Legal Opinion on the NAFTA Chapter 11 Implications of the Proposed Acquisition of MacMillan Bloedel by Weyerhaeuser

The BC Minister of Forests must consent to the change of control of MacMillan Bloedel Limited contemplated by the June 20, 1999 merger agreement between Weyerhaeuser Company, MacMillan Bloedel Limited, and a BC subsidiary of Weyerhaeuser. The following legal opinion addresses the implications of the North American Free Trade Agreement (the "NAFTA"), Article 1110: Expropriation and Compensation, for BC forest law and policy, should the merger occur. I have not analysed the implications of other NAFTA provisions.

ISSUES

1. If the merger goes through, would Weyerhaeuser Company be in a position to invoke the expropriation and compensation provisions of Chapter 11 of NAFTA?
2. What types of government action could be considered expropriation or tantamount to expropriation of an investment, and thus give rise to a NAFTA challenge?
3. How does the process for resolving a claim for compensation under NAFTA differ from BC procedures?
4. On the basis of NAFTA considerations, should the Sierra Club of BC oppose the change of control over MacMillan Bloedel Limited?