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By Keith McArthur, The Globe and Mail 

S.D. Myers Inc., which treats PCBs, sued Ottawa under Chapter 11 of the North American free-trade agreement regulations forwrecking its Canadian business through the ban.

The NAFTA tribunal has yet to award damages in the case. Canada will argue that S.D. Myers did not suffer as a result of the exportban, government officials said yesterday.

But S.D. Myers's lawyer Barry Appleton said the damages could be in the range of $40-million to $50-million.

"I don't think this is a good day up in Ottawa," he said. "This is a good day for consumers because consumers were forced to pay twoto five times more to destroy their PCBs."

International Trade Minister Pierre Pettigrew said the government is disappointed "with certain aspects of the tribunal's findings."

"It is important to remember, however, that nothing in this decision prejudices Canada's right to protect the environment," theMinister said through a spokesman.

But the Sierra Club, an international environmental group, is worried about the environmental implications of the NAFTA ruling.

Sierra Club trade specialist Christine Elwell said the ruling removes teeth from the 1989 Basel Convention-a treaty Canada signed-thatsays each country should deal with its own hazardous waste. She worries about the implications of NAFTA rulings on otherenvironmental treaties.

"It's a devastating blow not only for a country's domestic ability to set its own standards, but also to the Basel Convention," she said.

The NAFTA ruling relates to November, 1995, when Sheila Copps, then environment minister, banned the export of Canadian PCBwaste.

Although the ban was lifted in February, 1997, it allowed Canadian firms to control the market for 15 months, and kept cheaper U.S.alternatives out of the market.

The U.S. government closed its borders to PCBs in August, 1997. S.D. Myers is trying to persuade Washington to open the border,but in the meantime is using NAFTA in an effort to recoup the lost Canadian business opportunities due to the 1995 ban.

"While Canadian consumers supported our company, the Canadian government took unfair actions to hurt us only because we wereAmerican," said Dana Myers, president of S.D. Myers. "That's not fair and we are pleased that the NAFTA tribunal has come tothat conclusion."

The tribunal ruled that Canada treated U.S. investors less favourably than its own.

One member of the panel suggested that Ottawa acted to protect Canadian companies, and not for environmental reasons.

University of Manitoba law professor Bryan Schwartz said Ms. Copps' "protectionist intent . . . was reflected in decision-making atevery stage of that led to the ban."

He said government officials believed that shipping PCBs to the United States would have been better for the environment because itwould have helped expedite the cleanup of the harmful chemicals.

Only a handful of decisions have been rendered under Chapter 11, which allows corporations to sue foreign NAFTA nations if theybelieve their assets have been hurt by government measures.

In 1997, Virginia-based Ethyl Corp. challenged Canada's ban on MMT, a gas additive produced only by the company. Ottawa revokedthe ban and paid Ethyl about $19-million (Canadian) before a NAFTA panel of arbitrators could rule on the case.