Saturday, January 12, 2008

Supreme Court Decision Rattles Canadian Mining Industry – Right to Pollute Under Threat – Teck Cominco Execs Vow Fight, say No to Cleaning Environment

A U.S. court action against Teck Cominco for its activities in Canada flies in the face of legal convention, commentators say.

Long arm of US law reaches across the border

After nearly 90 years of belching heavy metal waste into the Columbia River in Trail, B.C., a lead and zinc smelter owned by Teck Cominco Ltd. has become engulfed in a pollution battle that is changing international rules of environmental litigation.

Environmental lawsuits are as regular as rain for mining companies, which make it their business to extract the Earth's mineral riches with toxic chemicals. But what makes the Teck case so unnerving is that a Canadian company accused of contaminating Canadian waters is not having its day in a Canadian court.

(Some would say it's about time:

Canadian Government Urged to Rein in Mining Sector

Instead, the Vancouver-based company has spent the past three years fighting pollution claims launched by Washington's Confederated Tribes of the Colville Reservation in the state's courts. The lawsuit alleges Teck is subject to the jurisdiction of Washington's courts because contaminants from the now-closed Trail smelter floated downriver across the border and allegedly (after 90 years of belching heavy metals?, ahem) spoiled (poisoned) the Washington waters of the mighty Columbia and a tributary lake.

A jurisdictional stretch? You would say yes if you followed the course of cross-border pollution disputes in the past century (using this argument women's voting rights would be a stretch). Traditionally, bilateral pollution disputes have been settled through (cozy) diplomatic channels. Sulphur dioxide emissions from the Trail smelter in the early 1900s (that is an ERA we want to return to?) prompted Canada and the United States to appoint a joint commission to consider allegations that the smelter was damaging the crops of Washington apple growers. In the end, the smelter's then owners agreed (were not compelled) to invest more than $20-million (U.S.) in upgrades to reduce the emissions (how magnanimous).

The commission's resolution became a (unsatisfactory) model for subsequent cross-border pollution disputes. But the Supreme Court of the United States dealt a serious blow to (made a considered decision to end) the diplomatic tradition on Monday when it refused to hear Teck's appeal. Teck argued that a lower court in Washington erred in 2006 when it ruled that the Vancouver company's activities in Canada (so, its okay to poison citizens of another country?) were subject to U.S. jurisdiction.

By letting the decision of Washington's Ninth Circuit Court stand, legal experts say the Supreme Court left companies on both sides of the border vulnerable (so long as they pollute) to the extraterritorial reach of foreign courts. Using the Washington ruling as a precedent, U.S. or Canadian companies seen as the authors (perpetrators) of such cross-border environmental problems as acid rain and declining fish stocks could find themselves facing private litigation in foreign courts, in some cases long after the issues have been addressed (unsatisfactorily) through diplomatic negotiations.

"This decision is going to have a lot of unintended (intended) consequences," said Thomas Campbell, a Houston-based lawyer with Pillsbury Winthrop Shaw Pittman LLP who leads Teck's litigation team. "We have [(finally) given] ... individuals the right to pull a foreign company into a domestic court . ... As a result of this case, people are now referring to the Canadian and United States border as an artifact (the heavy metals consider it to be)."

With so much at stake (clean water), it is no surprise that a parade of some of North America's most influential legal experts, authorities and business lobbies (who drink bottled?) waded into the case (but not the river). When the company appealed to the Supreme Court, it hired former U.S. solicitor-general Theodore Olson. Backing up the company were a host of Canadian (pro-pollution) business lobby groups. Even the lofty Harvard Law Review sounded the alarm, fretting last year that the Washington court's extraterritorial behaviour "risks creating a precedent that would unilaterally disrupt pollution, comity and friendly trade relations (war with Canada?)" between the countries.

There are those who will say that pollution is a borderless crime and any court that succeeds in holding companies accountable (rather than unaccountable?) for environmental sins is a good court. "We are talking here about a large smelter which was dumping large amounts of waste on a sustained basis. It had a direct and foreseeable impact on our water," said Paul Dayton, a Seattle lawyer with Short Cressman & Burgess who represented the Colville Tribe.

But overlooked in this argument is the long-standing (outmoded) legal principle that litigation targets (wealthy "multinational" corporations) have the right to defend activities on their home turf in their home country (with the most sympathetic mining laws). When companies (poor indigenous tribes) are pulled into foreign courts they are at an immediate disadvantage because they had no influence shaping the relevant legislation and are seen as outsiders by foreign judges or juries (it cuts both ways) .


Malcolm Ruby, a cross-border litigation expert with Gowling Lafleur Henderson LLP, predicted the Teck case will prompt "international environmental class actions to take off. This will be the tip of the iceberg. (i.e. there are many such polluters)"

Dennis Mahony, a Torys LLP environmental specialist, said: "This raises the stakes for any company whose (nefarious) activities have a cross-border impact."

How did Teck land in such a mess? The easy answer is that Teck was slow to respond (i.e. noncompliance ~didn't care if people ingested heavy metals) to an U.S. Environmental Protection Agency order in 2003 calling for Teck to investigate the alleged U.S. contamination. That left the Colville Tribe free to file a so-called citizen lawsuit forcing the company to comply. (QED) By the time Teck agreed in 2006 to put $20-million in escrow to study river pollution, the tribe's case was already working its way through Washington's courts.


While the experts debate the jurisdiction ruling, the Teck case now heads back to the lower Washington court to address the merits of the case against the smelter. The company appears to have no interest in settling the case. (after 90 years of indifference, a few more won't matter)"

"It's not over. We have a number of options for arguing our case (none of which involve cleaning the environment)," Mr. Campbell said.

Here is the full article.

Another Mining Industry Classic. (See: Mining Industry Propaganda for more.)