It appears that like New Zealand the United Kingdom is also negotiating with the United States for improved trade access under the benign sounding Transatlantic Trade and Investment Partnership negotiations. But they are facing the same issues that New Zealand is facing, including the suggested provision of investor-state dispute resolution procedures, where private corporations or individuals could seek compensation from a private arbitration panel if a State acting in the best interests of its citizens adversely affects their expectation of profit.
George Monbiot has written about the subject recently in that clear precise way that characterises his writing. From the Guardian:
If a government proposes to abandon one of the fundamental principles of justice, there had better be a powerful reason. Equality before the law is not ditched lightly. Surely? Well, read this and judge for yourself. The UK government, like that of the US and 13 other EU members, wants to set up a separate judicial system, exclusively for the use of corporations. While the rest of us must take our chances in the courts, corporations across the EU and US will be allowed to sue governments before a tribunal of corporate lawyers. They will be able to challenge the laws they don’t like, and seek massive compensation if these are deemed to affect their “future anticipated profits”.
I’m talking about the proposed Transatlantic Trade and Investment Partnership (TTIP) and its provisions for “investor-state dispute settlement”. If this sounds incomprehensible, that’s mission accomplished: public understanding is lethal to this attempted corporate coup.
The TTIP is widely described as a trade agreement. But while in the past trade agreements sought to address protectionism, now they seek to address protection. In other words, once they promoted free trade by removing trade taxes (tariffs); now they promote the interests of transnational capital by downgrading the defence of human health, the natural world, labour rights, and the poor and vulnerable from predatory corporate practices.
This debate has also been occurring in New Zealand. Why should we create the possibility that an arbitration panel beyond our control could order the payment of damages because corporate interests were affected by action taken in the public good?
Monbiot is deeply concerned at the potential effect the TTIP may have on UK’s democratic structures.
The proposed treaty has been described by the eminent professor of governance Colin Crouch as “post-democracy in its purest form”. Post-democracy refers to our neutron-bomb politics, in which the old structures, such as elections and parliaments, remain standing, but are uninhabited by political power. Power has shifted to other forums, unamenable to public challenge: “small, private circles where political elites do deals with corporate lobbies”.
Investor-state dispute settlement – ISDS – means allowing corporations to sue governments over laws that might affect their profits. The tobacco company Philip Morris is currently suing Australia and Uruguay, under similar treaties, for their attempts to discourage smoking. It describes the UK’s proposed rules on plain packaging as “unlawful”: if TTIP goes ahead, expect a challenge.
Corporations can use the courts to defend their interests. But under current treaties, ISDS lets them apply instead to offshore tribunals operating in secret, without such basic safeguards as judicial review and rights of appeal. As Crouch notes, this is not just post-democracy, but “post-law”.
He rightfully questions the need for a separate judicial system and wonders why the United Kingdom Courts are not able to handle any disputes.
There is only one possible justification for a separate judicial system: a failure by existing courts to fairly arbitrate businesses’ legal claims. So which judicial systems in the US or EU treat corporations unfairly?
I have asked this question (via Twitter) to the business secretary, Vince Cable; his deputy, Lord Livingston; and the Conservative leader in the European parliament, Syed Kamall. Resounding silence. I have asked it in this column, three times. Nothing. I have asked the business department by phone. After an attempt by its spokesman to suggest that there could be something wrong with the US system, and a subsequent failure to explain what this might be; he sent me this statement: “Investor protection is needed as domestic courts are not the typical route for investors to seek redress.” Not the typical route? That’s it?
It appears that John Key is relaxed at the potential of private arbitration making binding decisions affecting the New Zealand state. He was questioned about this in Parliament by Metiria Turei two years ago and asked if New Zealand was opening itself up to litigation from firms based in the Trans-Pacific Partnership countries if it signed up to the investor-State dispute settlement procedures. He responded:
… I do not think that is of concern because investor-State dispute settlement procedures allow a safeguard for New Zealand. New Zealand has already signed two free-trade agreements that include investor-State dispute settlement procedures. They were done under a Labour Government. They were the China free-trade agreement and the ASEAN-Australia-New Zealand Free Trade Agreement. They include the very safeguards that would protect New Zealand under those provisions. They also, I might add, protect New Zealand companies when they invest overseas. That is the very purpose of the investor-State dispute settlement procedure requirements.
Key’s response is similar to that adopted by UK Prime Minister David Cameron. Again according to Monbiot:
At the G20 summit last year [Cameron] said: “We’ve signed trade deal after trade deal and there has never been a problem in the past.” It’s the dangerous driver’s defence: I’ve done 100mph loads of times, and I’m still alive, aren’t I?
Yes, we’ve been lucky so far; luckier than other nations in Europe, which so far have been sued 127 times under investor-state clauses in other treaties. The Czech Republic, Slovakia and Poland have had to pay out enough money to have employed 380,000 nurses for a year. Investor-state cases are escalating rapidly: as corporations begin to understand the power they’ve been granted, they will turn their attention from the weak nations to the strong ones.
No one will provide a justification because no one can. To protect transnational capital from a non-existent risk, our governments are recklessly abandoning the principle of equality before the law.
Monbiot urges a call to action through petitions, protests and believes that at least in the UK they can win the argument. I will leave the final words to him.
In an age of ecocide, food banks and financial collapse, do we need more protection from predatory corporate practices, or less? This is a reckless, unjustified destruction of our rights. We can defeat it.