NAFTA, the Mining Law of 1872, and Environmental Protection

After spending $15 million to mine gold on Bureau of Land Management (BLM) lands in California and then failing to secure federal approval, a Canadian mining company claimed $50 million in damages for a regulatory taking under the North American Free Trade Agreement (NAFTA). The mining company, Glamis Gold, Ltd., argued that under the U.S. Mining Law of 1872, BLM's delay in approving its mining plan violated NAFTA by unfairly targeting the company. Glamis also argued that California's retroactive environmental regulations destroyed the economic viability of its project, rendering the mining property worthless and subject to compensation under NAFTA. This article explores this dispute, the first environmental takings challenge of its kind under NAFTA. While the NAFTA tribunal concluded no regulatory taking had occurred, considerable uncertainty remains as to what environmental regulations constitute a taking under this international agreement, even though, in this case, NAFTA did not become a "sword" to cut through U.S. environmental protections.