At
the end of March, the European Commission launched a public
consultation over its plan to enshrine far-reaching rights for foreign
investors in the EU-US trade deal currently being negotiated. In the
face of fierce opposition to these investor super-rights, the Commission
is trying to convince the public that these do not endanger democracy
and public policy. See through the sweet-talk with Corporate Europe
Observatory’s guide to investor-state dispute settlement (ISDS).
Matt Wuerker, Politico
(For a detailed ‘reality check’ of the Commission's 'reform' agenda, see
annex 1 and annex 2.)
In
January, in response to growing public concern over the proposed EU-US
trade deal (Transatlantic Trade and Investment Partnership, TTIP), the
European Commission announced
it was halting negotiations over the deal’s controversial investor
rights to conduct a public consultation on the issue. This was an
important success for the growing anti-TTIP movement, which is
unanimously opposed to the corporate powers in the deal.
The consultation
has now been published and the public will have until early July to
participate. People in Europe should not miss this opportunity to tell
the Commission (plus MEPs and member states) to axe the dangerous
corporate rights in the deal once and for all. There are compelling
reasons to do so.
Reason 1: ISDS is a tool for big business to make governments pay when they regulate
Around
the world, companies use existing trade and investment agreements to
claim compensation for perfectly legitimate government policies to
protect health, the environment and other public interests – because
they claim these policies have the indirect effect of undermining
corporate profits.
For example, tobacco giant
Philip Morris is demanding US$2 billion from Uruguay over health warnings on cigarette packets; Swedish polluter Vattenfall is seeking over US$3.7 billion from Germany following a democratic decision to phase out nuclear energy; and Canadian company Lone Pine is suing Canada
via a US-subsidiary for CAN$250 million after the Canadian province of
Quebec imposed a moratorium on shale gas extraction (fracking) over
environmental concerns.
One crucial question for winning damages
is whether these policies can be construed as “equivalent to
expropriation”, even though the investor’s assets – a factory or land,
for example – were not physically taken. The definition of expropriation
– once exclusively used in relation to the confiscation of physical
property – has now been expanded in corporations’ interests to mean
action taken by governments that could potentially damage the earnings
of corporations. According to this eye-opening article
by journalist William Greider, enshrining this doctrine of ‘indirect
expropriation’ into trade pacts was part of “a long term strategy,
carefully thought out by business” to re-define “public regulation as a
government ‘taking’ of private property that requires compensation”. The
implications, according to Greider, are far-reaching – and that was
exactly the intention:
"Because any new regulation is
bound to have some economic impact on private assets, this doctrine is a
formula to shrink the reach of modern government and cripple the
regulatory state – undermining long-established protections for social
welfare and economic justice, environmental values and individual
rights. Right-wing advocates frankly state that objective – restoring
the primacy of property against society’s broader claims."Journalist & writer William Greider
