still be helpful. Addressing Potential Challenges or Claims Arising under NAFTA Chapter 11For reasons we have already discussed, particular attention needs to be paid to addressing the risks of investor-state claims being made in consequence of prospective water export controls. There are several ways in which water export measures might be sheltered from claims arising under Chapter 11 of the NAFTA. We believe the most effective approach would be to negotiate a general carve out for such measures under these trade regimes, or as amendment to the provisions of a particular chapter, in this case Chapter 11: Investment. A less effective alternative would involve having the NAFTA Commission issue a statement in accordance with the provision of Article 1131.2 of the text that provides: An interpretation by the Commission of a provision of this Agreement shall be binding on a Tribunal established under this Section. Accordingly, the Commission would issue an interpretative note clarifying the meaning of "investment" under Article 1139 which defines this term for the purposes of the Chapter. This interpretation would be issued to make clear that "investment" was not intended to include any license, authorization or permit to water. The other option for removing the possibility of challenges to water export measures arising under certain provisions of Chapter 11 would be to amend Article 1108 Reservations and Exceptions to include specific exceptions for such measures. A better approach in our view would be to amend Annex 1138.2 to include an explicit exclusion from dispute settlement for federal and provincial legislation banning the extraction of water for the purposes of bulk export or diversion. In sum therefore, in our view the best option for protecting Canadian measures to prohibit bulk water exports from challenge under Chapter 11 would be to negotiate a general carve our for water under NAFTA. There are however, two other, albeit le...
