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Documentary Exposing How NAFTA’s Chapter Eleven 
Has Become Private Justice For Foreign Companies
Premieres February 5 at 10:00 p.m. (ET) on PBS (check local listings)

Newest Collaboration Between Bill Moyers And Sherry Jones
Investigating Our Democracy At Risk

     Three years after a Mississippi jury found a Canadian-based conglomerate guilty of fraud in attempting to put a family-owned Biloxi funeral home out of business, the Canadian company filed a claim against the United States, demanding $725 million in compensation.

     When California banned a gasoline additive that had contaminated drinking water throughout the state, another Canadian firm sued the US government to force citizens to pay nearly one billion dollars for its potential lost profits.

     In what one attorney called “an end-run around the Constitution,” corporations are using a little-known provision of the North American Free Trade Agreement (NAFTA) to challenge public laws, regulations and jury verdicts not only in the United States, but in Canada and Mexico as well.  And they are arguing those cases not in courts of law, but before secret trade tribunals.

     How can this be happening?  And why do so few people know about it?

     In the latest in their series of exposés on the secret recesses of American democracy, Bill Moyers and Sherry Jones uncover how multinational corporations have acquired the power to demand compensation if laws aimed at protecting the environment or public health harm them financially.  The one-hour documentary, BILL MOYERS REPORTS: TRADING DEMOCRACY, premieres February 5 at 10:00 p.m. (ET) on PBS (check local listings).

     “When the North American Free Trade Agreement became the law of the land almost a decade ago, the debate we heard was about jobs,” notes Bill Moyers.  “One provision was too obscure to stir up controversy.  It was called Chapter Eleven, and it was supposedly written to protect investors from having their property seized by foreign governments.  But since NAFTA was ratified, corporations have used Chapter Eleven to challenge the powers of government to protect its citizens, to undermine environmental and health laws, even attack our system of justice.”

     Speaking with legislators, public policy experts, community leaders, and citizens about the lawsuits filed under NAFTA’s Chapter Eleven, BILL MOYERS REPORTS: TRADING DEMOCRACY unravels the hidden repercussions of a treaty that was supposed to promote democracy through free trade, but now appears to have given deep-pocketed corporations the means to undermine democracy across international borders.

     The program explores the case of Methanex, a Canadian company that is the world’s largest producer of the key ingredient in the gasoline additive MTBE, which was found to be a carcinogen.  In 1995 MTBE began turning up in wells throughout California, and by 1999 had contaminated thirty public water systems. The state ordered that the additive be phased out.  Methanex filed suit under NAFTA’s Chapter Eleven, seeking $970 million in compensation for loss of market share and, consequently, future profits.

     With regard to the Methanex case, environmental attorney Martin Wagner tells Moyers, “they’re saying that California either can’t implement this protection or that they get a billion dollars.  People should be outraged by that.”

     As Moyers reports, many people who have been affected by MTBE contamination are indeed outraged.  But they are helpless to do anything.  The NAFTA tribunal that will decide the Methanex case – like all the tribunals hearing Chapter Eleven-based cases – is closed to the public.  Yet it is the taxpayers “who will foot the bill if the tribunal decides in favor of the Canadian company,” says Moyers.

     But the ramifications for the public go well beyond the loss of taxpayer dollars, explains journalist William Greider.  “If Methanex wins its billion dollar claim over California environmental law, there ain’t gonna be many states enacting that law, are there?” he says, adding that the NAFTA provision “hobbles the authority of government to act in the broader public interest.  And, in fact, that was the idea in the first place.”

     Addressing a Chapter Eleven case in which the Ethyl Corporation, an American manufacturer of another gasoline additive called MMT, successfully sued Canada over a ban on the product, Greider tells Moyers:  “Governments are already being intimidated by the mere threat of a claim being filed against some regulatory action.  If you’re a civil servant, or even a political leader, you’ve got to think twice when a corporate lawyer comes to you and says, quite forcefully, we’re going to hit you for a half a billion dollars if you do this.”

     Moyers also takes his investigation south of the border to the Mexican state of San Luis Potosí, where an American company called Metalclad tried to bulldoze over the protests of both state and local governments to reopen a toxic waste dump that many citizens feared was making them sick. When Metalclad was stopped by the local town council the company invoked Chapter Eleven and was awarded $16 million in compensation.  The crux of Metalclad’s victory was the Chapter Eleven phrase “tantamount to expropriation.”  As Martin Wagner explains:  “Not only do governments have to compensate when they expropriate or take away property, but they have to do so whenever they do something that is ‘tantamount to expropriation’.”

     Challenges being mounted under Chapter Eleven are not only directed toward regulatory activity, they are also successfully overruling jury decisions in civil courts of law.  The documentary explores a case in Mississippi where a Biloxi funeral home owner was awarded punitive damages by a jury in a civil suit against a large Canadian corporation called the Loewen Group. The local funeral home owner alleged that the Loewen Group had engaged in “fraudulent” and “predatory” trade practices, and the jury found against the Canadian company.  Three years later, the Loewen Group filed a Chapter Eleven claim against American taxpayers saying the jury was biased against Canadians, and in a preliminary ruling, the NAFTA tribunal has declared the Mississippi trial a legitimate target.  The Loewen suit, notes Moyers, “could conceivably open the U.S. civil justice system to challenge – including decisions of the United States Supreme Court.”

     This startling realization, and the knowledge that corporate giants are pushing to expand NAFTA to 31 more countries in the Western Hemisphere, prompts Moyers to ask, “Are we promoting democracy – as we claim – or trading it away?”

     TRADING DEMOCRACY is the latest collaboration between Bill Moyers and producer Sherry Jones, who produced TRADE SECRETS: A MOYERS REPORT in March 2001. Their previous productions include WASHINGTON’S OTHER SCANDAL, the Peabody-winning investigation of campaign finance scandals in the 1996 Presidential elections, and the Emmy-winning HIGH CRIMES AND MISDEMEANORS for PBS’s Frontline series.

     Major funding for BILL MOYERS REPORTS: TRADING DEMOCRACY was provided by The John D. and Catherine T. MacArthur Foundation; the Kohlberg Foundation, Inc.; The Herb Alpert Foundation; and The Bernard and Audre Rapoport Foundation. Corporate funding was provided by Mutual of America Life Insurance Company.

     BILL MOYERS REPORTS: TRADING DEMOCRACY is produced by Public Affairs Television, Inc., in association with Washington Media Associates, and is presented on PBS by Thirteen/WNET New York. Producer:  Sherry Jones; Editor: Jennifer Beman-White; Associate Producers: Matilda Bode, Christopher Buchanan ; Executive Editors:  Bill Moyers and Judith Davidson Moyers; Executive Producer:  Felice Firestone; Executives in Charge: Judy Doctoroff O’Neill, Judith Davidson Moyers; Executive Director of Special Projects:  Deborah Rubenstein.

     TRADING DEMOCRACY on videocassette is available at for home video use for $29.95 or with rights for group screenings at $89.95.
Press Contacts:
Adina Barnett
Kelly & Salerno Communications
Ellen Levene 
Kelly & Salerno Communications

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