Last month environment ministers of Canada, Mexico and the United States, acting as the Council of the Commission for Environmental Cooperation (CEC), issued a communiqué following its annual meeting stressing the importance of tri-lateral cooperation in pursuing market-based solutions to improve environmental performance in North America. But a number of cross-border environment-related issues are beginning to strain the once collaborative relationship between Canada and the US on such matters.

Noting that 2008 marked the fifteenth year of collaborative work under the North American Agreement on Environmental Cooperation (NAAEC), the environmental side accord to the North American Free Trade Agreement (NAFTA), the ministers stressed the importance of raising environmental standards across all three countries and in promoting the effective enforcement of environmental law.

Recent accomplishments cited included conservation action plans to support the migration of the monarch butterfly and Mexico’s efforts to protect the Vaquita porpoise. Joint efforts to eliminate the production and use in North America of dangerous chemicals such as DDT, chlordane, PCBs, mercury and, most recently, lindane, were also noted.

Cautiously worded acknowledgement was given to the environmental risks associated with increased trade and that close cooperation was essential to protect the North American public and environment. To this end a Green Suppliers Partnership to span the North American auto sector was announced and the CEC Secretariat was charged to prepare a comprehensive report on the opportunities and challenges for Green Building in North America.

A Changed North America

A key point noted in the CEC communiqué was that North America today is considerably different than when the three countries first entered into the North American Free Trade Agreement. In particular, the relationships between Canada and its southern neighbour appear to be undergoing significant changes.

After decades of cooperation on either side of the border, battles over environmental issues are becoming increasingly common and increasingly contentious. For example, DTE Energy’s power plants along the St. Clair River are generating more than electricity. They are also producing mercury emissions which are affecting the health of Canadians.

A trial date has been set by a Canadian Court in Sarnia to hear a lawsuit claiming DTE Energy is violating Canadian environmental law. DTE officials appeared in a Canadian court July 7 to answer charges concerning how its plants’ mercury emissions have affected Canada’s waters and soils downstream.

A water diversion project in North Dakota was stopped after the province of Manitoba challenged it in U.S. District Court on the basis it would lead to invasive species making their way into Canadian waters -- specifically Lake Winnipeg and the Hudson Bay.

Canadian smelting company Teck Cominco is facing a massive clean up bill for slag previously dumped into the Columbia River several miles upstream from the border. In addition, the zinc and lead refining plant is a large discharger of mercury. A U.S. Supreme Court denied the company’s appeal of a lower court ruling that said it was responsible for cleaning up the river. In rejecting Teck’s request for review, the Court let stand the federal appeals court decision that the Canadian company must comply with U.S. laws that hold polluters accountable for the contamination they create within the United States.

What these and other cases demonstrate is that under the right circumstances, local environmental laws can be used against a foreign company for actions occurring within a foreign jurisdiction. If this becomes a trend, the result may have a significant impact on international business relationships and the enforcement of environmental laws and regulations.