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
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
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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