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Courtroom Showdown Challenges TransCanada's Right to Eminent Domain over Keystone Tar Sands Pipeline

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Former conservative gubernatorial candidate Debra Medina addresses the crowd of landowners and Julia Trigg Crawford court supporters on the Lamar County courthouse steps regarding property rights and eminent domain.

On Aug. 10, statewide groups of all political persuasions went to the Lamar County courthouse to support Texas landowner Julia Trigg Crawford against TransCanada, which has announced plans to start building the southern segment of the Keystone pipeline to carry tar sands crude from Cushing, Oklahoma to Texas Gulf Coast refineries.

The courtroom showdown marked the first landmark battle following a recent Supreme Court case ruling in favor of landowners. Crawford’s hearing is the first case since the Supreme Court ruling to protect private property from an illegal taking. Julia Trigg Crawford, along with her attorney Wendi Hammond, faced Judge Bill Harris and a team of TransCanada lawyers in a packed courtroom of observers with an overflow crowd for more than six hours. Crawford’s attorney contended that TransCanada is a foreign-owned pipeline carrying tar sands for private profit, challenging its qualifications as a common carrier with eminent domain rights.

Texas courts have long held that property owners could not challenge property takings by pipelines, but a recent, unanimous Texas Supreme Court decision, which highlighted the fight between Texas Rice Land Partners versus Denbury Green Pipeline changed that equation. In the Denbury Green court case, the justices unanimously ruled that the pipeline company had to prove it was meeting the state’s statutes and serving a common good before it should be given the right to “take” private property.

“Today the eyes of Texas were shining upon the Judge in this case. All of us were here to see if he would stand up to protect landowners from illegal takings or side with a foreign pipeline company. The Crawford case begged the question of whether Judge Bill Harris would allow a hearing on the facts or whether he would deny a landowner justice in favor of this Canadian company,” said Debra Medina, former gubernatorial candidate and executive director of We Texans, a nonpartisan public policy advocacy group. “It appears we will not get our answer today. The court has been saddled with volumes of paper and will take it, along with the arguments, heard today into consideration before rendering its decision. A decision may be rendered as early as Wednesday.”

“However, it is disappointing that the court granted TransCanada the right to start trenching with a writ of possession,” Medina added.

“Why are Texans made to fend for themselves against the likes of corporations like TransCanada?” Medina asked. “The leaders of this state often talk about protecting property rights—but when the abuse starts, they stand up for the politically influential. This is in keeping with the crony capitalist lethargy that grips Austin. They pretend to see and hear no evil. The fervor by which people from all political stripes came here today to rally for the Crawford’s cause should make it clear: Texans are tired of abuse at the hands of big business and big donors.”

“The Texas Railroad Commission approved TransCanada’s permit to operate a pipeline as a common carrier, yet the agency has stated that it doesn’t review the applications for pipelines and doesn’t have the authority to determine common carrier status or give eminent domain permission to TransCanada,” commented Jessica Ellison, spokeswoman from Independent Texans. “TransCanada has yet to prove to the court that they meet the legal requirements of transporting the product for the public good or for public use.”

With the threat of imminent trenching for TransCanada’s southern pipeline segment to begin, landowners such as David Daniel of Winnsboro have now told TransCanada that it can no longer come on his property. Daniel has recently been served with notice by TransCanada that they are seeking a court order with the threat of damages should he continue to refuse entry onto his property. Daniel’s Winnsboro neighbor, Susan Scott, has also recently refused the entry of surveyors on her land.

"Here we've had a private company masquerading as a 'common carrier' pipeline in order to obtain the power of eminent domain in Texas. The Crawford family, along with those landowners supporting her today and more than 90 other landowners, have had their land condemned by TransCanada. These landowners deserve to be protected from eminent domain abuse before irreparable harm is done to their property," contended Terri Hall, founder and director of Texans Uniting for Reform and Freedom. "It's an outrage that in a state that claims to be pro-property rights, that there's absolutely no state authority checking to see whether or not these private companies meet the legal requirements of a public use pipeline. Landowners should not be put in the position of law enforcers at great personal expense."

Recently, the Texas House Land and Resource Management Committee met at the Capitol to hear invited testimony from Crawford and other interested parties regarding the dilemma of industries self-proclaiming they are common carriers with no review from any state agency as to whether a company is truly a common carrier or not.

“The answers we need may not lie ultimately in this Judge’s decision, the answer may lie an appeals court. The final outcome will also be laid at the foot of the Texas legislature to do something about this kind of abuse," noted Tom ‘Smitty’ Smith, executive director of Public Citizen. “We have already begun the process of pointing out the grave inequities of companies being able to walk into the Railroad Commission saying ‘trust us,' we’re a common carrier, and then be granted eminent domain authority without the needed checks and balances and review by an authorized government agency. That needs to change with the next legislative session.”

“Regardless that there were no decisions made today, it is clear that more steps need to be taken,” remarked Linda Curtis, director of Indy Texans. “Ms. Crawford’s case is emblematic of the continuing struggle of Texas landowners being tread upon by a private company, taking land for private use, and foreign profit. In the revolutionary words of those who’ve come before us, ‘we’ve not yet begun to fight’…and this court case makes it evident that more landowners like Ms. Crawford need to stand up and be heard.”

The trial before Judge Harris marked the continuation of proceedings which began in Paris on Feb. 13. TransCanada’s attorneys have complained that the delay of the start of its southern segment has cost the company $3 to $4 million per day.

The southern segment of TransCanada’s Keystone pipeline encompasses a 485-mile trek from Cushing to refineries on the Gulf coast. In Texas, more than 1,450 parcels of land have been acquired by TransCanada in its pursuit of construction on the pipeline which has been slated to commence any day pending any further legal delays. Ms. Crawford’s 600-acre farm near Sumner, north of Paris, signifies the last tract in contention between Cushing and the refineries on the Gulf Coast.

Visit EcoWatch's KEYSTONE XL page for more related news on this topic.

 

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Ola Elvestrun, Norway's environment minister, announced Thursday that it is freezing its contributions to the Amazon Fund, and will no longer be transferring €300 million ($33.2 million) to Brazil. In a press release, the Norwegian embassy in Brazil stated:

Given the present circumstances, Norway does not have either the legal or the technical basis for making its annual contribution to the Amazon Fund.

Brazilian President Jair Bolsonaro reacted with sarcasm to Norway's decision, which had been widely expected. After an official event, he commented: "Isn't Norway the country that kills whales at the North Pole? Doesn't it also produce oil? It has no basis for telling us what to do. It should give the money to Angela Merkel [the German Chancellor] to reforest Germany."

According to its website, the Amazon Fund is a "REDD+ mechanism created to raise donations for non-reimbursable investments in efforts to prevent, monitor and combat deforestation, as well as to promote the preservation and sustainable use in the Brazilian Amazon." The bulk of funding comes from Norway and Germany.

The annual transfer of funds from developed world donors to the Amazon Fund depends on a report from the Fund's technical committee. This committee meets after the National Institute of Space Research, which gathers official Amazon deforestation data, publishes its annual report with the definitive figures for deforestation in the previous year.

But this year the Amazon Fund's technical committee, along with its steering committee, COFA, were abolished by the Bolsonaro government on 11 April as part of a sweeping move to dissolve some 600 bodies, most of which had NGO involvement. The Bolsonaro government views NGO work in Brazil as a conspiracy to undermine Brazil's sovereignty.

The Brazilian government then demanded far-reaching changes in the way the fund is managed, as documented in a previous article. As a result, the Amazon Fund's technical committee has been unable to meet; Norway says it therefore cannot continue making donations without a favorable report from the committee.

Archer Daniels Midland soy silos in Mato Grosso along the BR-163 highway, where Amazon rainforest has largely been replaced by soy destined for the EU, UK, China and other international markets.

Thaís Borges.

An Uncertain Future

The Amazon Fund was announced during the 2007 United Nations Climate Change Conference in Bali, during a period when environmentalists were alarmed at the rocketing rate of deforestation in the Brazilian Amazon. It was created as a way of encouraging Brazil to continue bringing down the rate of forest conversion to pastures and croplands.

Government agencies, such as IBAMA, Brazil's environmental agency, and NGOs shared Amazon Fund donations. IBAMA used the money primarily to enforce deforestation laws, while the NGOs oversaw projects to support sustainable communities and livelihoods in the Amazon.

There has been some controversy as to whether the Fund has actually achieved its goals: in the three years before the deal, the rate of deforestation fell dramatically but, after money from the Fund started pouring into the Amazon, the rate remained fairly stationary until 2014, when it began to rise once again. But, in general, the international donors have been pleased with the Fund's performance, and until the Bolsonaro government came to office, the program was expected to continue indefinitely.

Norway has been the main donor (94 percent) to the Amazon Fund, followed by Germany (5 percent), and Brazil's state-owned oil company, Petrobrás (1 percent). Over the past 11 years, the Norwegians have made, by far, the biggest contribution: R$3.2 billion ($855 million) out of the total of R$3.4 billion ($903 million).

Up till now the Fund has approved 103 projects, with the dispersal of R$1.8 billion ($478 million). These projects will not be affected by Norway's funding freeze because the donors have already provided the funding and the Brazilian Development Bank is contractually obliged to disburse the money until the end of the projects. But there are another 54 projects, currently being analyzed, whose future is far less secure.

One of the projects left stranded by the dissolution of the Fund's committees is Projeto Frutificar, which should be a three-year project, with a budget of R$29 million ($7.3 million), for the production of açai and cacao by 1,000 small-scale farmers in the states of Amapá and Pará. The project was drawn up by the Brazilian NGO IPAM (Institute of Environmental research in Amazonia).

Paulo Moutinho, an IPAM researcher, told Globo newspaper: "Our program was ready to go when the [Brazilian] government asked for changes in the Fund. It's now stuck in the BNDES. Without funding from Norway, we don't know what will happen to it."

Norway is not the only European nation to be reconsidering the way it funds environmental projects in Brazil. Germany has many environmental projects in the Latin American country, apart from its small contribution to the Amazon Fund, and is deeply concerned about the way the rate of deforestation has been soaring this year.

The German environment ministry told Mongabay that its minister, Svenja Schulze, had decided to put financial support for forest and biodiversity projects in Brazil on hold, with €35 million ($39 million) for various projects now frozen.

The ministry explained why: "The Brazilian government's policy in the Amazon raises doubts whether a consistent reduction in deforestation rates is still being pursued. Only when clarity is restored, can project collaboration be continued."

Bauxite mines in Paragominas, Brazil. The Bolsonaro administration is urging new laws that would allow large-scale mining within Brazil's indigenous reserves.

Hydro / Halvor Molland / Flickr

Alternative Amazon Funding

Although there will certainly be disruption in the short-term as a result of the paralysis in the Amazon Fund, the governors of Brazil's Amazon states, which rely on international funding for their environmental projects, are already scrambling to create alternative channels.

In a press release issued yesterday Helder Barbalho, the governor of Pará, the state with the highest number of projects financed by the Fund, said that he will do all he can to maintain and increase his state partnership with Norway.

Barbalho had announced earlier that his state would be receiving €12.5 million ($11.1 million) to run deforestation monitoring centers in five regions of Pará. Barbalho said: "The state governments' monitoring systems are recording a high level of deforestation in Pará, as in the other Amazon states. The money will be made available to those who want to help [the Pará government reduce deforestation] without this being seen as international intervention."

Amazonas state has funding partnerships with Germany and is negotiating deals with France. "I am talking with countries, mainly European, that are interested in investing in projects in the Amazon," said Amazonas governor Wilson Miranda Lima. "It is important to look at Amazônia, not only from the point of view of conservation, but also — and this is even more important — from the point of view of its citizens. It's impossible to preserve Amazônia if its inhabitants are poor."

Signing of the EU-Mercusor Latin American trading agreement earlier this year. The pact still needs to be ratified.

Council of Hemispheric Affairs

Looming International Difficulties

The Bolsonaro government's perceived reluctance to take effective measures to curb deforestation may in the longer-term lead to a far more serious problem than the paralysis of the Amazon Fund.

In June, the European Union and Mercosur, the South American trade bloc, reached an agreement to create the largest trading bloc in the world. If all goes ahead as planned, the pact would account for a quarter of the world's economy, involving 780 million people, and remove import tariffs on 90 percent of the goods traded between the two blocs. The Brazilian government has predicted that the deal will lead to an increase of almost $100 billion in Brazilian exports, particularly agricultural products, by 2035.

But the huge surge this year in Amazon deforestation is leading some European countries to think twice about ratifying the deal. In an interview with Mongabay, the German environment ministry made it very clear that Germany is very worried about events in the Amazon: "We are deeply concerned given the pace of destruction in Brazil … The Amazon Forest is vital for the atmospheric circulation and considered as one of the tipping points of the climate system."

The ministry stated that, for the trade deal to go ahead, Brazil must carry out its commitment under the Paris Climate agreement to reduce its greenhouse gas emissions by 43 percent below the 2005 level by 2030. The German environment ministry said: If the trade deal is to go ahead, "It is necessary that Brazil is effectively implementing its climate change objectives adopted under the [Paris] Agreement. It is precisely this commitment that is expressly confirmed in the text of the EU-Mercosur Free Trade Agreement."

Blairo Maggi, Brazil agriculture minister under the Temer administration, and a major shareholder in Amaggi, the largest Brazilian-owned commodities trading company, has said very little in public since Bolsonaro came to power; he's been "in a voluntary retreat," as he puts it. But Maggi is so concerned about the damage Bolsonaro's off the cuff remarks and policies are doing to international relationships he decided to speak out earlier this week.

Former Brazil Agriculture Minister Blairo Maggi, who has broken a self-imposed silence to criticize the Bolsonaro government, saying that its rhetoric and policies could threaten Brazil's international commodities trade.

Senado Federal / Visualhunt / CC BY

Maggi, a ruralista who strongly supports agribusiness, told the newspaper, Valor Econômico, that, even if the European Union doesn't get to the point of tearing up a deal that has taken 20 years to negotiate, there could be long delays. "These environmental confusions could create a situation in which the EU says that Brazil isn't sticking to the rules." Maggi speculated. "France doesn't want the deal and perhaps it is taking advantage of the situation to tear it up. Or the deal could take much longer to ratify — three, five years."

Such a delay could have severe repercussions for Brazil's struggling economy which relies heavily on its commodities trade with the EU. Analysists say that Bolsonaro's fears over such an outcome could be one reason for his recently announced October meeting with Chinese President Xi Jinping, another key trading partner.

Maggi is worried about another, even more alarming, potential consequence of Bolsonaro's failure to stem illegal deforestation — Brazil could be hit by a boycott by its foreign customers. "I don't buy this idea that the world needs Brazil … We are only a player and, worse still, replaceable." Maggi warns, "As an exporter, I'm telling you: things are getting very difficult. Brazil has been saying for years that it is possible to produce and preserve, but with this [Bolsonaro administration] rhetoric, we are going back to square one … We could find markets closed to us."

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