The unanimous decision by Canada, Mexico and the United States comes despite recommendations from staff at the Commission on Environmental Co-operation. They had concluded there were enough questions about how environmental rules are enforced on oilsands tailings ponds to justify an investigation.
The commission was created in 1995 to win environmental support for NAFTA by providing a safeguard that the deal wouldn't boost commerce at the expense of clean air, water or land. Commission staff investigate public complaints that Canada, the United States or Mexico aren't living up to their laws and recommend a "factual record" if they find enough grounds.
In 2010, a number of individuals and environmental groups filed a complaint with the commission that Canada wasn't upholding its Fisheries Act. They pointed to research that suggests an unknown amount of tailings from the oilsands are seeping into groundwater and damaging fish habitat.
Last August, the commission's legal staff decided there was enough supporting evidence to recommend an investigation.
But Canada did not respond to the allegations. The government pointed to commission rules that say it's not allowed to review any issue currently before the courts and a man from Fort McMurray, Alta., had filed a legal action that levelled similar criticisms about the tailings ponds.
That action had been heard in February and the man confirmed to The Canadian Press that he considered the matter closed. The appeal period ended last fall.
Still, Canada argued that commission staff have no independent power to determine whether the case was active or relevant. The government's word should have been enough to block the investigation, it said.
"(Staff) should have proceeded no further in its analysis and terminated the submission."
However, a statement from the United States suggests that country would be open to reconsidering the request now that the legal action is officially over.
"Nothing in the (North American Agreement on Environmental Co-operation) would have precluded the submitters from filing another submission on these issues," it said.
It's the second time in two months environmentalists have lost bids to begin investigations into Canada's activities.
In December, Canada used a similar argument to team up with Mexico and defeat a motion to look into salmon farms along the British Columbia coast.
Environmental groups and First Nations had accused Canada of violating its own laws by allowing the fish farms, which they said harm wild salmon stocks by spreading parasites.
The commission's internal staff had recommended an investigation be done. But Canada won the vote by arguing the issue was already the subject of a court proceeding in B.C.
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