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2004-01-29 17:41:56

How Nafta’s Chapter 11 Could Affect Filmmaking in The Bahamas

Despite the activity and the many meetings and conferences, some Bahamians are seemingly no wiser on why they are being asked to join various agreements that appear not to have their interest at heart.

In the absence of definitive positions as to what will happen to the Bahamian environment, and the government's ability to protect its citizens economically and socially, it is instructive to understand what has happened to other countries who have been down this path before.

The efforts to liberalize trade in this hemisphere are led by the US administration and leading US interests. The supporters promise democracy and improved standards of living for the hemisphere's poor but the record is different.

Writing in the New York Times on January 6, Columbia University professor, former chief economist at the World Bank and winner of the Nobel Prize in economics in 2001, Joseph E. Stiglitz made the following observations about Nafta.

“In the United States, the North American Free Trade Agreement has failed to fulfil the most dire warnings of its opponents and the most fervent expectations of its supporters. In Mexico, however, the treaty remains controversial and even harmful – as do America's efforts to liberalize trade throughout the hemisphere."

The evidence suggests that Nafta has not been the panacea to the poverty and economic disparities the Mexicans were led to believe it would be.

According to Mr. Stiglitz, when former US President Bill Clinton asked the Council of Economic Advisors about Nafta's economic importance he was told that “potential geopolitical benefits were far more important than the economic benefits."

Unlike the European Union, Nafta focused on the free movement of capital rather than the free movement of labour. And with its focus on the free movement of capital a new set of rights were enshrined.

These rights were not for the benefit of the millions of workers and small farmers but were for business and more specifically the foreign investor.

Of these new rights for business, Mr. Stiglitz wrote that they “potentially weakened democracy throughout North America."

Nafta's chapter 11 grants foreign investors the right to sue governments for environmental protection, and any laws that cut into their future profits on the grounds that these constitute unfair trade barriers. Special tribunals were established to hear these claims.

Mr. Stiglitz wrote that the special tribunals “lack the transparency afforded by normal judicial proceedings." Successful claimants receive direct compensation from the government.

Under Nafta's new rights for “foreign investors" Mr. Stiglitz wrote that “environmental, health and safety regulations have been attacked and put into jeopardy." To date suits with claims in excess of $13 billion have been filed.

Here are examples – gleaned from the Internet – of just how these new rights are being exercised. In 1998 the Ethyl Corporation sued Canada for its public health ban on MMT, a fuel additive. Canada chose to overturn its environmental provision and pay a $13 million to Ethyl, rather than risk $251 million in damages. The State of California came under similar attack for its ban on MTBE, a documented water pollutant that poses risks to human and animal health.

To bring this closer to The Bahamas, on Tuesday environmentalists and other interests raised concerns about the filming of the movie In The Blue. It is alleged that the production company, violated its agreement by placing a portion of an aircraft on a coral reef.

Ambassador for the Environment Keod Smith has been quoted as saying that the production company, Blue Water Productions Limited, had agreed that “there was to be no touching and no proximity to the reef at all."

Mr. Smith is further quoted as saying that he would “consult the Attorney-General for advice on how to proceed."

He is also alleged to have stated that interference with a coral reef is a clear breach of the Fisheries Act and that “No one has permission to damage or destroy the reef other than those given permission by the Governor General. Even the Minister of Fisheries cannot give you permission to do any kind of intrusive procedure to the reef."

Under Nafta's chapter 11, which is a key plank in the proposed FTAA, there is nothing that an Ambassador for the Environment, an Attorney General, a Minister of Agriculture and Fisheries or the Governor General could do against a foreign investor claiming damages before the special tribunal.

Film production companies are foreign investors who leave 10 percent of their production costs on location. Craig Woods, film commissioner at the Ministry of Tourism said that last year, media companies contributed approximately $20 million to The Bahamas. The bulk of that came from the films After the Sunset, which wrapped up production last month, and In the Blue, currently being filmed here.

If the film production company had come in under FTAA's version of Nafta's Chapter 11, any loss of production time and additional costs as a result of complying with the Fisheries Act's regulations would be grounds for the foreign investor to sue for damages before the special tribunal.

All the foreign investor would have to do is show the special tribunal that the government's actions in insisting that the foreign investor comply with the regulations such as those under the Fisheries Act, are a barrier to trade and will undermine his profit.

Mr. Woods, admitting that he was unaware of Nafta's chapter 11 said that the Ministry of Tourism was in the business of “encouraging and not discouraging business to The Bahamas."

He said that in negotiations with various investors the Ministry sought to have a “partnership, a win-win situation, with everyone operating within the guidelines."

“We have to examine all proposals and show that both sides are protected," he said. “We have a great product and we want people to know about it and come and see it."

Asked about the current concerns surrounding the alleged potential damage to the reef by the In the Blue production company, Mr. Woods said that the matter was being investigated and said nothing definitive could be decided from the photograph that appeared in a daily newspaper.

“The entire thing will be examined and a statement will be issued," he said.

C.E. Huggins, The Bahama Journal 

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