THE SUN BELT NAFTA CASE
Water is the perfect definition of a renewable resource. For those government policy makers and their private sector counterparts, only the surplus water was considered for the export market, and a policy was developed for this segment. This factor dictated that Canada would start its new export program in British Columbia the "Wet Coast" of Canada. The government measured that after all of the needs of GOBC were covered, there was a surplus of 400 MILLION ACRE FEET A YEAR flowing back into the Pacific Ocean. Contrast that with the rich market in the Great South West issuing international tenders in the search for water. This was a marriage made in the heavenly clouds that carry the distilled water from the Pacific Ocean to the shores of British Columbia.
The promotion of this new export policy commenced in the mid-1980s. The GOBC, with the support of the Canadian Federal government, publicized this new initiative, and invited investors to participate. By 1990, six licenses had been issued specifically for the bulk export of water by means of marine transport vessels, and 19 applications were pending.
The only serious competitors for the bulk export of British Colombian water were the six holders of export licenses issued by the GOBC. Because SNOWCAP was under contract to SUN BELT, the competition was between SUN BELT and the five other license holders. Four of these were small entities with little resources and no practical experience in foreign market development. The competition was really a face-off between SUN BELT and WCW.
SUN BELT INTERNATIONAL is a company dedicated to commercial and humanitarian projects dealing with water, commodity foods, energy, housing and education. In 1990 SUN BELT WATER was organized as an affiliated company to address the water needs of the American Southwest. Active negotiations were underway in some 30 markets, including: Oakland, San Francisco, San Rafael, Santa Cruz, Oceanside, Monterey, Carmel Valley, Lompoc, Santa Maria, Goleta, Santa Barbara, Ventura, Los Angeles, San Clemente, San Diego, Las Vegas, and Baja California, Mexico.
2. Negotiations with the City of Santa Barbara stalled when the City perceived some questionable representations by WCW. The Mayor declared in an open meeting of the City Council "I do not trust the GOBC government to be our source of water in an emergency situation." The City voted for a desalination plant.
3. Six months later, the Goleta Water District awarded the first ever contract to SUN BELT WATER for the delivery of bulk water from Canada by marine transport vessel. The next day the General Manager of the Goleta Water District received a call from a GOBC government official who irately asked: "What happened ? WCW was supposed to get that contract ! If you want any water you will buy it from WCW."
4. Four days later the SUN BELT contract was killed by the imposition of a "temporary moratorium" on the export of bulk water by marine transport system. No other bans on the export of Canadian water were imposed, and commercial trade in water continued by bottles, jugs, tanker trucks and pipelines.
n 1993 SUN BELT and SNOWCAP, as joint plaintiffs, filed civil action in the GOBC Superior Court against the GOBC government alleging breech of a unilateral contract, negligent misrepresentation, fraudulent misrepresentation, abuse of power and intentional interference with a contractual relationship. GOBC, acknowledging the prior existence of the SUN BELT/SNOWCAP contract, proposed an out-of-court settlement requesting that it cover the issues with SNOWCAP first, promising the same fair and equitable treatment to SUN BELT. SNOWCAP received a cash settlement. SUN BELT was forced into abusive and costly litigation.
Sun Belt's position is based on the same legal principles developed in the "Smoke Ball Case" which was portrayed in "The Paper Chase."
Representations by the GOBC that licenses to export water were available and if volume were not sufficient for specific market requirements, more licenses for other sites would be made available, thus confirming abundant available supply of water.
GOBC extends invitations to invest.
SUN BELT confirmed its understanding of the representations in writing and in face to face meetings with GOBC officials including meetings with the Premier, two Ministers, and some 10 executive agency officials.
SUN BELT made investments and continuously confirmed its action and progress.
SUN BELT continued to invest and to develop the market opportunity in reliance upon GOBC representations and communicated that reliance.
SUN BELT performed and communicated its performance.
SUN BELT received "first-ever in the world" contract to deliver Canadian bulk water to a California buyer by means of marine transport vessels.
GOBC unilaterally withdrew ("moratorium on export of bulk water by marine vessels") commitments and representations after performance by SUN BELT four days after the award of contract to SUN BELT.
SUN BELT declares detrimental reliance.
SUN BELT declares that a contract at law exists
SUN BELT files civil action in the BC Superior Court as joint plaintiff with SNOWCAP and with common legal counsel.
As a further comment, the action of the GOBC is equivalent to an act of expropriation. The issues of water in Canada are not issues of sovereign rights, since Canada serves as a signatory to international treaties and, in fact, is treating water as a commodity in daily commercial trade.
In discovery proceedings, SUN BELT discovered secret Contracts and Agreements, which had been executed by and between the GOBC government and WCW, on September 25, 1989. Lawyers for SUN BELT named this as evidence of a criminal conspiracy to deliver a monopoly position to a favored Canadian entity.
Shares and warrants were issued on September 29, 1989 just four days after the execution of the secret agreement. Over fifty percent of the distribution of these shares was deposited in private offshore bank accounts in well-known foreign tax havens.
Canada is guilty of the treaty violation on three counts. First, it compensated SNOWCAP and then refused to negotiate in good faith with SUN BELT. Second, it provided enormous economic benefits to WCW by means of a criminal conspiracy, and denied those competitive advantages to SUN BELT. Third, the unilateral contract was breached by Canada, but not with WCW. By grand fathering WCW while killing SUN BELT, Canada conveyed an absolute advantage to WCW.
The Canadian Federal Government has treated SUN BELT with the same disdain as did the GOBC Government. No cooperation, no disclosure, no transparency, no release of documents, delays, and limited release of minimal and misleading information to the waiting public.
SUN BELT, on the other hand, continues on its preparation for the arbitration. Recent events delayed any announcements, but the public can anticipate some disclosures and announcements beginning in January of the New Year.
STATUS OF WATER IN CANADA
The documents relating to the SUN BELT NAFTA Claim are located at:email@example.com
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