Cattle were banned from crossing the border for two years, costing approximately $7 billion.
John McDonald/the Gauntlet

Mad cattlemen seek compensation for BSE

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A University of Calgary professor is fighting on behalf of a group of Canadian cattlemen who were adversely affected by the closure of the American border to Canadian beef following a case of BSE on an Alberta ranch May 2003. U of C faculty of law professor Todd Grierson-Weiler, is a leading expert on the North American Free Trade Agreement and international arbitration, is among a team of lawyers who are attempting to use the NAFTA as a mechanism to compensate a group of 120 cattlemen to the tune of no less than $300 million.

Within hours of the official announcement that the Alberta cow had tested positive for Bovine Spongiform Encephalopathy, or Mad Cow disease, the American border was sealed to all Canadian beef exports. While studies--including a Harvard University BSE Risk Assessment--suggested that the risk to humans was minimal and recommended that the border be reopened, it would be two years before live cattle started moving south again. The provincial government estimated that BSE had cost the cattle industry $7 billion.

Ladell Smith, who ranches near Champion in Southern Alberta, is one of approximately 90,000 Canadian beef producers affected by the border closure.

"Almost immediately the price per pound dropped from 50 cents to around 20 cents," said Smith. "[As a result,] you tended to keep a cow that you maybe shouldn't have kept so you could get another calf out of it which might pay for the feed to get through the winter."

Smith, who said he has received some compensation from the government, is not a member of the Canadian Cattlemen for Fair Trade--the organization Grierson-Weiler is representing--and thus, not eligible for any compensation they receive.

"This is not a class action [law suit]," explained Grierson-Weiler. "Class action and NAFTA cases are different. With a class action, basically anyone that fits the certification class is in unless they officially opt out. But, there is no class action for international arbitration under a treaty, so instead everyone that wants to be involved has to make a claim and if you don't make a claim, you're not involved."

The CCFT originally formed from a group of Alberta feedlot owners but has grown into a Canada-wide organization. According to their website, the CCFT's two goals are to ensure that the Canada/United States border remains open and to obtain compensation for its members as a result of the arbitrary nature of the border closure. Grierson-Weiler suggested it was frustration with the status quo that led to the creation of this organization.

"[The CCFT] thought that they should be able to launch a case and take it up themselves," he said. "The Canadian government wouldn't do it for them; the Canadian Cattlemen Association wouldn't do it for them, so they created their own organization to [try and get the border open and receive compensation for its closure] themselves."

While the arbitration hearings may result in compensation, they do not have the authority to force the American government's hand with regard to changing policy or influencing the courts, as the protectionist organization Ranchers-Cattleman Action Legal Fund was able to do, explained Grierson-Weiler, who specialized in NAFTA Chapter 11.

"You can only look for compensation; that was the nod to sovereignty [during the original NAFTA discussions,]" he said. "The idea is that NAFTA parties, in exercising sovereignty, decided it would be a good thing to impose rules upon themselves but felt that it would be going too far to give individuals the [power] to essentially [strike down] a measure. Governments reserve for themselves [under Chapter 20] the ability to challenge [actual policy or laws]."

"Had the United States acted properly, R-CALF would never have been able to do what they were able to do--keep the border closed longer," Grierson-Weiler continued.

The R-CALF was able to successfully petition the American courts to keep the border closed when it was apparent that Canadian cattle posed minimal risk.

Grierson-Weiler was in Washington, D.C. for the first stage of the arbitration hearing Oct. 9 and 10. Lawyers representing both the CCFT and the U.S. government were there essentially to determine whether someone without a physical investment in the U.S. can proceed under Chapter 11 of NAFTA. The cattlemen argued that as investors they should be protected just as American investors would be, whereas the U.S. government believed the clause protected only those with actual infrastructure invested in America.

The hearing was broadcast live in Calgary--the first time that such a broadcast has been shown outside of a room adjacent to where the actual hearing was taking place. Grierson-Weiler used the opportunity to show his U of C students what an arbitration hearing looks like and to dispel some of the myths surrounding the procedure.

"The idea is to demonstrate that these tribunals--unlike what detractors say--are not secret or evil or anything like that," he said. "They are just mind-numbingly boring to the public."

The NAFTA tribunal may reach a decision on whether or not the case can proceed by summer 2009, explained Grierson-Weiler.