MAY 1996 · VOLUME 17 · NUMBER 5
T H E F R O N T
MAY 1996 · VOLUME 17 · NUMBER 5
T H E F R O N T
TORONTO, CANADA -- Japanese-owned Daishowa's plans to log a massive tract of land in Alberta has come to threaten the well-being of the Lubicon native tribe and Canadian democracy alike.
Daishowa plans to log a 10,000-square-kilometer area on land that the Lubicon claim as their own in an unresolved dispute with the Alberta government that dates back to 1939. Despite this claim, the province granted Daishowa the logging rights to the disputed territory in 1989. The trees will feed the company's new $500 million pulp mill near Peace River. Daishowa's plans to cut 11,000 trees each day from the land will eliminate the Lubicon's traditional lifestyle, amounting to "cultural genocide," according to the band.
The logging plans follow 15 years of intensive resource extraction from the disputed Lubicon territory. In 1979, the Alberta government permitted the drilling of more than 400 oil wells within the community of Little Buffalo Lake. In the years that followed, the number of moose taken for food dropped from 219 to 19; income from trapping dropped from $5,000 per trapper per year to less than $400; and dependence on welfare, which was less than 10 percent before the drilling, soared to 95 percent. The World Council of Churches, in a 1983 inquiry, concluded that "the Alberta provincial government and dozens of multinational oil companies have taken actions which could have genocidal consequences" for the Lubicon. In 1990, the United Nations Human Rights Committee found Canada in violation of the International Covenant on Civil and Political Rights in the Lubicon case.
"During the past 15 years, lands which we have protected and preserved for countless generations have been irreparably damaged by resource exploitation activity conducted in our unceded traditional territory by outsiders without our consent and over our protest," says Lubicon Chief Bernard Ominayak.
The logging plans represent the newest threat to this struggling community.
"It is a threat which hangs over the head of every Lubicon person every minute of every day," says Ominayak. "If they cut down our trees ... we know we will be finished as a people."
In 1990, Daishowa's logging camp was torched, causing $25,000 in damages and ending the logging for that season. While logging has not returned to the area, Daishowa has refused to make a commitment not to log on unceded Lubicon land, stating that the Lubicon claim is to be resolved by the government, not the company.
The Daishowa mill manufactures paper bags and packaging materials for various retail operations. Seeing an opportunity to focus consumer buying power on pressuring Daishowa to halt its logging plans until the land claims are resolved, a Toronto-based support group, the Friends of the Lubicon, launched a boycott of Daishowa paper products among the company's local clients. The boycott was remarkably successful. Grocery giant Canada Safeway, clothing retailer Holt Renfrew, Kentucky Fried Chicken, The Body Shop and more than 30 other major chains representing 4,300 retail outlets made the switch from Daishowa to other suppliers. In some cases, when Daishowa customers did not respond to requests from the Friends to switch from Daishowa, the Friends picketed or threatened to picket the retail operations of those customers.
In January 1995, the company responded to the boycott by launching a lawsuit against the Friends of the Lubicon, alleging defamation, intimidation, misrepresentation, inducing breach of contract, and "secondary picketing" (a statute under Canadian labor law that prevents striking workers from protesting at a company's suppliers). Daishowa is seeking $8 million in damages -- representing the company's lost sales -- and an injunction permanently banning the boycott. Daishowa is also seeking a temporary injunction on the boycott until the case is resolved.
The Sierra Legal Defence Fund (SLDF) agreed to take on the case for the Friends. SLDF says that the case is a classic strategic lawsuit against public participation -- or SLAPP. Corporations launch SLAPPs not on legitimate legal grounds, but to silence activists campaigning against corporate activities. The suits aim to deplete the resources of the corporation's opponents and to threaten them from speaking out against the company.
Daishowa denies the case is a SLAPP. "It is an ordinary lawsuit whose primary purpose is the protection of our customers against illegal acts," says Daishowa's Director of Corporate Development Tom Cochrane.
In May 1995, an Ontario Court judge ruled against Daishowa's request for a temporary injunction on the boycott, saying that boycotts are a form of "expression" provided for under the Canadian Charter of Rights and Freedoms, and that granting an injunction would violate the Friends' freedom of speech.
However, Daishowa appealed the ruling to Ontario's Divisional Court and succeeded in obtaining a temporary injunction on the boycott until the court rules on the case. SLDF's appeal asking that the temporary injunction be lifted was denied.
"The stakes in this case are extremely high," says SLDF lawyer Karen Wristen. "If you follow the court's logic, any successful consumer boycott can be found to be illegal."
The ruling is "dangerous across the board," according to Kevin Thomas, spokesperson for the Friends of the Lubicon. "It has given corporations the means to gag their opponents."
The ruling also has others concerned. "People who live on the other side of the tracks don't have the money to buy advertising in the mass media. Picketing is one of the few means they have at their disposal," says Alan Borovoy, general counsel for the Canadian Civil Liberties Association. "It's time the law made some progress in this area."
But the Friends of the Lubicon hopes that the ruling will galvanize support for its campaign. "In the medium term, it's shut us down, but more people are concerned," says Thomas. "Not only are the Lubicon's rights being taken away, but those of all Canadians."
The Lubicon are hoping that international support will boost their efforts, particularly in the United States, since there is little likelihood that such a lawsuit would succeed in U.S. courts and Daishowa has significant U.S. business dealings.
Daishowa's Cochrane says the suit will not limit the "normal rights" groups have to boycott.
But according to SLDF's Wristen, "The question now before the court is, which takes precedence -- private commercial interests or fundamental public freedoms?"
-- Aaron Freeman
THE NORTH CAROLINA Supreme Court in March overturned a groundbreaking lower state court decision that could have put an end to state and local corporate welfare for private businesses. The Supreme Court decision held that public money can legitimately be allocated to private businesses on the theory that the public will benefit.
In February 1995, attorney William Maready sued Forsyth County, the city of Winston-Salem, and the Forsyth County Development Corporation over the city and county's approval of 24 separate economic incentive projects involving the transfer of public funds to private corporations. The stated purposes of the grants, which totalled more than $13 million, included on-the-job training, road construction, utility connections, site improvements, land purchase financing, parking fees, spousal relocation, moving expenses and parking lot construction.
In October 1995, the Forsyth County Superior Court ruled in favor of Maready's claim that the North Carolina statute authorizing local governments to make development incentive grants violated a state constitutional provision requiring that public monies only be used for public purposes. The superior court ruled that expenditures to benefit private corporations did not serve a public purpose.
The superior court decision relied upon an earlier North Carolina Supreme Court decision which held unconstitutional a statute creating the North Carolina Industrial Development Financing Authority; the law had been created with the ostensible purpose of attracting new business and enhancing economic development. As Maready explains, "the state Supreme Court had ruled that `the people should so declare' through a constitutional amendment if `we are to bait corporations which refuse to become industrial citizens of North Carolina unless the state gives them a subsidy.'"
The superior court also agreed with Maready's contention that the development incentive law was unconstitutional because the statute was "impermissibly vague, ambiguous, and without reasonably objective standards." Maready cited as an example a $1 million city and county grant to Pepsi-Cola. "The grant had been made with the understanding that Pepsi-Cola would create 1,000 new permanent jobs, 400 of which would be in place by December 31, 1993. However, the one-page agreement did not reflect Pepsi-Cola's commitment to the jobs and, as of December 1, 1993, only 140 jobs were in place," Maready argued. "In 1994, [the city of] Winston-Salem advised that all indications are that Pepsi will never reach the 1,000 new jobs that they were told they would have within three to five years," Maready added.
In its decision, however, the North Carolina Supreme Court rejected Maready and the superior court's arguments. "Economic development has long been recognized as a proper governmental function," the Court held, even if private actors benefit from the expenditures authorized and even though every citizen in the community may not benefit. Consequently, the state's economic incentive program is not unconstitutional, the Court ruled.
The Court also emphasized the perceived importance of offering economic incentives to attract investment in the state. "The existing economic climate, whereby courts in some 46 states have upheld the constitutionality of expenditures, means that all men know that in our efforts to attract new industry we are competing with inducements to industry offered through legislative enactments in other jurisdictions," the majority decision, written by Justice Willis Whichard, stated.
Two justices, Robert Orr and I. Beverly Lake, Jr., issued a dissenting opinion. In it, they argued that "there is simply no evidence to support the conclusion that simply creating new jobs and increasing the tax base is a public purpose that justifies the payment of tax dollars to the private sector." The dissent rejected the majority's argument that interstate competition for investments justified the incentive program. "The philosophy that constitutional interpretation and application are subject to the whims of `everybody's doing it' cannot be sustained," the dissenting justices stated.
Kary Moss, who filed an amicus brief for a number of public interest organizations on behalf of Maready and who is executive director of the Detroit-based Maurice and Jane Sugar Law Center for Economic and Social Justice, agrees with the dissent. "I am especially troubled that this principle of fear is acting as the most pronounced force driving public policy on this issue," she says.
But Robert Leak, Jr., president of Winston-Salem Business, Inc., the name under which the Forsyth County Development Corporation does business, praises the Court's ruling. "We are delighted with the result. It puts us back into a competitive position to use incentives to recruit business."
"We feared that the state would not be competitive without the subsidies. The amount of activity, including inquiries, dropped 50 to 60 percent, which was directly associated with the lawsuit because of the uncertainty," he says.
"The majority of our competition uses incentives. If we didn't we would not be competitive," he adds.