcement of labor laws Includes provisions for fines and trade sanctions that only apply to violations of Group III labor principles Slide 9: Key Principles The goals of the labor side agreement are to improve working conditions and living standards in each country, encourage the exchange of information regarding pertinent legal issues, foster transparency in administration of labor laws, and pursue cooperative labor- related activities among the three countries. 1 In addition, under the labor side agreement, the three governments committed themselves to promote compliance with and effectively enforce (subject to domestic laws) 11 labor principles. These labor principles are generally grouped into three categories. Group I Freedom of association and right to organize, Right to bargain collectively, and Right to strike Group II Prohibition of forced labor, Elimination of employment discrimination, Equal pay, Compensation for occupational injuries and illnesses, and Protection of migrant workers Group III Child labor protections, Minimum wage technical standards, and Prevention of occupational injuries The agreement also allows citizens and groups to file submissions questioning implementation of labor laws. In addition, fines or trade sanctions may be imposed when a government is found to have failed to effectively enforce its labor laws related to group III principles. 1 For additional information see the U. S. Department of Labor's National Administrative Office Web site: http:// www. dol. gov/ dol/ ilab/ public/ programs/ nao/ main. htm. Briefing Section II Labor: Submission and Review Process Submission filed with NAO (Groups I, II, III) If accepted: Consultations with other NAOs Public hearing Issue report (Groups I, II, III) Evaluation Ministerial Council Dispute Resolution Fines and Committee of Minister- to- minister -Consultations sanctions Minister- to- minister Experts consultations -Arbitral panel (Group III only) consultations (Groups II, III) -Special council -Initial report (Groups I, II, III) (Groups II, III) -Action plan -Final report (Group III only) Slide 10: Submission Any person or group in a NAFTA country may file a submission with a and Review Process National Administrative Office alleging that one of the other governments has failed to effectively enforce its labor laws. If the National Administrative Office decides to accept the submission, it may hold public hearings to gather information; and it may consult with the other National Administrative Offices. The Secretary of the National Administrative Office receiving the submission may then recommend that the Ministers consult on the submission. Depending on the nature of the allegation, ministerial consultations may be followed by formation of an evaluation committee of experts to further consider the submission. The labor agreement also provides a government- to- government dispute settlement mechanism to be used where cooperative efforts to resolve the problems fail and where the submission alleges a persistent pattern of failure to effectively enforce prevention of occupational safety and health hazards, child labor protections, or minimum wage technical labor standards. While some submissions have been eligible to proceed to the government- to- government dispute settlement level, none has advanced this far. If a submission were to reach this stage, an arbitral panel would be formed to review the allegations and make recommendations for corrective action. Failure to fully implement the panel's recommendations could lead to monetary sanctions. Collected fines would be placed in a fund used to improve enforcement of labor law in the country found in violation. Failure to pay the fines could result in suspension of NAFTA benefits. See appendix I for more information regarding how fines and trade sanctions would be applied. Briefing Section II Labor: Citizen Submissions Filed and Status of Cases Against the United States *23 Total submissions Labor Labor principles principles addressed addressed in in all all submissions submissions a a 7 against the United States 14 against Mexico 15 2 against Canada Group I 15 Submissions closed Group II and 8 under review Group III 9 7 Submissions against the 20 United States 2 declined 5 ministerial consultations a Numbers exceed 23 because a submission can address multiple labor principles Slide 11: Citizen The three National Administrative Offices have received a total of 23 Submissions Filed and submissions since 1994, with 7 submissions being filed between 1994 and 1996; 13 between 1997 and 1998; 2 in 1999; and 1 in 2000. At the time of this Status of Cases Against report, no submissions had been filed in 2001. Of the 23 total submissions the United States filed, 7 were against the United States, 14 were against Mexico, and 2 were against Canada. Of these submissions, 15 have been closed and 8 are still under review. Of the seven submissions filed against the United States, three were the subject of ministerial consultations, two were declined, and two are pending ministerial consultations. A more detailed description of the 23 submissions can be found in appendix III. The graph depicts the labor principles, by group, cited collectively in all 23 submissions. The number of labor principles cited exceeds 23 because more than 1 labor violation can be included in a submission. The majority of submissions have alleged group I violations, commonly citing freedom of association concerns. Briefing Section II Labor: Submissions Filed Against the United States and Labor Principles Involved Group I cases 4 cases cited freedom of association Group II cases 3 cases cited employment discrimination 3 cases cited compensation for occupational injuries and illnesses 3 cases cited protection of migrant workers Group III cases 5 cases cited minimum employment standards, such as minimum wages 3 cases cited prevention of occupational injuries Slide 12: Submissions Of the seven submissions filed against the United States, five were Filed Against the accepted for review. These submissions together claimed violations of 6 of the 11 labor principles, encompassing group I, II, and III labor principles. United States and One of the five submissions alleged that the United States violated six labor Labor Principles principles. Involved Briefing Section II Labor: Outcomes No submission has progressed past the minister- tominister consultation stage of the process Submissions that have reached this phase have taken at least 2 years to do so Labor commission held jointly sponsored public seminars and forums and issued public reports Review of labor side agreement, including the submission process, scheduled for 2002 Slide 13: Outcomes To date no submission has advanced past the ministerial consultation phase, and those that have reached this stage have taken at least 2 years to do so. The labor submission process has resulted in conferences, seminars, and public reports. For example, in an effort to address concerns about genderbased discrimination that were raised in a submission to the U. S. National Administrative Office, the three NAFTA governments held a conference to discuss the laws and programs that protect employment rights of women in all three NAFTA countries. In another instance, a submission raising issues regarding the status of international treaties and constitutional provisions protecting freedom of association led the three Parties to hold a seminar on international treaties and constitutional provisions in each Party's labor laws. Furthermore, the Labor Commission initiated a variety of public outreach forums and conferences regarding workers' rights, as a result of issues raised in several submissions and published reports on the topics covered. A review of all the components of the labor side agreement is scheduled to be completed in 2002, but may not be finalized as scheduled, according to U. S. officials. The reason for the delay is primarily because of the recent change in the U. S. administration and as- yet unfilled staff positions. Briefing Section III: Investor- State Dispute Settlement Briefing Section III NAFTA Investor- State: Background Previous international agreements on investment Friendship Commerce and Navigation Treaties (post- WWII) Bilateral Investment Treaties (since the early 1980s) Slide 14: Background The provisions on investor rights and the dispute settlement mechanism found in NAFTA's chapter 11 are modeled on other U. S. international treaties, with the underlying investment policy based largely on U. S. domestic practice. For example, during the post- World War II era, the United States negotiated treaties of friendship, commerce, and navigation to protect U. S. investors abroad. These treaties included a state- to- state dispute settlement mechanism designed to resolve investment disputes through diplomatic channels or arbitration. By the early 1980s, the effort to protect investors overseas shifted to the negotiation of bilateral investment treaties (BITS). These BITS provided investors more specific investment protections (similar to those found in U. S. domestic practice) and also introduced investor- state arbitration rules- rules similar to those found in NAFTA's chapter 11. Briefing Section III NAFTA Investor- State: Key Principles and Structure Key principles Provides investor protections that cover a broad range of issues, including national treatment (art. 1102), minimum standard of treatment (art. 1105), performance requirements (art. 1106), and expropriation (art. 1110) Provides an investor- state dispute settlement mechanism, which includes authority to award monetary damages Uses existing international arbitration rules and structure Cases against the United States generally overseen by the Department of State Slide 15: Key NAFTA's chapter 11 on investment provides several basic protections for NAFTA investors and their investments including nondiscriminatory Principles and treatment, 1 minimum standard of treatment, 2 freedom from Structure performance requirements, 3 free transfer of funds related to an investment, and expropriation only in conformity with international law. In addition, NAFTA's investment chapter allows investors and governments to use an investor- state dispute settlement mechanism when investors claim violations of the agreement's protections. This mechanism relies on the use of three existing international commercial arbitration rules: the United Nations Commission on International Trade Law (UNCITRAL), the International Centre for Settlement of Investment Disputes (ICSID), and the ICSID Additional Facility. The Department of State is generally responsible for overseeing cases brought against the United States, but other agencies, such as the Department of Justice and the U. S. Trade Representative, as part of an interagency process, also play a significant role in supporting the U. S. position in chapter 11 cases. 1 Nondiscriminatory treatment requires each government to treat investors from another NAFTA country and their investments no less favorably than its own investors and their investments (national treatment), and no less favorably than investors of other countries and their investments (most- favored- nation (MFN) treatment). In addition, investors and their investments must be accorded the better of national treatment or MFN treatment (standard of treatment). 2 Minimum standard of treatment requires each government to accord investors from another NAFTA country treatment in accordance with international law, including fair and equitable treatment and full protection and security. 3 ?Performance requirements? refers to a set of requirements that governments impose or enforce on investors or their investment either as a condition of establishment or operation, or as a condition for receipt of an advantage. Examples include requiring an investor to buy or use components from a local supplier or to export a specified level of goods or services. Briefing Section III Investor- State: Dispute Settlement Process Investor may seek consultation and negotiation If not satisfied with consultations, investor files notice of intent to submit claim 6 months since events 90 days since giving rise to claim notice of intent Investor files notice and submits claim under specific international arbitration rules Tribunal is constituted (three arbitrators) Tribunal convenes to hear arguments Parties can seek to set aside, annul, or revise Tribunal makes award award on limited grounds Slide 16: Investor- State Chapter 11 encourages consultations and negotiations as the first steps in Dispute Settlement the dispute settlement process under the investor- state dispute settlement mechanism. Failing successful consultations, an investor may proceed to Process the formal steps under the dispute settlement process and seek monetary damages against the host government, including interest and costs, for actions taken by that government at all levels, e. g., local, state, and federal. Article 1123 of NAFTA provides for the establishment of an arbitral tribunal consisting of three arbitrators, one appointed by each of the disputing parties, and the third, to be the presiding arbitrator, appointed by agreement of those parties. 4 The investor selects the international arbitration rules that will govern the arbitration from the available alternatives provided under the NAFTA. 5 Generally, the tribunal receives formal written submissions from the disputing parties on the issues raised by the case and convenes to hear the parties' arguments. The extent of public access to proceedings, documents, or decisions is guided by the text of the NAFTA, the selected arbitration rules, and by the parties to the dispute. In addition, a panel can unilaterally issue a confidentiality order. These practices have limited the accessibility of information about investor- state cases. 4 NAFTA chapter 11 also includes specific provisions regarding the parties' failure to appoint arbitrators or agree on a presiding arbitrator. 5 Currently, only the ICSID Additional Facility and the UNCITRAL Arbitration Rules are available. The tribunal may make interim orders and final awards, which are binding on the parties. Under article 1136, which sets out rules governing enforcement of final awards, each NAFTA Party is obligated to abide by and comply with a final award and provide for enforcement of that award in its own country. In addition, this article allows a disputing party to seek enforcement of an award only where certain time requirements related to the applicable arbitration rules have elapsed and neither party has requested revision, set- aside, or annulment of the award; or where a revision, annulment, or set- aside application proceeding has been dismissed or completed by a court and there is no further appeal. 6 A government's failure to pay the award could result in the imposition of trade sanctions if the government of the investor seeks further resolution of the matter under NAFTA chapter 20's dispute settlement procedures. 6 Article 1136 allows a disputing party, under the law governing the arbitration, to commence proceedings to revise, set aside, or annul an award of the arbitral tribunal. Mexico and Canada have both initiated such proceedings in Canadian courts. Both countries sought to have awards in favor of the investor set aside under Canadian enactments of the UNCITRAL Model Law on International Commercial Arbitration, which allow decisions of arbitral tribunals, such as NAFTA chapter 11 tribunals, to be subject to action to set aside the award on limited grounds, including a tribunal exceeding its jurisdiction. Such a proceeding is not a judicial review of the merits of an underlying arbitration. Briefing Section III Investor- State: Claims Filed and Status of Claims Against the United States 13 Total claims filed 4 by U. S. investors against Canada 5 by U. S. investors against Mexico 4 by Canadian investors against the United States 4 Claims against the United States All pending and in various stages of the dispute settlement process Slide 17: Claims Filed To date, 13 investor- state claims have been made under NAFTA's chapter 11. 7 Of these claims, nine have been filed by U. S. investors against Canada and Status of Claims or Mexico. Canadian investors have filed four claims against the United Against the United States. All four cases filed against the United States are pending and in States various stages of the dispute settlement process. For example, in one case, Loewen, a hearing was held in 2000 on jurisdictional issues. The next hearing, which involves the Methanex case, is scheduled for mid- summer 2001. 7 Thirteen refers to the number of formal claims submitted to arbitration. In some cases, a notice of intent to claim may have been submitted by an investor but was never followed up with a formal notice of claim or notice of arbitration. A case only becomes an official claim when it is submitted to arbitration under the applicable rules. Briefing Section III Investor- State: Cases Filed Against the United States Loewen: $725 million Methanex: $1 billion Claim: Claim: Mississippi jury awarded $500 million in compensatory California regulations ban use of MTBE, a gasoline and punitive damages against Canadian- owned additive that can contaminate drinking water, by end funeral home chain in civil proceeding for fraudulent of 2002. Canadian firm Methanex, which produces and malicious business practices. To stay methanol, a feedstock for MTBE, claims regulations execution of the judgment pending appeal, company illegally expropriate firm?s U. S. investment and was required to post $625 million appeal bond, a discriminate against it in favor of the U. S. ethanol state statutory requirement upheld by the industry. Mississippi Supreme Court. Company claims jury award and court action, among other things, amount to a denial of justice. NAFTA provisions: Arts. 1102, 1105, NAFTA provisions: Arts. 1102, 1105, and 1110 and 1110 Briefing Section III Investor- State: Cases Filed Against the United States Mondev: $50 million ADF: $90 million Claim: Claim: Canadian- owned real estate company that contracted Canadian company?s U. S. subsidiary subcontracted with city of Boston and local agency to construct with U. S. firm to supply steel for a federally- aided buildings won $16 million award (reduced to $9.6 highway construction project in Virginia. Canadian million) for breach of contract and tort. Award was company?s U. S. subsidiary wanted to fabricate U. S. manufactured reversed by Supreme Judicial Court of Massachusetts, steel in Canada for use in the project. which ruled that Boston did not breach contract and Buy America requirements prohibit use of Canadianfabricated agency was immune from suit under state law from steel in the construction project. ADF claims tort liability. Firm claims that the city of Boston?s Buy America requirements discriminate against and alleged breach of contract and the court?s ruling prohibited performance requirements on ADF. involve expropriation of Mondev?s interest and a denial of justice. NAFTA provisions: Arts. 1102, 1103, NAFTA provisions: Arts. 1102, 1105, 1105, and 1110 and 1106 Slides 18 and 19: Two claims, one filed by the Loewen Group and one by Methanex, together Claims Filed Against seek total monetary damages against the United States of approximately $1. 7 billion. While each case presents arguments unique on the facts, they the United States both essentially assert that actions taken in the United States violated the national treatment and minimum standard of treatment provisions of chapter 11. In addition, they both claim that the U. S. actions (through Mississippi's justice system and California's regulations, respectively) amounted to an expropriation of their property, in violation of another key provision of NAFTA's investment chapter. The Department of Justice is the lead agency in the Loewen case, while the Department of State is leading the defense in the Methanex case. The Mondev and ADF claims together call for $140 million in monetary damages against the U. S. government. Both claims cite violations of NAFTA's national treatment and minimum standard of treatment provisions. The Mondev claim also cites violations of NAFTA's mostfavored- nation provision, and further alleges that U. S. actions amount to an expropriation of its investment in Massachusetts. The ADF claim asserts that U. S. Buy America requirements impose performance requirements on ADF in violation of NAFTA's chapter 11. The Department of State is the lead agency defending the U. S. government position in both of these cases. There have been interagency discussions among the U. S. Trade Representative, the Department of State, the Department of Justice, the Department of Commerce, and the Department of the Treasury on how the damages would be paid if awarded. However, no agreement has been reached, and no awards have had to be paid. One possible source for payment considered in interagency discussions is the permanent, indefinite appropriation in 31 U. S. C. 1304, known as the Judgment Fund, which is legally available to pay final judgments and comprise settlements against the United States. The Fund is administered by the Department of the Treasury, which certifies and disburses actual payments from the Fund. Before payments can be made, however, the Department of Justice must first certify that a judgment is final and payment is in the interest of the United States. In addition, the judgment must be for an actual sum of money, and there must be no other source of funds legally available to pay the judgment. Briefing Section III Investor- State: Outcomes 5 Cases brought by U. S. investors have resulted in settlement or award Ethyl Corporation vs. Canada-- settled for $13 million S. D. Myers vs. Canada-- partial award for investor; case under review in Canadian courts Pope & Talbot vs. Canada-- partial award in favor of investor on one aspect of case Azinian, et al. (DESONA) vs. Mexico-- award in Mexico?s favor Metalclad Corporation vs. Mexico--$ 16.7 million award for investor; Canadian courts upheld award in part Experience with investor- state disputes is limited and few cases finalized Slide 20: Outcomes To date, U. S. investors have made nine claims under NAFTA's investor- state dispute settlement mechanism, with results, so far, of settlement or award in five of those cases. Canada settled with a U. S. investor in one case in which a Canadian court, in an unrelated case, called for the federal government of Canada to reverse the actions that gave rise to the claim. 8 In two other cases involving Canada, arbitral tribunals found in favor of U. S. investors. In the S. D. Myers case, Canada is seeking to have the partial award against it set aside in its domestic courts. Outcomes for U. S. investors in two cases involving Mexico have been split- with one arbitral tribunal's decision in favor of Mexico and another in favor of the U. S. investor. In the Metalclad case, Mexico sought to have the award against it set aside in Canadian courts. A Canadian court ruling denied Mexico's application to set aside the award in its entirety, but did set aside part of the award. More investor- state dispute settlement cases are currently progressing through chapter 11's arbitral system. According to a schedule of deadlines for investor- state arbitration, a hearing will be held in four cases involving the United States or a U. S. investor before the end of 2001. 8 The provincial government of Alberta sued the Canadian federal government on the same measure raised in the Ethyl case and won. Appendi xes Monetary Enforcement Assessments and Trade Sanctions in the North American Free Appendi x I Trade Agreement?s Labor and Environment The structure for monetary enforcement assessments (fines) and trade sanctions in the North American Free Trade Agreement's (NAFTA) labor and environmental side accords follows distinct processes. For labor, there is a single, continuous process that begins with a citizen submission on a labor law enforcement matter and could lead, in some cases, to fines or suspension of NAFTA tariff benefits. For environment, there are two processes. One specifically addresses citizen submissions on environmental law enforcement matters and can, at most, result in the publication of a ?factual record? by the Secretariat of the Commission for Environmental Cooperation. The other, a Party- to- Party dispute settlement process, could lead to fines or suspension of NAFTA tariff benefits. Aside from these distinct processes, the way monetary fines are assessed and what happens if a Party fails to pay a fine are handled the same under both side accords. How the United States pays fines assessed against it, while not addressed in either side accord, has been the subject of interagency discussion. Environmental Process Fines are called for in the Party- to- Party Consultation and Resolution of Disputes Section (part V) of the North American Agreement on Environmental Cooperation. Fines may be assessed if an arbitral panel determines that one Party has exhibited a persistent pattern of failure to effectively enforce its environmental law, Parties have not been able to agree on an action plan, or an action plan designed to correct a failure to effectively enforce a Party's environmental law has not been fully implemented. Even if a fine is assessed, the original plan for corrective action required by the arbitrage panel must still be fully implemented. Labor Process A citizen submission can evolve into a Party- to- Party Ministerial Consultation, which in turn can lead to the utilization of the dispute resolution mechanism for 3 of the 11 labor principles listed in the North American Agreement on Labor Cooperation: child labor, minimum wage technical labor standards, and occupational safety and health. An arbitral panel determines whether the Party complained against showed a persistent pattern of nonenforcement of one of the three labor principles and prepares a final report on the complaint. If the disputing parties have not agreed on a final report or cannot agree on full implementation of an action plan, then the panel can impose a monetary enforcement assessment. Even if a fine is assessed, the original plan for corrective action required by the arbitral panel must still be fully implemented Amount of Monetary A fine cannot exceed $20 million or its equivalent in the currency of the Fines Under the Side Party paying the fine in the first year of NAFTA implementation or be no more than .007 percent of total trade in goods between the parties during Accords the most recent year for which data are available. The fine must be paid into a fund directed by the Council of the Commission established under each side accord. The monies must be used as the Council directs to either improve the environment or labor conditions or the enforcement of environmental or labor laws in the territory of the Party complained against, consistent with the law of that Party. How the United States There have been interagency discussions among the Department of Labor, Would Pay the U. S. Trade Representative, the Department of State, the Department of Justice, and the Environmental Protection Agency on exactly how the fines would be paid. However, no agreement has been reached, and no fines have been assessed. One possible source for payments considered in interagency discussions is the permanent, indefinite appropriation in 31 U. S. C. 1304, known as the Judgment Fund, which is legally available to pay final judgments and comprise settlements against the United States. The Fund is administered by the Treasury Department, which certifies and disburses actual payments from the Fund. Before payments can be made, however, the Department of Justice must first certify that a judgment is final and payment is in the interest of the United States. In addition, the judgment must be for an actual sum of money, and there must be no other source of funds legally available to pay the judgment. If Fines Fail If Mexico or the United States fails to pay a fine within 180 days, the complaining Party (or Parties) may suspend NAFTA tariff benefits, in an amount no greater than that sufficient to collect the fine. The rates of duty on goods originating in the Party complained against shall not exceed the lessor of (a) the rate that was applicable to those goods just prior to NAFTA's entry into force, or (b) the most- favored nation rate applicable to those goods on the date the Party suspends tariff benefits. To the extent practicable or effective, the sector that is impacted (i. e., that sector against which NAFTA benefits are suspended) shall be the same sector or sectors as those involved in a complaint. In the case of Canada, 1 the respective Commissions may file the arbitral panel's determination (that a fine be paid or that an action plan be fully implemented) in a court of competent jurisdiction in Canada and may take legal measures for enforcement of the panel's determination. Neither the panel's determination nor a court order to enforce a panel determination is subject to review or appeal. 1 Both the environment and labor side agreements contain special rules that apply to Canada, which establish that trade sanctions are not applicable to Canada where Canada fails to pay an assessed fine or fully comply with an action plan. Citizen Submissions Under the North American Agreement on Environmental Appendi x II Cooperation Case no. and name Submitted by Issue Status Against country 95- 001 Biodiversity Legal Alleged failure to effectively enforce Process terminated United States Spotted Owl Foundation, et al. selected provisions of the Endangered Secretariat determined Species Act government response not merited 95- 002 Sierra Club, et al. Alleged failure to effectively enforce all Process terminated United States Logging Rider (1995) applicable federal environmental laws Secretariat determined by eliminating private remedies for submission criteria not met salvage timber sales 96- 01 Comit� para Comit� para la Alleged failure to conduct an Factual record prepared and Mexico Cozumel Protecci�n de los Recursos environmental impact assessment made public Naturales, A. C., et al, before building a public harbor (1996) terminal for tourist cruises on the island of Cozumel 96- 002 Mr. Aage Tottrup, P. Eng Alleged failure to effectively enforce Process terminated Canada Aage Tottrup (1996) Canadian and Alberta environmental Secretariat determined laws resulting in the pollution of government response not wetlands impacting fish and migratory merited bird habitats 96- 003 Friends of the Old Man River Alleged failure to effectively enforce Process terminated Canada Old Man (1996) habitat protection sections of Secretariat determined factual River I Canada's Fisheries Act and the record not warranted Canadian Environmental Assessment Act; charge of a de facto abdication of legal responsibility by the Canadian and provincial governments 96- 004 The Southwest Center for Alleged failure of the U. S. Army to Process terminated Submitter United States Fort Biological Diversity, et al. uphold the National Environmental withdrew after U. S. Huachuca (1996) Policy Act and produce an government response environmental impact assessment of Fort Huachuca base expansion 97- 001 British Columbia Aboriginal Alleged failure to effectively enforce Factual record prepared and Canada BC Hydro Fisheries Commission, et al. the Canadian Fisheries Act and failure made public (1997) to protect fish and fish habitat in British Columbia from hydroelectric dam 97- 002 Comite Pro Limpieza del Rio Alleged failure to effectively enforce Secretariat reviewing in light of Mexico Rio Magdalena (1997) environmental legislation governing Mexican response to Magdalena the disposal of wastewater into the determine if factual record Magdalena River in the state of warranted; Mexico has not Sonora responded to the Secretariat's September 1999 request for additional information Case no. and name Submitted by Issue Status Against country 97- 003 Centre Quebecois du Droit Alleged failure to effectively enforce Council, by two- thirds majority, Canada Quebec Hog de L'environnement, et al. environmental standards related to decided not to direct the Farms (1997) agricultural pollution originating from Secretariat to prepare a factual animal production facilities, mainly record; process was from hog farms terminated 97- 004 Canadian Environmental Alleged failure to conduct an Process terminated- Canada Canadian Defense Fund (1997) environmental assessment of ?The Secretariat determined Environmental Atlantic Groundfish Strategy? that submission criteria not met could jeopardize the future of Defense Fund Canada's East Coast fisheries 97- 005 Animal Alliance of Canada, Alleged failure to effectively enforce Process terminated Canada Biodiversity Council of Canadians, regulations ratifying the Convention on Secretariat determined Greenpeace Canada (1997) Biological Diversity signed at the Rio submission criteria not met Earth Summit; claim that such ratification, under Canadian Law, is a legally binding ?regulation? 97- 006 The Friends of the Oldman Alleged failure to effectively enforce Council decided to defer Canada Old Man River habitat protection sections of the consideration of the River II (1997) Fisheries Act and the Canadian Secretariat's notification Environmental Assessment Act; recommending preparation of charge of a de facto abdication of a factual record legal responsibility by the Canadian and provincial governments 97- 007 Instituto de Derecho Alleged failure to effectively enforce Process terminated Mexico Lake Chapala Ambiental environmental legislation regarding Secretariat is prevented, for (1997) the hydrological basin of Lake procedural reasons, from Chapala considering the submission 98- 001 Instituto de Derecho Alleged failure to effectively enforce Process terminated Mexico Guadalajara Ambiental, A. C., et al. the General Law on Ecological Secretariat determined (1998) Balance and Environmental submission criteria not met Protection in relation to explosions occurring in the Reforma area of the city of Guadalajara 98- 002 Hector Gregorio Ortiz Alleged failure to effectively enforce Process terminated Mexico Ortiz Mart�nez (1997) environmental legislation in relation to Secretariat determined Martinez lumbering operations at the "El Taray" submission criteria not met site in the state of Jalisco 98- 003 Department of the Planet Alleged violation of and failure to Secretariat reviewing United States Great Lakes Earth, et al. (1998) effectively enforce both U. S. domestic submission in light of U. S. laws and ratified U. S.- Canada treaties response and additional designed to protect the Great Lakes information to determine if factual record warranted 98- 004 Sierra Club of British Alleged failure to enforce section Secretariat reviewing Canada BC Mining Columbia, et al. 36( 3) of the Fisheries Act to protect submission in light of (1998) fish and fish habitat from the Canadian response to environmental impacts of the mining determine if factual record industry in British Columbia warranted Case no. and name Submitted by Issue Status Against country 98- 005 Academia Sonorense de Alleged failure to effectively enforce Process terminated Mexico Cytrar Derechos Humanos, A. C., environmental legislation by having Secretariat determined factual Lic. Domingo Guti�rrez authorized the operation of a record not warranted Mend�vil hazardous waste landfill (Cytrar) less (1998) than 6 kilometers away from Hermosillo, Sonora, in violation of official standards 98- 006 Grupo Ecol�gico Manglar, Alleged failure to effectively enforce Secretariat recommended Mexico Aquanova A. C. environmental laws with respect to the preparation of a factual record; (1998) establishment and operation of a Council considering whether to shrimp farm located in Isla del Conde, approve preparation of factual Nayarit record 98- 007 Environmental Health Alleged failure to effectively enforce Council unanimously decided Mexico Metales y Coalition, Comit� environmental law in connection with to instruct the Secretariat to Derivados Ciudadano Pro an abandoned lead smelter in Tijuana, prepare a factual record Restauraci�n del Ca��n del Baja California, that poses serious Padre y Servicios threats to the health of the Comunitarios, A. C. neighboring community and to the (1998) environment 99- 001 Methanex Corporation Alleged failure to effectively enforce Secretariat determined not to United States Methanex (1999) California's environmental laws and proceed further because the regulations related to water resource matter raised by the protection and to the regulation of submission is the subject of a underground storage tanks pending arbitration proceeding initiated by Methanex under chapter 11 of NAFTA 99- 002 Center for International Alleged failure to effectively enforce Secretariat recommended United States Migratory Environmental Law, et al. Section 703 of the Migratory Bird preparation of a factual record; Birds (1999) Treaty Act, which prohibits the killing Council considering whether to of migratory birds without a permit approve preparation of factual record 00- 001 Rosa Mar�a Escalante de Alleged failure to effectively enforce Process terminated Mexico Molymex I Fern�ndez environmental law regarding air Secretariat determined (2000) quality and to limit pollution from the submission criteria not met Molymex plant 00- 002 Neste Canada Inc. Alleged failure to effectively enforce Secretariat determined not to United States Neste (2000) environmental laws, as defined in the proceed further because the Canada environmental side agreement, matter raised by the relating to underground storage tanks submission is the subject of pending arbitration proceeding initiated by Methanex under chapter 11 of NAFTA Case no. and name Submitted by Issue Status Against country 00- 003 Hudson River Audubon Alleged failure to effectively enforce Process terminated United States Jamaica Bay Society of Westchester, Inc., Section 703 of the Migratory Bird Secretariat determined Save Our Sanctuary Treaty Act and sections of the submission criteria not met Committee Endangered Species Act with the (2000) proposal of a bicycle path through the Jamaica Bay Wildlife Refuge, in Queens, New York 00- 004 David Suzuki Foundation, et Alleged failure to effectively enforce Secretariat reviewing Canada BC Logging al. sections of Canada's Fisheries Act submission in light of (2000) against logging on private land in Canadian response to British Columbia determine if factual record warranted 00- 005 Academia Sonorense de Alleged failure to effectively enforce Secretariat reviewing Mexico Molymex II Derechos Humanos, environmental law in relation to the submission in light of Mexican Domingo Guti�rrez Mend�vil operation of the Company Molymex, response to determine if (2000) including operation without factual record warranted environmental impact authorization 00- 006 Comisi�n de Solidaridad y Alleged failure to effectively enforce Secretariat reviewing Mexico Tarahumara Defensa de los Derechos environmental laws by denying submission Humanos, AC environmental justice to indigenous (COSYDDAC) (2000) communities in the Sierra Tarahumara in the state of Chihuahua 01- 001 Academia Sonorense de Alleged failure to effectively enforce Secretariat requested and is Mexico Cytrar II Derechos Humanos, A. C., environmental laws in relation to the awaiting Mexican response Lic. Domingo Guti�rrez establishment and operation of the Mend�vil Cytrar hazardous waste landfill (2001) 01- 002 Names withheld pursuant to Alleged failure to effectively enforce Process terminated Canada AAA Article 11( 8)( a) (2001) obligations in the environmental side Secretariat determined criteria Packaging agreement to prohibit export to the not met territories of the other Parties of a pesticide or toxic substance 01- 003 Mercerizados y Tenidos de Alleged failure to effectively enforce Secretariat reviewing Mexico Dermet Guadalajara part of Mexico's environmental laws submission (2001) and failure to effectively enforce obligations in the environmental side agreement to provide procedural guarantees and private access to remedies Submissions Under the North American Appendi x II I Agreement on Labor Cooperation Case no. and NAO Against identifier Submitted by country Issue Status Time frame U. S. NAO International Mexico Alleged violations of workers' Submission accepted -- U. S. 2/ 14/ 1994- 940001 and Brotherhood of rights to freely organize into the National Administrative Office 10/ 12/ 1994 940002 Teamsters, United unions of their choice concluded that the information was Honeywell Electrical, Radio and insufficient to establish that Mexico and Machine Workers of failed to enforce its labor laws. General America However, acknowledging the strong Electric concerns raised by the submission, the United States proposed that all three NAFTA parties develop a comprehensive cooperative program to address these issues U. S. NAO International Labor Mexico Alleged intimidation and Ministerial consultations 8/ 16/ 1994- 940003 Rights Education and pressure then dismissal by the recommended -- a series of 12/ 4/ 1996 Sony Research Fund, company when workers seminars and other activities National Association of attempted to organize a union addressed issues of union Democratic Lawyers of registration. Follow- up review Mexico, Coalition for included issues stemming from a Justice in the related Mexican Supreme Court Maquiladoras, et al. decision U. S. NAO United Electrical, Mexico Alleged violations of freedom of Process terminated the union 1/ 25/ 1995 940004 Radio, and Machine association and the right to withdrew the submission prior to General Workers of America organize at a subsidiary in completion of the review process Electric Mexico U. S. NAO Human Rights Mexico Alleged violations of freedom of Ministerial consultations 6/ 13/ 1996- 9601 Watch/ Americas, association and the right to recommended -- on relations among 12/ 4/ 1997 SUTSP International Labor organize when employees of the international treaties, constitutional Rights Fund, and the Mexican government's Single provisions, and domestic law National Association of Trade Union Workers of the protecting freedom of association. A Democratic Lawyers of Fishing Ministry attempted to related seminar was held in Mexico receive recognition for their Baltimore, MD union U. S. NAO Communications Mexico Alleged threats and intimidation Process terminated submitters 10/ 11/ 1996- 9602 Workers of America, by company management withdrew submission after resolving 4/ 16/ 1997 Maxi Union of Telephone against workers trying to the dispute to their satisfaction Switch Workers of Mexico, organize a union and the Federation of Unions of Goods and Services Companies of Mexico U. S. NAO Human Rights Watch/ Mexico Alleged mistreatment or Ministerial agreement reached -- one 5/ 16/ 1997- 9701 American, discharging of pregnant conference and two outreach 5/ 30/ 2000 Gender International Labor employees at a maquiladora sessions held to discuss and Discrimi Rights Fund and the plant to avoid paying maternity educate workers on their rights nation National Association of benefits Democratic Lawyers of Mexico Case no. and NAO Against identifier Submitted by country Issue Status Time frame U. S. NAO Support Committee for Mexico Alleged violations of health and Ministerial agreement reached, 10/ 30/ 1997- 9702 Maquiladora Workers, safety, freedom of association, which resulted in: Mexico's pending Han Young the International Labor and the right to bargain agreement to promote the use of Rights Fund, and the collectively secret ballots in union representation National Association of elections and that workers be Democratic Lawyers of provided information pertaining to Mexico, et al. collective bargaining agreements; seminars on freedom of association issues and the structure and role of labor boards; and governmental exchange of information on techniques and policies to promote compliance with safety and health laws. (The ministerial consultations with submissions 9702 and 9703 regarding freedom of association and safety and health issues were held congruent to one another) U. S. NAO Echlin Workers Mexico Alleged violations of freedom of Ministerial agreement reached which 12/ 15/ 1997- 9703 Alliance, the association and occupational resulted in: Mexico's agreement to pending ITAPSA Teamsters, and 26 health and safety. Alleged promote the use of secret ballots in additional worker exposure to asbestos union representation elections and organizationsincluding and other toxic substances. that workers be provided information nongovernmental pertaining to collective bargaining organizations, human agreements; seminars on freedom of rights groups and association issues and the structure unions and role of labor boards; and governmental exchange of information on techniques and policies to promote compliance with safety and health laws. The ministerial consultations with submissions 9702 and 9703 regarding freedom of association and safety and health issues were held congruent to one another) U. S. NAO Association of Flight Mexico Alleged violation of freedom of Submission declined -- the U. S. 8/ 17/ 1998- 9801 Attendants, and the association for flight attendants National Administrative Office 10/ 19/ 1998 Flight AFL- CIO employed by Aerovias de agreed to undertake a research Attendants Mexico, S. A. de C. V. project with the three Parties on (Aeromexico). When workers freedom of association tried to strike, the government of Mexico took over the company's operations. Case no. and NAO Against identifier Submitted by country Issue Status Time frame U. S. NAO Florida Tomato Mexico Alleged child labor violations in Submission closed -- U. S. National 9/ 28/ 1998- 9802 Exchange the production of fruit and Administrative Office requested 10/ 4/ 1999 Tomato/ vegetables in Mexico additional information but received Child Labor nothing in a year U. S. NAO International Canada Alleged violations relating to Submission accepted and later 10/ 19/ 1998- 9803 Brotherhood of freedom of association, and withdrawn Canadian government 4/ 21/ 1999 McDonald's Teamsters, Teamsters delays in union certification and corporation held consultations, of Canada, the and the two sides reached an International Labor agreement Rights Fund, et al. U. S. NAO Organization of Rural Canada Alleged denial of workers' right Submission declined 12/ 2/ 1998 9804 Mail Couriers, to bargain collectively. Alleged 2/ 1/ 1999 Rural Mail Canadian Union of violation of occupational health Couriers Postal Workers, and safety issues, and National Association of protection against discrimination Letter Carriers, et al. U. S. NAO Association of Flight Mexico Alleged violations of freedom of Submission accepted -- public report 11/ 10/ 1999- 9901 Attendants, and the association, minimum issued recommending ministerial pending TAESA Association of Flight employment standards, and level consultations Attendants of Mexico occupational health standards U. S. NAO Coalition for Justice in Mexico Alleged violations concerning Submission accepted -- site visit 7/ 3/ 2000 2000- 01 the Maquiladoras, occupational health and safety conducted, and ministerial- level pending Auto- Trim/ current and former and compensation in cases of consultation recommended Custom workers, and 22 other occupational injuries Trim unions and nongovernmental organizations Case no. and NAO Against identifier Submitted by country Issue Status Time frame Mexico Telephone Workers United Alleged violation of freedom of Ministerial consultations requested 2/ 9/ 199511/ NAO 9501 Union of the Republic States association when a corporation Commission for Labor Cooperation 25/ 1997 Sprint of Mexico subsidiary closed prior to a issued report on the effects of scheduled election on union sudden plant closings on freedom of representation association in each NAFTA country Mexico Local 1- 675 of the Oil, United Alleged violations of freedom of Submission accepted -- public report 4/ 13/ 1998- NAO 9801 Chemical and Atomic States association and minimum issued and ministerial agreement pending per SOLEC Workers International employment standards. Also, signed in May 2000 on freedom of implementatio Union (? October 6?), et allegations of employment association and health and safety n of the al. discrimination and health and issues agreement safety violations (The ministerial agreement signed in May 2000 covered issues raised in NAO 9801, 9802 and 9803.) Mexico National Union of United Alleged violations of freedom of Submission accepted -- a ministerial 5/ 27/ 1998- NAO 9802 Workers, the Authentic States association, right to organize, agreement was signed on May Apple Workers' Front, the and minimum conditions of 2000, which included plans for pending per Growers Metal, Steel, Iron and work. Also, allegations of public outreach seminars for migrant implementatio Allied Industrial employment discrimination, workers, and government- to n of the Worker's Union, and failure to prevent occupational government meetings to discuss agreement the Democratic Farm injuries and illnesses, and migrant workers' rights Workers Front protection of migrant workers (The ministerial agreement signed in May 2000 covered issues raised in NAO 9801, 9802 and 9803.) Mexico Mexican United Alleged violations of freedom of Submission accepted -- a ministerial 8/ 4/ 1998 NAO 9803 Confederation of Labor States association, protection for agreement was signed on May Pending per Decoster migrant workers, safety and 2000, which included plans for implementatio Egg health, and workers' public outreach seminars for migrant n of the compensation. Also, allegations workers, and government- to agreement of employment discrimination government meetings to discuss migrant workers' rights (The ministerial agreement signed in May 2000 covered issues raised in NAO 9801, 9802 and 9803.) Mexico Yale Law School United Alleged failure to effectively Submission accepted -- U. S. 9/ 22/ 1998- NAO 9804 Worker's Rights States enforce the U. S. existing Department of Labor issued a new pending Yale/ INS Project minimum wage and overtime Memorandum of Understanding and protections Mexico issued report on U. S. labor violations. Ministerial consultation was recommended Case no. and NAO Against identifier Submitted by country Issue Status Time frame Canada Canadian Office of the Mexico Alleged failure to effectively Submission accepted two reports 4/ 6/ 1998pending NAO 98- 1 United Steelworkers of enforce labor legislation issued the first addressed freedom ITAPSA America, in concert covering occupational health of association; the second covered with 31 concerned and safety and freedom of occupation health and safety issues. organizations from the association of workers at a Ministerial consultations pending three NAFTA countries processing plant Canada Yale Law School United Alleged failure to effectively Submission closed -- Canadian 9/ 28/ 1998- NAO 98- 2 Worker's Rights States enforce the U. S. existing National Administrative Office 4/ 27/ 1999 Yale/ INS Project minimum wage and overtime considered the review inappropriate protections and closed the file in light of new Memorandum of Understanding U. S. NAO Organization of Rural Canada Alleged denial of workers' right Submission declined 12/ 2/ 1998 9804 Mail Couriers, to bargain collectively. Alleged 2/ 1/ 1999 Rural Mail Canadian Union of violation of occupational health Couriers Postal Workers, and safety issues, and National Association of protection against discrimination Letter Carriers, et al. Canada Labor Policy United Alleged failure to effectively Submission declined -- submitters 4/ 14/ 1999- 99- 1 Association and EFCO States enforce section 8( a)( 2) of the filed an appeal on June 15, 1999 6/ 15/ 1999 LPA Corporation U. S. National Labor Relations appeal Act pending Cases Filed Under NAFTA's Chapter 11 Investor- State Dispute Settlement Appendi x I V Mechanisms Through May 2001 Arbitration Petitioner rules Respondent Action and Claim Status Ethyl Corp. UNCITRAL Canada Action: Canadian passage of MMT Act in April Canadian court decision called for (U. S. company) 1997 prohibits the importation or interprovincial Canada to reverse its actions trade of MMT without ministerial authorization. giving rise to the claim. Canada Claim: Claim filed by Ethyl in April, 1997 states settled with Ethyl for $13 million in that Canadian actions through implementation of August 1998. the MMT Act discriminated against it in violation of national treatment, imposed prohibited performance requirements, and unfairly expropriated its property. Ethyl sought $250 million in damages. S. D. Myers UNCITRAL Canada Action: A ban on the export of polychlorinated A partial award was issued in (U. S. company) biphenyl (PCB) waste from Canada to the United November 2000 in favor of S. D. States was passed in late 1995. Myers with respect to claims Claim: S. D. Myers' October 1998 claim states involving national treatment and that Canadian actions through PCB export ban minimum standard of treatment discriminated against it in violation of national violations. However, the arbitral treatment and did not afford it a minimum panel found in Canada's favor in standard of treatment. Furthermore, the ban all other respects. Canada has imposed prohibited performance requirements applied to a Canadian federal and had the effect of expropriating S. D. Myers court to have the partial award property. S. D. Myers sought $20 million in against it set aside; that damages. proceeding is ongoing. Pope and Talbot UNCITRAL Canada Action: The Softwood Lumber Agreement The tribunal rejected jurisdictional (U. S. company) between the United States and Canada allows a challenges by Canada on January portion of Canadian timber sales to enter duty 26, 2000. The tribunal issued a free into the United States. partial award on June 26, 2000, Claim: Pope and Talbot filed a notice of dismissing the investor's claims arbitration on March 25, 1999, claiming that regarding performance Canada's implementation of the U. S.- Canada requirements and expropriation. Softwood Lumber Agreement breached On April 10, 2001, the tribunal Canada's obligations under chapter 11, including found that Canada did not violate national treatment, minimum standard of the national treatment treatment, performance requirements, and requirements. However, it found expropriation. Pope and Talbot sought damages that Canada partially violated the of $507 million. minimum standard of treatment provision in connection with the verification review process it imposed on the investor. Arbitration Petitioner rules Respondent Action and Claim Status United Parcel UNCITRAL Canada Action: Canada Post, a state enterprise and The tribunal has been formed and Service (UPS) government monopoly, operates Canada's postal some procedural decisions have (U. S. company) system. been made. Claim: In April 1999, UPS claimed that Canada Post abused its authority to run a postal monopoly by engaging in anticompetitive practices involving its nonmonopoly courier and parcel services in violation of Canada's national treatment and minimum standard of treatment obligations and the requirement that it supervise a ?government monopoly' and ?state entity. ' UPS seeks $160 million in damages. Azinian, et al. ICSID Mexico Action: A Mexican municipality dissolved its The tribunal issued an award on (U. S. company) Additional contract with Azinian after a Mexican federal November 1, 1999, in favor of Facility court found that the waste disposal company was Mexico on all counts, finding that not complying with the terms of the contract. the U. S. company misrepresented Claim: Azinian (a. k. a. DESONA) claimed that its qualifications. Mexico's cancellation of the contract violated the minimum standard of treatment and expropriation provisions of chapter 11. Azinian sought damages of $14 million in connection with this claim. Marvin Roy ICSID Mexico Action: The Mexican government reversed its The finance ministers from Mexico Feldman Additional policy of allowing Feldman (a. k. a. CEMSA) tax and the United States rejected (U. S. investor) Facility rebates on cigarette exports as contemplated by one of the proposed expropriation Mexican legislation and confirmed by Mexico's claims and allowed the others to Supreme Court proceed under chapter 11. The Claim: Feldman filed a formal notice of tribunal issued an interim decision arbitration in April 1999 claiming that Mexico took on preliminary jurisdictional issues actions, including refusing to allow CEMSA to on December 6, 2000, and will export cigarettes with rebates of excise taxes as hold a hearing on liability and provided by law, which resulted in expropriation damages in July 2001. of his investment. Later, he also cited violation of chapter 11's national treatment provisions. He seeks $40 million in damages. Arbitration Petitioner rules Respondent Action and Claim Status Metalclad ICSID Mexico Action: Mexican municipality of Guadalcazar in On August 30, 2000, the tribunal Corporation Additional the state of San Luis Potosi refused to grant upheld claims by Metalclad that (U. S. company) Facility Metalclad a municipal license to operate a Mexico breached its obligations hazardous waste treatment facility and landfill under two sections of NAFTA site and designated the Metalclad site as part of chapter 11- expropriation and an ecological preserve. minimum standard of treatment- Claims: Metalclad claimed in January 1997 that and ordered Mexico to pay the Mexico's refusal to grant a municipal license and investor $16.7 million. Mexico the creation of an ecological preserve that petitioned Canada's Supreme included its facilities violated several provisions Court of British Columbia to set of NAFTA chapter 11: national treatment, most aside the award. On May 2, 2001, favored- nation treatment, minimum standard of the court partially upheld the treatment, performance requirements, and award but also set aside the ruling expropriation. Metalclad sought $90 million in that the transparency provisions in damages. the NAFTA preamble could be read into the obligation to provide fair and equitable treatment under chapter 11's minimum standard of treatment provision. Waste ICSID Mexico Action: State of Guerrero and city of Acapulco The tribunal dismissed the case Management Additional granted a 15- year concession to Waste against Mexico on jurisdictional (U. S. company) Facility Management (through Acaverde) in early 1995. grounds, stating in its award that Acapulco agreed to pay Waste Management for the U. S. investor had not met the waste collection and disposal services and waiver requirements of chapter guaranteed that payment through Banobras, a 11. The U. S. investor resubmitted Mexican state- owned bank and Guerrero. the claim on September 27, 2000. Claim: Waste Management filed a notice of The new tribunal is not yet arbitration on September 29, 1998, asserting constituted. Acapulco, Banobras, and Guerrero failed to meet their contract obligations, including payment for services rendered. The claim states that these actions violated the minimum standard of treatment and expropriation obligations of NAFTA chapter 11. The U. S. investor is seeking $60 million in damages. Arbitration Petitioner rules Respondent Action and Claim Status Adams, et al. UNCITRAL Mexico Action: Mexican federal district court decision in No arbitral panel has been (U. S. investors) 1995 and its enforcement beginning in 1998 constituted. delivered possession of disputed property to individuals claiming to be the original Mexican landowners and evicted the U. S. investors by October 2000. Claim: Adams, et al., filed a notice of arbitration on February 16, 2001, claiming that Mexican government actions to exclude them from participating in legal proceedings to determine ownership and possession of the disputed land violated the national treatment and minimum standard of treatment provisions of chapter 11. Furthermore, they claimed the Mexican federal court decision caused actions that resulted in the expropriation of the investors' possessions. Adams, et al., is seeking $75 million in damages. ADF Group Inc. ICSID United States Action: The Virginia Department of The parties agreed to join, or (Canadian Additional Transportation determined that ADF's proposal combine, the jurisdictional and company) Facility to fabricate U. S. manufactured steel in Canada merits claims. The hearing will would not meet the Buy America requirements of likely be scheduled for spring its contract with the Virginia Department of 2002. Transportation. Claim: ADF filed a notice of arbitration in July 2000 claiming that the U. S. requirements that federally funded state highway projects use only domestically produced steel violate NAFTA chapter 11's prohibition against performance requirements. In addition, ADF claims that Buy America requirements violate both the national treatment and minimum standard of treatment provisions of chapter 11. ADF is seeking damages of $90 million. The Loewen ICSID United States Action: A jury awarded $500 million in A hearing on jurisdiction was held Group Additional compensatory and punitive damages in a civil in 2000 and the tribunal issued a (Canadian Facility suit against Loewen. Mississippi law requires, decision in favor of the claimants, Company) and the Mississippi Supreme Court ruled, that holding that the United States can an appeals bond equaling 125 percent of the be held liable under NAFTA award must be posted. Loewen settled the chapter 11 for decisions of state case for $175 million. courts, even in litigation between Claim: Loewen filed a claim in October 1998 purely private parties. alleging that the jury award and the Mississippi Another hearing on competence Supreme Court action amounted to a denial of and merits is scheduled for justice and violated the national treatment, October 2001. minimum standard of treatment, and expropriation provisions of NAFTA chapter 11. Loewen is seeking more than $600 million in damages. Arbitration Petitioner rules Respondent Action and Claim Status Methanex Corp. UNCITRAL United States Action: California banned the use of MTBE, a A jurisdictional hearing is (Canadian gasoline additive, by the end of 2002. scheduled for July 2001. company) Claim: Methanex submitted a claim in July 1999 alleging that the ban illegally expropriates the firm's U. S. investment, discriminates against it in favor of the U. S. ethanol industry, and denies it fair and equitable treatment. Methanex is seeking nearly $1 billion in damages. Mondev ICSID United States Action: Mondev sued the city of Boston and the The jurisdictional and merits International, Additional Boston Redevelopment Authority for breach of phases were joined. A tribunal Ltd. Faci li ty and interference with a real estate contract. The order regarding confidentiality was (Canadian jury found for Mondev and the court entered a filed on February 27, 2001. A company) $9.6 million judgment. The Massachusetts hearing will likely take place in late Supreme Judicial Court overturned the ruling. 2001 or early 2002. Claims: Mondev filed a notice of arbitration in September 1999 claiming that municipal authorities' actions and the court ruling amounted to an expropriation of Mondev's interest and a denial of justice, thus violating NAFTA obligations to provide a minimum standard of treatment to foreign investors. Mondev is seeking no less than $50 million. Appendi x V Objectives, Scope, and Methodology In preparation for considering future free trade agreements, the Chairman of the Subcommittee on Trade, House Committee on Ways and Means requested that we review the U. S. experience to date with cases brought under NAFTA's environment and labor side agreements and the treaty's chapter 11 investor- state dispute settlement provisions. In performing this work, we studied the institutional structure and principles of the side agreements and chapter 11 on investment. We also examined the processes that are used to investigate and settle disputes. Finally, we reviewed the cases that have been initiated under the side agreements and investment provisions, as well as the outcomes and disposition of these cases. To obtain information on the institutional structures and principles, we relied on our previous work in this area, and interviewed officials from the U. S. Trade Representative, the Environmental Protection Agency, and the Departments of Commerce, Justice, Labor, State, and Treasury. In addition, we reviewed the NAFTA agreement and the labor and environment side agreements. To obtain information on the submission process of the side agreements and chapter 11's investor- state dispute settlement process, we interviewed agency officials at EPA, the Departments of Interior, Labor, State, Justice, Commerce, Treasury, and the USTR. To further understand the environmental and labor submission processes, we reviewed procedural guidelines issued by the Commission for Environmental Cooperation and the Department of Labor's National Administrative Office. To gain greater insight into the investor- state dispute settlement process, we also interviewed representatives from nongovernmental entities and reviewed the United Nation's and World Bank's commercial arbitration rules referenced in the NAFTA. To obtain information on the cases initiated and their outcomes, we interviewed agency officials from the EPA, the Departments of Interior, Labor, State, Justice, Commerce, Treasury, the USTR, and the Commission for Environmental Cooperation. We also reviewed case information provided by the Department of Labor's National Administrative Office, the State Department, and the Web sites of the Commission for Environmental Cooperation, the World Bank, and Canada's Department of Foreign Affairs and International Trade. Finally, we interviewed representatives of nongovernmental entities with knowledge of the environment and labor submissions, as well as those familiar with cases brought under NAFTA's investor- state dispute settlement mechanism. We conducted our work from February to June 2001 in accordance with generally accepted government auditing standards. Appendi x VI GAO Contacts and Staff Acknowledgments GAO Contacts Phillip Herr (202) 512- 8509 Patricia Cazares- Chao (213) 830- 1021 Acknowledgments In addition to those listed above, Janey Cohen, Kim Frankena, Ernie Jackson, and Julia Souder made key contributions to this report. (320052) Lett er Ordering Information The first copy of each GAO report is free. Additional copies of reports are $2 each. A check or money order should be made out to the Superintendent of Documents. VISA and MasterCard credit cards are accepted, also. Orders for 100 or more copies to be mailed to a single address are discounted 25 percent. Orders by mail: U. S. General Accounting Office P. O. Box 37050 Washington, DC 20013 Orders by visiting: Room 1100 700 4th St. NW (corner of 4th and G Sts. NW) U. S. General Accounting Office Washington, DC Orders by phone: (202) 512- 6000 fax: (202) 512- 6061 TDD (202) 512- 2537 Each day, GAO issues a list of newly available reports and testimony. To receive facsimile copies of the daily list or any list from the past 30 days, please call (202) 512- 6000 using a touchtone phone. A recorded menu will provide information on how to obtain these lists. Orders by Internet: For information on how to access GAO reports on the Internet, send an e- mail message with ?info? in the body to: info@ www. gao. gov or visit GAO?s World Wide Web home page at: http:// www. gao. gov To Report Fraud, Contact one: Waste, or Abuse in Web site: http:// www. gao. gov/ fraudnet/ fraudnet. htm Federal Programs e- mail: fraudnet@ gao. gov 1- 800- 424- 5454 (automated answering system) GAO United States General Accounting Office Page 1 GAO- 01- 933 North American Free Trade Agreement Contents Contents Page 2 GAO- 01- 933 North American Free Trade Agreement Page 3 GAO- 01- 933 North American Free Trade Agreement United States General Accounting Office Washington, D. C. 20548 Page 3 GAO- 01- 933 North American Free Trade Agreement Page 4 GAO- 01- 933 North American Free Trade Agreement Page 5 GAO- 01- 933 North American Free Trade Agreement Page 6 GAO- 01- 933 North American Free Trade Agreement Page 7 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 8 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 9 GAO- 01- 933 North American Free Trade Agreement Page 10 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 11 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 12 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 13 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 14 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 15 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 16 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 17 GAO- 01- 933 North American Free Trade Agreement Briefing Section I: Environmental Side Agreement Page 18 GAO- 01- 933 North American Free Trade Agreement Page 19 GAO- 01- 933 North American Free Trade Agreement Slide 7: Outcomes Of the 31 submissions made, only 2 have resulted in the preparation of a factual record and its public release. One factual record involved Mexico, and the other involved Canada. The Secretariat is currently preparing another factual record that involves Mexico. In June 2000, the Council passed a resolution to have the Joint Public Advisory Committee conduct a review of the history of submissions and the submission process. A final report covering the issues raised during this review was recently released by the Joint Public Advisory Committee. Page 20 GAO- 01- 933 North American Free Trade Agreement Page 21 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 22 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 23 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 24 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 25 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 26 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 27 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 28 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 29 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 30 GAO- 01- 933 North American Free Trade Agreement Briefing Section II: Labor Side Agreement Page 31 GAO- 01- 933 North American Free Trade Agreement Page 32 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 33 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 34 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 35 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 36 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 37 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 38 GAO- 01- 933 North American Free Trade Agreement Page 39 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 40 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 41 GAO- 01- 933 North American Free Trade Agreement Page 42 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 43 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 44 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 45 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 46 GAO- 01- 933 North American Free Trade Agreement Briefing Section III: Investor- State Dispute Settlement Page 47 GAO- 01- 933 North American Free Trade Agreement Page 48 GAO- 01- 933 North American Free Trade Agreement Appendix I Appendix I Monetary Enforcement Assessments and Trade Sanctions in the North American Free Trade Agreement?s Labor and Environment Page 49 GAO- 01- 933 North American Free Trade Agreement Appendix I Monetary Enforcement Assessments and Trade Sanctions in the North American Free Trade Agreement?s Labor and Environment Page 50 GAO- 01- 933 North American Free Trade Agreement Page 51 GAO- 01- 933 North American Free Trade Agreement Appendix II Appendix II Citizen Submissions Under the North American Agreement on Environmental Cooperation Page 52 GAO- 01- 933 North American Free Trade Agreement Appendix II Citizen Submissions Under the North American Agreement on Environmental Cooperation Page 53 GAO- 01- 933 North American Free Trade Agreement Appendix II Citizen Submissions Under the North American Agreement on Environmental Cooperation Page 54 GAO- 01- 933 North American Free Trade Agreement Page 55 GAO- 01- 933 North American Free Trade Agreement Appendix III Appendix III Submissions Under the North American Agreement on Labor Cooperation Page 56 GAO- 01- 933 North American Free Trade Agreement Appendix III Submissions Under the North American Agreement on Labor Cooperation Page 57 GAO- 01- 933 North American Free Trade Agreement Appendix III Submissions Under the North American Agreement on Labor Cooperation Page 58 GAO- 01- 933 North American Free Trade Agreement Appendix III Submissions Under the North American Agreement on Labor Cooperation Page 59 GAO- 01- 933 North American Free Trade Agreement Page 60 GAO- 01- 933 North American Free Trade Agreement Appendix IV Appendix IV Cases Filed Under NAFTA's Chapter 11 Investor- State Dispute Settlement Mechanisms Through May 2001 Page 61 GAO- 01- 933 North American Free Trade Agreement Appendix IV Cases Filed Under NAFTA's Chapter 11 Investor- State Dispute Settlement Mechanisms Through May 2001 Page 62 GAO- 01- 933 North American Free Trade Agreement Appendix IV Cases Filed Under NAFTA's Chapter 11 Investor- State Dispute Settlement Mechanisms Through May 2001 Page 63 GAO- 01- 933 North American Free Trade Agreement Appendix IV Cases Filed Under NAFTA's Chapter 11 Investor- State Dispute Settlement Mechanisms Through May 2001 Page 64 GAO- 01- 933 North American Free Trade Agreement Page 65 GAO- 01- 933 North American Free Trade Agreement Appendix V Appendix V Objectives, Scope, and Methodology Page 66 GAO- 01- 933 North American Free Trade Agreement Page 67 GAO- 01- 933 North American Free Trade Agreement Appendix VI United States General Accounting Office Washington, D. 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