The Federal Court recently refused to order the Minister of Environment to convene a board of review for the purpose of reconsidering the government's decision to list BENPAT as a toxic under the Canadian Environmental Protection Act ('CEPA'). Goodyear, the largest user of BENPAT in Canada, asked the Minister to convene the board of review. The Minister refused and Goodyear brought an application for judicial review in the Federal Court, asking the court to quash the Minister's decision and require that a board of review be convened.
As a general proposition, it is very difficult to challenge a Minister's discretionary decisions. Decisions must be "unreasonable" before a court will intervene. After reviewing the record, the court concluded that the Minister's decision was reasonable.
Perhaps a finer and more interesting point relates to the court's consideration of when the Minister owes a party a duty of fairness in decision making.
One of Goodyear's allegations was that the Minister had a duty to treat it fairly when deciding whether to convene a board of review.
The court concluded the Minister did, on the facts, treat Goodyear fairly, but did not actually owe a duty of fairness to Goodyear at all. Though the decision clearly affected Goodyear's business interests, the court noted the Minister's decision did not relate to Goodyear's rights, privileges or interests. Rather, the Minister's decision was about the regulatory treatment of a chemical compound taking into account overall public interests.
This case makes for an interesting comparison to cases decided under international investment law, where regulatory decisions, ostensibly also made in the public interest, can be challenged in private arbitral panels by foreign corporations. For example, under Chapter 11 of the North American Free Trade Agreement (NAFTA), a foreign corporation can allege damages caused by governments when they make decisions which affect their investments.
A recent example is the Bilcon case. Bilcon is a U. S. Corporation. Its proposed quarry in Nova Scotia had been turned down after an environmental assessment. Bilcon sought recourse under the Chapter 11 NAFTA provisions. It successfully argued before an arbitration tribunal that Canada was liable under NAFTA for, among other reasons, having failed to provide it with fair and equitable treatment. Counsel for Bilcon commented that Canada "engaged in a clear violation of the rule of law and fairness."
Had a Canadian company been so affected, its only recourse would have been to the Federal Court, where odds of success are very low on a judicial review. This creates a significant difference in the rights of national and foreign corporations and perhaps was an unintended consequence of NAFTA. In the meantime, the government of Canada has filed a notice of application with the Federal Court of Canada seeking to set aside the award on jurisdiction and liability in the Bilcon case, arguing the Tribunal exceeded its jurisdiction and that the award is in conflict with the public policy of Canada.
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