What does the recent NAFTA Chapter 11 Metalclad v. Mexico decision mean to municipalitys ability to implement zoning by-laws?
Neither the Tribunal Award nor the B.C. Supreme Court statutory review in Metalclad v. Mexico call into question the right of a local government to regulate on environmental and public health grounds. The decision of the Tribunal in Metalclad found that changes to the rules by the state government, after Metalclad had been led to believe that it had all necessary authorisations and had invested a substantial amount in its operation, were tantamount to expropriation. That is not the same as denying the right of governments to regulate. It should also be noted that each NAFTA Chapter 11 case is very fact specific and does not set a binding precedent for future cases. One should not draw general conclusions based on the outcome of a particular case. The B.C. Supreme Court’s decision on the Metalclad v. Mexico case can be found on: trans-2may.
