Chemtura Loses Nafta Trade Case

A three-member arbitration panel has rejected claims by Chemtura that the Canadian government violated the North American Free Trade Agreement when it phased out use of the insecticide lindane for seed treatment. The specialty chemical maker had sought $78 million in compensation under NAFTA’s investor protection provisions. The measures give corporations the right to seek damages from the three signatory nations—Canada, the U.S., and Mexico—if they feel that their investments have been hurt by allegedly unfair and discriminatory actions, such as product bans. But Chemtura failed to persuade arbitrators that Canada unjustly banned lindane. “There is no scientific basis for banning the use of lindane product for canola seeds as there is no conclusive scientific evidence that such action is necessary to protect human health or the environment,” the company stated in its complaint. In addition to denying Chemtura’s claim for compensation, the panel also ordered the company to reimburse Canada for $3 million in legal costs. It’s not clear whether the decision will have any impact on a similar case, in which Dow AgriSciences is challenging Quebec’s 2006 law banning the cosmetic use of lawn pesticides (C&EN, Nov. 3, 2008, page 9).