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NAFTA used for Adams Mine landfill lawsuit

Vito G. Gallo -- a Pennsylvania investor -- alleges in a notice filed with the Canadian federal government that the...


Vito G. Gallo — a Pennsylvania investor — alleges in a notice filed with the Canadian federal government that the Ontario government’s 2004 move to prohibit use of the Adams Mine in Northern Ontario as a landfill site was a form of expropriation. He has served notice that he intends to use provisions under NAFTA to sue Canada for $355.1-million. Gallo’s Ontario company owns and controls the Adams Mine property, a former open-pit iron ore mine about 10 kilometres southeast of Kirkland Lake, Ontario, that was being developed as a landfill to receive Toronto garbage shipped by rail.

Gallo will argue that Canada breached the controversial Chapter 11 of the North American free-trade agreement, a section that allows investors in Canada, Mexico and the United States to sue other NAFTA member governments if their investments have been unfairly damaged by law or regulation.

“The intent of Bill 49 was clear and beyond dispute: to shut down the Adams Mine property as a solid waste landfill site and to put the enterprise out of business,” the NAFTA filing says in documents that were served several months ago on the office of Canada’s deputy attorney general.

Gallo’s NAFTA filing says the site’s south pit is capable of receiving one million tonnes of non-hazardous waste per year and has a capacity of at least 20 million tonnes. The site had received approval under the province’s Environmental Assessment Act.

Gallo’s filing alleges that government interference took place after Dalton McGuinty’s Liberals came to power in Ontario.

“In October, 2003, a new government was elected in Ontario. [It] . . . began taking the first of several steps to shut down the Adams Mine landfill site outright and put the enterprise out of business,” the filing states.

The McGuinty government reversed earlier environmental approvals by the province and a go-ahead that the previous Progressive Conservative cabinet gave the plan in August, 1998. The Ontario legislation forbade waste disposal at the mine and also revoked related environmental approvals and retroactively extinguished “any and all causes of action that the enterprise may have had against the Government of Ontario regarding the Adams Mine site for anything that may have occurred over the last 15 years.”

The federal government, as signatory to NAFTA, must address the complaint even though the actions called into question were taken by a province. The federal government and Gallo must consult on the matter before he moves forward to submit a claim for compensation under NAFTA. If nothing is resolved, and 90 days have elapsed since the notice of intent to submit a claim was filed, he is entitled to ask for an arbitration panel to hear his case.

In October, 2002, Ohio firm S. D. Myers Inc. won $8.2-million in compensation under NAFTA after Canada temporarily banned exports of polychlorinated biphenyls (PCBs). That company had originally sued for US $20-million.


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