|G LOSSARY OF D EFINED T ERMS|
|ANFO||Ammonium Nitrate Fuel Oil|
|Bilcon||Bilcon of Nova Scotia, a limited liability company incorporated on 24 April 2002 in Nova Scotia and a wholly owned subsidiary of Bilcon of Delaware|
|Blasting Conditions||Blasting conditions added to the Approval dated 30 April 2002 by the Province of Nova Scotia "for the construction and operation of a Quarry, at or near Little River, Digby County in the Province of Nova Scotia" pursuant to Part V of the Nova Scotia Environment Act|
|Blasting Guidelines||Guidelines for the Use of Explosives In or Near Canadian Fisheries Waters, Canadian Technical Report of Fisheries and Aquatic Sciences 2107 by D.G. Wright and G.E. Hopky, 1998|
|CEA Agency||Canadian Environmental Assessment Agency|
|CEAA||Canadian Environmental Assessment Act, S.C. 1992, c. 37 (in force until 6 July 2012)|
|Counter-Memorial||Respondent's Counter-Memorial dated 9 December 2011|
|DFAIT||Canada's Department of Foreign Affairs and International Trade|
|DFO||Canada's Department of Fisheries and Oceans|
|Draft EIS Guidelines||Draft Environmental Impact Statement Guidelines released for public comments on 10 November 2004|
|EIS||Environmental Impact Statement|
|EIS Guidelines||Environmental Impact Statement Guidelines issued by the Joint Review Panel for the Whites Point project on 31 March 2005|
|Fisheries Act||Fisheries Act, R.S.C. 1985, c. F-14, as in force from 11 May 2000 to 31 March 2003|
|FTC Notes||Notes of Interpretation of Certain Chapter Eleven Provisions, Free Trade Commission, 31 July 2001|
|GQP||Global Quarry Products, Partnership between Nova Stone and Bilcon of Nova Scotia entered into on 24 April 2002|
|HADD||Harmful alteration, disruption or destruction of fish habitat|
|ILC Articles||Articles on Responsibility of States for Internationally Wrongful|
|Acts, adopted by the International Law Commission (ILC) in 2001|
|iBoF||Inner Bay of Fundy|
|Investors' Article 1128 Response||Investors' Response to the Submission of the United States of America pursuant to NAFTA Article 1128, dated 17 May 2013|
|JRP||Joint Review Panel|
|JRP Hearing Transcript||Whites Point Quarry and Marine Terminal Public Hearing Transcript|
|JRP Report||Environmental Assessment of the Whites Point Quarry and Marine Terminal Project: Joint Review Panel Report, October 2007, submitted to the Canadian Minister of the Environment and the Nova Scotia Minister of Environment and Labour|
|Memorial||Investors' Memorial, dated 25 July 2011|
|NAFTA||North American Free Trade Agreement, entered into force on 1 January 1994|
|Notice of Intent||Notice of Intent to submit a Claim to Arbitration, dated 5 February 2008|
|Nova Stone||Nova Stone Exporters, Inc., a corporation formed pursuant to the laws of Nova Scotia, Canada|
|NSDEL||Nova Scotia Department of Environment and Labour|
|NSEA||Nova Scotia Environment Act, S.N.S. 1994-95, c. 1|
|NWPA||Navigable Waters Protection Act, R.S.C. 1985, c. N-22 (as in force from 1 March 1999 to 10 May 2004)|
|PCA||Permanent Court of Arbitration|
|Rejoinder||Respondent's Rejoinder Memorial, dated 21 March 2012|
|Reply||Investors' Reply Memorial, dated 21 December 2011|
|TOR||Terms of reference of the Joint Review Panel|
|UNCITRAL Rules||Arbitration Rules of the United Nations Commission on International Trade Law, 1976|
|US Article 1128 Submission||Submission of the United States of America pursuant to NAFTA Article 1128, dated 19 April 2013|
|Whites Point project||A quarry and a marine facility proposed to be constructed and operated by Bilcon at Whites Point in Digby Neck, Nova Scotia|
Mr. William Ralph Clayton Bilcon of Delaware, Inc.
Mr. William Richard Clayton 1355 Campus Parkway
Mr. Douglas Clayton Monmouth Shores Corporate Park
Mr. Daniel Clayton Neptune, NJ 07753
PO Box 3015 United States of America
Lakewood, NJ 08701
United States of America
whether there are - or may be - any documents that are responsive to the Investors' request and were created after 5 February 2008. If that is the case, the Tribunal requests the Respondent to provide... a short submission... in support of its position that it need not produce any documents created subsequently to the Notice of Intent in the present proceeding.
The Tribunal invited the Investors to comment on the Respondent's clarification and/or submission.
For the Investors:
Mr. Barry Appleton
Mr. Gregory J. Nash
Mr. Frank S. Borowicz
Dr. Alan Alexandroff
Mr. Kyle Dickson-Smith
Mr. Josh Scheinert
Ms. Celeste Mowatt
Mr. Chris Elrich
Professor Robert Howse
Ms. Sue Ki
Mr. Josh Hauser
Mr. John Evers
Mr. David Consky
Ms. Jessica McKeachie
Ms. Jennifer Montfort
Ms. April Jangkamolkulchai
Ms. Sandra Albia
Ms. Mary Grace Ruaya
Ms. Lauren Wilcocks
Mr. Michael Pogorzelski
Mr. Vasyl Didukh
Mr. William Richard Clayton
Mr. John Lizak
Mr. Paul Buxton
Mr. David Estrin
Professor Murray Rankin
For the Respondent:
Mr. Scott Little
Mr. Shane Spelliscy
Mr. Jean-François Hébert
Mr. Stephen Kurelek
Mr. Reuben East
Mr. Adam Douglas
Mr. Robert Connelly
Ms. Elizabeth Hrubesz
Ms. Cheryl Fabian-Bernard
Mr. Alex Miller
Ms. Chris Reynolds
Ms. Jasmine Rokolj
Mr. Alex George
Mr. David Bartol Mr. Kevin LeBlanc Mr. Neil Bellefontaine Mr. Stephen Chapman Mr. Christopher Daly Mr. Bruce Hood Mr. Mark McLean Mr. Bob Petrie Mr. Lawrence E. Smith
The Arbitral Tribunal:
Judge Bruno Simma Professor Donald McRae Professor Bryan Schwartz
For the Registry:
Dr. Dirk Pulkowski Ms. Kathleen Claussen
(a) A declaration that Canada has acted in a manner inconsistent with its Chapter 11 obligations of national treatment, most favored nation treatment, and international law standards of treatment, in breach of its obligations under NAFTA Articles 1102, 1103 and 1105;
(b) A declaration dismissing Canada's jurisdictional objections;
(c) A declaration that the claim proceed forthwith to the Quantification of Damages;
(d) Damages arising from the delays, suppression of evidence, and non-production of documents by Canada; and
(e) An award in favor of the Investors' for all costs, disbursements and expenses incurred in the merits phase of the arbitration for legal representation and assistance, plus interest, and costs of the Tribunal.31
Canada respectfully requests that this Tribunal render an award dismissing the Claimants' claims in their entirety and ordering the Claimants to bear the costs of the arbitration in full and to indemnify Canada for its legal costs, disbursements and expenses incurred in the defence of this claim, as well as the costs of the Tribunal, plus interest. Canada also requests the opportunity to make submissions on the costs that it has been forced to incur as a result of this claim.32
Given the surrounding biophysical and human environment of the Digby Neck and the sheer magnitude of the Whites Point project, any proponent who had seriously considered the regulatory environment would have known that it was naive to believe that only a ‘minimal environmental assessment' would be required.51
Having reviewed the blasting plan, Jim Ross, the section head of DFO's Habitat Management Division, wrote to Bob Petrie at NSDEL that the blasting plan "seems to be within the Guidelines ". This conclusion was shared by Dennis Wright, a co-ordinator of Environmental Affairs at DFO's Central and Arctic Region and a co-author of the DFO Guidelines referred to in 10.h.15. Mr. Wright also informed Mr. Ross that the DFO Guidelines "are designed chiefly to protect fish," adding "When we use them for protection of marine mammals, we are really flying by the seat of our pants". [...] Jerry Conway, a whale specialist at the DFO, wrote to Mr. Ross saying that "I have no concerns in respect to marine mammal issues in respect to this specific proposal".75
From the time of their review of GQP's first rudimentary project description, government officials believed that these statutory grounds were likely to be engaged by this project. In particular, DFO officials commented early on that "given the level of public concern, potential for numerous federal CEAA triggers and environmental issues as well as the size, extent and duration of the overall project a Panel Review may be warranted". They even discussed this possibility with GQP representatives at their January 6, 2003 meeting.122
... As to the type of EA that would be used, officials advised GQP that while "comp study is more than likely" there was "possibility of a panel" in light of the "likely significant effects" and "public concerns" being voiced over the project. So that a decision could be made on the type of assessment, officials requested GQP to submit a more thorough project description.126
a "Highlights and Action Items" summary prepared after the meeting acknowledged the possibility that the project could be referred to a review panel, indicating that "Comprehensive Study is the most likely federal EA track" but that "[p]ublic reaction to Scope and MOU may influence EA track decision". Mark McLean's notes of this meeting also indicate that "public review/concerns can bump CSR [Comprehensive Study Review] to panel" and "will be challenged on decision on comp study," implicitly acknowledging the public concerns that could warrant referral to a panel.128
Once Nova Scotia confirmed its interest, DFO officials prepared a briefing note for decision to DFO Minister Thibault, recommending that he refer the project to the Minister of the Environment for referral to a review panel. This was the first decision DFO officials had requested from their Minister in the context of the Whites Point EA. Over the course of the previous ten months, DFO officials had provided him with informational briefings to keep him and his office advised on the matter. Given that Minister Thibault was the Member of Parliament for Southwest Nova (which includes the Digby Neck), it is not surprising that he was interested in the proposal. However, as both Minister Thibault and Neil Bellefontaine make clear, the determinations made by DFO officials were their own, and Minister Thibault did not in any way interfere in the work of officials, or otherwise direct or instruct them in their work. The only guidance that the Minister ever offered was that the EA process used to review the Whites Point project would "need to ensure public concerns over the project were adequately heard and addressed" and that it was to be "a full and fair comprehensive environmental assessment of the proposal that strictly complied with the rules, did not cut any corners and allowed the public to have a voice".132
1. The Panel recommends that the Minister of Environment and Labour (Nova Scotia) reject the proposal made by Bilcon of Nova Scotia to create the Whites Point Quarry and Marine Terminal and recommends to the Government of Canada that the Project is likely to cause significant adverse environmental effects that, in the opinion of the Panel, cannot be justified in the circumstances.
2. The Panel recommends that the Province of Nova Scotia develop and implement a comprehensive coastal zone management policy or plan for the Province.
3. Because of the special issues associated with coastal quarries, the Panel recommends a moratorium on new approvals for development along the North Mountain until the Province of Nova Scotia has thoroughly reviewed this type of initiative within the context of a comprehensive provincial coastal zone management policy and established appropriate guidelines to facilitate decision-making.
4. The Panel recommends that the Province of Nova Scotia develop and implement more effective mechanisms than those currently in place for consultation with local governments, communities and proponents in considering applications for quarry developments.
5. The Panel recommends that the Province of Nova Scotia modify its regulations to require an environmental assessment of quarry projects of any size.
6. The Panel recommends that the Canadian Environmental Assessment Agency develop a guidance document on the application of adaptive management in environmental assessments and in environmental management following approvals.
7. The Panel recommends that Transport Canada revise its ballast water regulations to ensure that ships transporting goods from waters with known risks take appropriate measures to significantly reduce the risk of transmission of unwanted species.147
In 2002, the Faculty of Planning and Architecture of Dalhousie University, where Jill Grant was employed, together with the same Ecology Action Centre, organized a three-day conference that advocated for the "greening" of Nova Scotia. Jill Grant was a moderator at the Conference.
Question 8 of the CEA Agency's Panel Interview Questions, specifically asked potential panelists to address real, potential or perceived conflicts of interest. The candidates' answers have not been disclosed.158
This Chapter applies to measures adopted or maintained by a Party relating to:
(a) investors of another Party;
(b) investments of investors of another Party in the territory of the Party; and
(c) with respect to Articles 1106 and 1114, all investments in the territory of the Party.
The failure to grant the license to operate a 3.9 quarry to Nova Stone on April 30, 2002 constitutes a measure which directly relates to the Investor and its Investment. The joint-venture agreement called for the initial operation of a 10 acre quarry. This direct inclusion in the agreement satisfies the test for a "legally significant connection" between the Investors and measure established in Methanex. Furthermore, the industrial approvals to operate a quarry were the contribution that Nova Stone was making to the joint venture. The failure to obtain licenses hence directly and specifically relates to the Investment the Investor was seeking to make. Bilcon was directly involved in this project from the beginning.265
An investor may not make a claim if more than three years have elapsed from the date on which the investor first acquired, or should have first acquired, knowledge of the alleged breach and knowledge that the investor has incurred loss or damage.
There are serious financial consequences which arise from our inability to operate in accordance with the Permit, and we are imploring the Province to stand behind the authority and enforce the conditions of the Permit.
The Company has suffered significant costs due to the delay and the jurisdictional machinations employed by DFO. This Company has acted in good faith and we expect the same of the Province in interpreting and enforcing the Permit. We feel we have satisfied all conditions and we ask that you confirm that for us so that we may proceed with the work contemplated by the Permit. To do otherwise will make the Province complicit in the DFO conduct.
Failure to act will cause severe economic hardship to the Company and the project. It will also send a clear message on the excessive difficulty and high level of uncertainty that companies face when they seek to invest in Nova Scotia.284
Further, Bilcon entered into a new lease agreement with the owners of the land containing the 3.9 ha parcel that was subject to the industrial approval. It was thus Nova Stone and the Investors themselves who invalidated the industrial approval.285
a) The conduct of the federal Department of Fisheries and Oceans, the Nova Scotia Department of Environment and Labour, jointly and separately, in relation to Bilcon's attempt to operate a quarry at Whites Point, which was set in motion by the industrial approval of its application on April 30, 2002. This measure includes:
i) The ongoing effect of the imposition, interpretation and application of blasting conditions on the Investment such that they were never able to be satisfied;
ii) The taking of jurisdiction by the Department of Fisheries and Oceans to address questions outside of the purported marine issues when it lacked said jurisdiction;
ii. The ongoing effect of the requirement to subject the Investment to a Comprehensive Study.
b) The actions of the federal government and government of Nova Scotia, jointly and separately, to compel the Investors and the Investment to seek approval from the Joint Review Panel, which resulted in ongoing harm and damage to the Investors beginning on September 10, 2003 and continued through the Joint Review Panel process until the final Ministerial decisions. This measure includes:
i) Continuous unlawful and unilateral actions of the Department of Fisheries and Oceans
ii) The ongoing impact of the requirement that the Investment be referred to the Joint Review Panel;
iii) The application of the relevant domestic rules by failing to apply the binding transitional provisions of the Canadian Environmental Assessment Act to the Investment's permit application.294
It is precisely at this point where the concept of continuing breach dovetails with that of non-continuing breach. Bilcon could not know of the loss it incurred from Canada's continuing measures until those measures were actually applied to it in concrete situations. That is, the time-bar on continuing measures could not possibly start to run until those measures were applied to Bilcon in particular circumstances.305
The Investors differentiate the Grand River case on which the Respondent relies, on its facts.306
While the JRP operated within the general mandate of its Terms of Reference (which could be considered general instructions), the JRP was an autonomous body. It organized its own internal procedures, determined how it would conduct the hearing, and decided itself on what it believed to be the appropriate approach to topics such as a cumulative effects analysis, the precautionary principle, adaptive management, mitigation measures, and information requests of the Claimants.357
The Parties shall ensure that all necessary measures are taken in order to give effect to the provisions of this Agreement, including their observance, except as otherwise provided in this Agreement, by state and provincial governments.
In addition, the Tribunal has regard to relevant provisions of the ILC Articles, which provide as follows:
Article 4: Conduct of organs of a State
The conduct of any State organ shall be considered an act of that State under international law, whether that organ exercises legislative, executive, judicial or any other functions, whatever position it holds in the organization of the State, and whatever its character as an organ of the central Government or of a territorial unit of the State.
An organ includes any person or entity which has that status in accordance with the internal law of the State.
Article 5: Conduct of persons or entities exercising elements of governmental authority
The conduct of a person or entity which is not an organ of the State under Article 4 but which is empowered by the law of that State to exercise elements of the governmental authority shall be considered an act of the State under international law, provided the person or entity is acting in that capacity in the particular instance.
34. A review panel shall, in accordance with any regulations made for that purpose and with its terms of reference,
(a) ensure that the information required for an assessment by a review panel is obtained and made available to the public;
(b) hold hearings in a manner that offers the public opportunity to participate in the assessment;
(c) prepare a report setting out
(i) the rationale, conclusions and recommendations of the panel relating to the environmental assessment of the project, including any mitigation measures and followup program; and
(ii) a summary of any comments received from the public; and
(d) submit the report to the Minister and the responsible authority.
the project is not likely to cause significant adverse environmental effects;
the project is likely to cause significant adverse effects, but these are justified in the circumstances.393
Conduct acknowledged and adopted by a State as its own
Conduct which is not attributable to a State under the preceding articles shall nevertheless be considered an act of that State under international law if and to the extent that the State acknowledges and adopts the conduct in question as its own.409