Multinational Monitor

MAY 1998
VOL 19 No. 5


The Corporate Right to Cover Up: The Environmental Audit Privilege and the Public Interest
by Sanford Lewis

Veggie Libel: Agribusiness Seeks to Stifle Speech
by Ronald K.L. Collins

First Amendment Follies: Expanding Corporate Speech Rights
by Robert Weissman

Canadians Ungagged: A Victory for Free Speech in Daishowa v. Friends of the Lubicon
by Virginia Rose Smith


SLAPPing Back for Democracy
an interview with George Pring


Behind the Lines

Corporations and Free Speech

The Front
Rejecting the IMF - Milking the Media

The Lawrence Summers Memorial Award

Money & Politics
Corporate Tax Magic

Their Masters' Voice
The Small World of Lobbyist Ann Wexler

Names In the News

Book Notes


Canadians Ungagged: A Victory for Free Speech in Daishowa v. Friends of the Lubicon

by Virginia Rose Smith

Toronto -- A stunning corporate silencing of citizens' political speech was reversed in April, as Ontario Justice James MacPherson sharply rebuked the Japanese paper manufacturer Daishowa. Daishowa has sought for more than three years to squelch a consumer boycott, launched by the Friends of the Lubicon (FOL), a small Toronto-based citizens group, to discourage Daishowa from logging on the land of the Lubicon First Nation in Alberta (See "The Ten Worst Corporations of 1996," Multinational Monitor, December 1996).

In 1995, the Canada-based Daishowa Inc. sued FOL, charging that the group had unlawfully interfered with the company's business through intimidation, defamation, conspiracy and the threat of secondary picketing. The lawsuit has pitted Daishowa Inc. and its parent corporation, Japan's Daishowa Paper Manufacturing Company, against a volunteer organization with about a dozen members and an annual budget of a few thousand dollars. Daishowa Paper is a hefty multinational with annual net profits of more than $125 million.

FOL's boycott, launched in 1991, targeted paper bags produced by Daishowa in Winnipeg and used by Toronto fast food outlets, clothing stores and other retailers to package their goods. FOL asked the retailers to stop using Daishowa-produced paper bags and was surprisingly successful in convincing store owners to do just that.

In January 1996, a court granted Daishowa a temporary injunction which enjoined FOL "from intentionally interfering with Daishowa's contractual and economic relations by unlawful means, including picketing and threats of picketing."

The temporary injunction banned FOL members from continuing to advocate the Daishowa boycott in any effective way, moving the terrain of the Daishowa-Friends of the Lubicon conflict into the courts, a forum where Daishowa could leverage its resource advantages. Daishowa's legal counsel was provided by the well-heeled downtown Toronto firm Lerner and Associates. Meanwhile, the defendants, who received pro bono assistance from the Sierra Legal Defense Fund, staged art auctions and other benefits to raise the cash for court costs, which to date have been over $35,000, according to defendant Stephen Kenda.

Nevertheless, FOL was able to score a victory for free speech with MacPherson's ruling, which refused to make Daishowa's injunction permanent and was hailed by the Canadian media and civil rights defenders.

"The ruling has profound implications for every activist, everyone who expresses opinions publicly," says FOL's lawyer Karen Wristen. She calls the judgment a "badly needed antidote to the growing sense of corporate control and domination of the political agenda that is perceived in the activist communities in which we work."

MacPherson's decision strongly supported the right of consumer groups to use secondary picketing as a way to communicate with a corporation's customers. (FOL picketed just two of Daishowa's customers during the course of the boycott.) Secondary picketing aimed at a company which does business with the picketers' primary target is illegal in Ontario labor disputes. MacPherson expressed doubts that the term "secondary picketing" should be used at all in a consumer boycott context, because it is not really comparable to the picketing conducted in a labor dispute.

Unlike a trade union, FOL had no economic self-interest at stake and no regulated relationship with its target. The group's only goal was to address an important social issue, said the judgment. FOL's courteous, low-key approach in its boycott and picketing activities "is a model of how such activities should be conducted in a democratic society," MacPherson added.

The endorsement of secondary picketing is a relief to community activists who see it as an indispensible tool in low budget, community-based campaigns.

Last September, Canadian Civil Liberties Association General Counsel Alan Borovoy wrote to Ontario's Attorney General Charles Harnick, asking for a revision in the picketing law that would clearly establish the legality of picketing in consumer boycotts. To deny the right to picket, Borovoy said in a letter, "is to load the dice against the have-nots of society."

MacPherson broke some ground by citing the 1982 Charter of Rights and Freedoms as relevant to the case. The charter does not protect "petitioning activity" the way the First Amendment does in the United States. Instead, the charter's section 2(b) provides a general endorsement for "freedom of thought, belief, opinion and expression." MacPherson invoked the charter despite a 1986 Canadian Supreme Court decision, Retail, Wholesale and Department Store Union v. Dolphin Delivery, holding that the charter generally is not applicable to private disputes.

MacPherson explicitly prioritized citizen speech rights over any entitlement to engage in trade or conduct commerce. He pointed out that the charter does not name a commercial right. His judgment goes on to assert that "the common law should not erect barriers to expression by consumers where the purpose and effect of the expression is to persuade the listener to use his or her economic power to challenge a corporation's position on an important economic and public policy issue."

MacPherson ruled that the right to free expression was especially important in the FOL case because the Lubicon land claim is an important public issue. He cited the testimony at the trial of Lubicon Chief Bernard Ominayak. Ominayak contrasted the relative self-sufficiency the Lubicon enjoyed during his childhood with the decline in hunting and rampant social breakdown which have hit the community since the 1980 start of oil and other development on their land. "A lot of the land, a lot of the area that we've preserved and lived off for many, many generations is just being eroded every year," he said.

The Lubicon people, who never signed a treaty with the Canadian government, want Daishowa to desist from logging in their vicinity until they finish negotiating their land allocation. FOL made the same demand on the company. The boycott started when the company showed willingness to make only year-to-year commitments. No logging has occurred since the start of the boycott.

Following the ruling, FOL pledged to step up pressure on Daishowa if it failed to defer to Lubicon demands. Defendant Kevin Thomas said the group would give Daishowa "10 days to consider making the right decision." If an agreement not to log is still not forthcoming, "then we will contact more Daishowa customers" and "and frankly the boycott will be bigger than before and it will extend across several jurisdictions." He added that "Daishowa has tried to bully its way out of the problem. It should be clear by now that we won't be intimidated, bankrupted or silenced."

Daishowa announced its intention to appeal on the same day the decision was issued.

In court Daishowa had claimed that the boycott had inflicted severe damage on the company's packaging division. It cited over $14 million in lost sales because of the decision of about 50 Toronto retailers to stop purchasing Daishowa paper bags. Every Daishowa customer approached by FOL joined the boycott. Daishowa's lawyer Peter Jervis says that the packaging division was at risk of "being put out of business by the defendants." Still, the company as a whole remained sound. Daishowa witness Koichi Kitigawa acknowledged in court that Daishowa Inc.'s profits went up every year during the boycott.

The judge did find some points in Daishowa's favor. He said that FOL had indeed committed defamation when it asserted that Daishowa's behavior toward the Lubicon was an "act of genocide." Testimony in court that the word "genocide" could mean destruction of a people's culture (and not just physical extermination) was not convincing to MacPherson, who said that the use of the word in the boycott was "cavalier and grossly unfair."

Also judged false were FOL's statements that Daishowa was disregarding an agreement it had made in 1988 not to log until the Lubicon land title was settled. MacPherson called the evidence against the existence of such an agreement "overwhelming." Because of these two instances of defamation, he awarded Daishowa the $1 in damages it sought.

Thomas said after the ruling that the constraints on the use of particular words are "not very great," and that "we intend to abide by the court ruling on this."

In May, with the negative publicity of the trial still fresh and FOL preparing to resume and step up its boycott, Daishowa surprised the Lubicon and their allies by promising not to log in the contested territory until the Lubicon settle their land claim with Alberta and the federal government. As the Monitor was going to press, the Lubicon were reviewing the offer to determine if it is satisfactory.

Virginia Rose Smith is a Toronto based freelance writer on economic development.


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