Reuters

CANADA: February 12, 2001 OTTAWA - Canada has taken the unusual step of asking a top court to reverse a ruling by a North American free trade tribunal which found Canada was wrong for banning exports of deadly PCB waste chemicals in the 1990s - a decision which could still carry a fine of up to $20 million.

"While Canada agrees with certain aspects of the NAFTA tribunal's ruling, we are seeking this review because we believe the tribunal exceeded its jurisdiction in several key elements of the award," International Trade MinisterPierre Pettigrew said in a statement.

The appeal on the case, the first Canada has ever lost under NAFTA's controversial Chapter 11, will be made to the Federal Court of Canada.

Canada lost to US company S.D. Meyers of Ohio in November under the chapter, an "investor-state" provision which lets companies sue countries to protect their investments.

The tribunal said Canada blocked the export of polychlorinated biphenyls to the US for destruction in order to protect a domestic company able to perform the same task - although the US banned PCB imports less than a year after Canada made its move.

The Canadian government will argue the tribunal exceeded its jurisdication and violated Canadian public policy.

A broader fear is that private corporations could interfere in Canada's ability to oversee its environment, including the control of its abundant fresh water supply.

A government official said the Federal Court would likely not hear the case before the summer.

A win before the Federal Court could let Canada avoid paying damages, the next stage of review for the tribunal.

Canada will seek a stay of the tribunal's damage proceedings until the Federal court rules on the case.

Environmental groups have put heavy pressure on the government to appeal the tribunal's decision.

Mexico is disputing a NAFTA tribunal's decision to award a US hazardous waste disposal company, Metalclad, $17 million after its government submitted to local pressure and stopped construction of the facility.