launched a preemptive strike against the bill by initiating "consultations" as a forerunner to a formal dispute settlement process under NAFTA Ch. 11, which deals with the protection of foreign investments. Ethyl claimed over US $200 million in damages from what it called the expropriation of its market share and production facility in Canada, and for loss of goodwill merely as a result of the introduction of the bill. By year's end, the bill had been passed by the House of Commons, and was undergoing hearings in the Senate, the second arm of the Canadian Parliament.
At the end of the year Canada adopted a regulation that alters significantly the application of the Canadian Environmental Assessment Act to projects subject to a Canadian government decision or funding that are to be located in a foreign country. ( Projects Outside Canada Environmental Assessment Regulations, SOR/96-736.) Adopted at the same time (according to government sources) as the proposed sale of a Canadian Candu nuclear reactor to China was being completed, the regulation allowed the sale to proceed without the comprehensive environmental assessment that Canadian law would otherwise have required. More broadly, the new regulation will require only preliminary screenings while eliminating the comprehensive assessment requirement for all newly proposed foreign projects, including projects that are on a mandatory comprehensive assessment list if undertaken in Canada. This regulation puts Canada out of step with both other developed countries providing development assistance and all international development banks. It suggests that short-term trade gains have priority over environmental and sustainable development goals in Canadian development assistance policy.
In 1996, Central American governments reinforced their efforts to promote environmental protection programs through the regional Sustainable Development Alliance ( Alianza para el Desarrollo Sostenible, ALIDES). At the two presidential summits in December 1995 and May 1996, member governments reaffirmed their commitment to search for funds to finance ALIDES's agenda of environmentally friendly development programs in Central America. That, in turn, led the Canadian government in May to join Mexico and the United States as extraregional sponsors of ALIDES, a move that the presidents of the isthmus had urged upon Canada during their summit with Canadian Prime Minister Jean Chretien in Ottawa, 16-17 May.
By year's end, every Central American country had created, at least formally, its own Sustainable Development Commission with participation from both civil society and governmental institutions. These commissions were