Chemical company warns Canada of a potential lawsuit over pesticide ban

By Damon Vis-Dunbar
23 October 2008

One of the world’s largest chemical manufacturers may sue the Canadian government over the ban of a lawn pesticide in the Province of Quebec.

The Canadian government revealed on 21 October that, some two months earlier, it was served with a “Notice of Intent” by Dow AgroSciences LLC, a subsidiary of the U.S. Dow Chemical Company.  Under the rules of the North American Free Trade Agreement’s Chapter Eleven on investment, the notice sets in motion a 90-day period which must elapse before formally serving a claim.

Dow AgroSciences (DAS) complains that a lawn pesticide, 2,4-D, was banned in the Province of Quebec based on political motivations rather than scientific criteria. It cites, for example, internal Quebec government communication stating that the weed killer cannot be banned “on a scientific basis”, but rather on “less ‘firm’ ground such as the precautionary principle … or a policy decision resulting from the will of the population.”

DAS claims breaches of the Fair and Equitable Treatment and Expropriation provisions of NAFTA’s Chapter 11, and says damages are not less that $2 million.

While the DAS holds that national and international agencies have determined that the pesticide does not pose an unacceptable health risk, there are environmental and health organizations in Canada that remain skeptical. Indeed, due to public pressure, the Province of Ontario is also on the verge of banning 2,4-D, and the municipality of Halifax, in the Province of Nova Scotia, has already enacted a similar ban.

The notice of intent is one of several such letters received by Canada in the last several months, which have drawn attention to NAFTA’s investment protections in the national media. As ITN reported last month, a U.S. businessman, Melvin J. Howard, submitted a notice of intent in July, alleging expropriation of investments made in the health care sector.

Meanwhile, a law firm issued a press release in October announcing that it had recently submitted a notice of intent on behalf of a William Greiner and Malbaie River Outfitters, which organizes hunting and fishing trips in Quebec. According to the release, Mr. Greiner had fishing licenses revoked, which rendered his business “essentially worthless.”


Notice of Intent to Submit a Claim to Arbitration Under Chapter Eleven of the North American Free Trade Agreement, Dow Agrosciences LLC v. the Government of Canada, available from the website of the Canada’s Department of Foreign Affairs and International Trade: