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A Long and Exhaustive Process for Enforcement 



The centerpiece of the Commission is its ability to review whether or not each 

 Party is enforcing its own domestic environmental laws. Unfortunately, this power 

 is so circumscribed that it is effectively meaningless. 



First, the definition of environmental law in the agreement is narrow and explic- 

 itly excludes laws regulating the exploitation of natural resources from the enforce- 

 ment provisions. The Commission can only consider laws related to the prevention 

 or control of pollutants, hazardous substances, and the protection of wild flora and 

 fauna, including endangered species. By narrowly defining environmental laws in 

 this way, laws such as food safety regulations or public health measures are ex- 

 cluded. 



In addition, only the repeated failure to enforce an existing law is reviewable by 

 the Commission. Environmental problems that are caused because of a lack of regu- 

 lation are not subject to review because there is no law to review. This kind of back- 

 ward criteria leads to a downward pressure against establishing an environmental 

 regulatory structure. 



For those narrow laws that are covered by the agreement, there are other criteria 

 that must be met to determine whether or not a government can be penalized for 

 not enforcing its environmental laws. The agreement allows for a Party to not en- 

 force its environmental laws if it "reflects a reasonable exercise of the agency's or 

 the official's discretion" or if it "results from a bona fide decision to allocate enforce- 

 ment resources to violations determined to have higher priorities" (annex II), creat- 

 ing a gigantic loophole for governments to argue their way out of a complaint. 



Finally, in order to be reviewable, there must be a persistent pattern of non- 

 enforcement," which is defined as "a sustained or recurring course of action or inac- 

 tion" (annex IV). This definition is extremely vague as to the length of time such 

 a behavior must be sustained before a complaint can be brought. Without a more 

 specific definition, the determination of persistent pattern of nonenforcement is left 

 subjective and undetermined: it could be 1 year or 5 years of nonenforcement. 



Enforcement: Punishing Governments, Not Polluters 



The administration has argued that the real "teeth" in this agreement is the abil- 

 ity to penalize a government for nonenforcement through sanctions. The compromise 

 struck between the three countries would allow sanctions to be levied against the 

 United States and Mexico, and fines against Canada, enforced through the Cana- 

 dian courts. 



Much of the debate has focused on Mexico's record of enforcing environmental 

 laws, rather than on the behavior of industries and whether or not they are comply- 

 ing with the law. We continue to believe that the industries themselves must be 

 held responsible and accountable for their own behavior. But this agreement pun- 

 ishes governments for not enforcing, not industries for not complying. 



If, after a long and exhaustive process, the Commission decides that sanctions or 

 fines can be levied, the agreement limits the amount of the penalty to no more than 

 $20 million the first year, and .007 percent of the three-way trade between countries 

 thereafter (which is roughly $20 million this year). Although $20 million appears 

 to be a significant amount, when it is a fme against governments, it is relatively 

 insignificant. Despite what the administration has argued, it is unlikely that the 

 government will pass on that cost to the offending industry. Structuring the agree- 

 ment this way puts the burden on governments, rather than encouraging companies 

 to comply with the law. 



Resolving Disputes in the Commission 



Like the NAFTA itself, the side agreement establishes a dispute resolution proc- 

 ess to allow Parties to bring complaints about nonenforcement. Only nonenforce- 

 ment cases will be resolved by this mechanism. All other environmental cases will 

 be heard in NAFTA's dispute resolution mechanism, which still remains closed to 

 the public, and unrepresentative of environmental interests. 



To see the disparity between the side agreement and the NAFTA, one only needs 

 to look at the dispute resolution process. In order for a Party to establish a panel 

 in the Commission, it must gain the support of two-thirds of the Parties. Compare 

 that requirement to the NAFTA dispute resolution which requires that only one 

 Party needs to approve in order to form a panel. The criteria in the environmental 

 side agreement are consistently more difficult to meet than in the NAFTA 



Only governments, not citizens, can request a panel. Although citizens can bring 

 a complaint to the Commission, citizen complaints do not lead to the formation of 

 a panel. If a citizen meets the regimented criteria that the Commission requires to 

 be a legitimate consideration, the most the Commission can do in response to that 

 complaint is issue a report, which requires the approval of two-thirds of the Parties. 



