EconomicsSociety

A Global Ban on Left-Wing Politics

That’s what the new rules being smuggled into trade agreements are delivering.

by George Monbiot

Remember that referendum about whether we should create a single market with the United States? You know, the one that asked whether corporations should have the power to strike down our laws? No, I don’t either. Mind you, I spent ten minutes looking for my watch the other day, before I realised I was wearing it. Forgetting about the referendum is another sign of ageing. Because there must have been one, mustn’t there? After all that agonising over whether or not we should stay in the European Union(1), the government wouldn’t cede our sovereignty to some shadowy, undemocratic body without consulting us. Would it?

The purpose of the Transatlantic Trade and Investment Partnership is to remove the regulatory differences between the US and European nations. I mentioned it a couple of weeks ago(2). But I left out the most important issue: the remarkable ability it would grant big business to sue the living daylights out of governments which try to defend their citizens. It would allow a secretive panel of corporate lawyers to overrule the will of parliament and destroy our legal protections. Yet the defenders of our sovereignty say nothing.

The mechanism is called investor-state dispute settlement. It’s already being used in many parts of the world to kill regulations protecting people and the living planet.

The Australian government, after massive debates in and out of parliament, decided that cigarettes should be sold in plain packets, marked only with shocking health warnings. The decision was validated by the Australian supreme court. But, using a trade agreement Australia struck with Hong Kong, the tobacco company Philip Morris has asked an offshore tribunal to award it a vast sum in compensation for the loss of what it calls its intellectual property(3).

During its financial crisis, and in response to public anger over rocketing charges, Argentina imposed a freeze on people’s energy and water bills (does this sound familiar?). It was sued by the international utility companies whose vast bills had prompted the government to act. For this and other such crimes, it has been forced to pay out over a billion dollars in compensation(4).

In El Salvador, local communities managed at great cost (three campaigners were murdered) to persuade the government to refuse permission for a vast gold mine which threatened to contaminate their water supplies. A victory for democracy? Not for long perhaps. The Canadian company which sought to dig the mine is now suing El Salvador for $315m – for the loss of its anticipated future profits(5).

In Canada, the courts revoked two patents owned by the US drugs firm Eli Lilly, on the grounds that the company had not produced enough evidence that they had the beneficial effects it claimed. Eli Lilly is now suing the Canadian government for $500m, and demanding that Canada’s patent laws are changed(6).

These companies (and hundreds of others) are using the investor-state dispute rules embedded in trade treaties signed by the countries they are suing. The rules are enforced by panels which have none of the safeguards we expect in our own courts(7,8). The hearings are held in secret. The judges are corporate lawyers, many of whom work for corporations of the kind whose cases they hear. Citizens and communities affected by their decisions have no legal standing. There is no right of appeal on the merits of the case. Yet they can overthrow the sovereignty of parliaments and the rulings of supreme courts.

You don’t believe it? Here’s what one of the judges on these tribunals says about his work. “When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all … Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”(9)

There are no corresponding rights for citizens. We can’t use these tribunals to demand better protections from corporate greed. As the Democracy Centre says, this is “a privatised justice system for global corporations.”(10)

Even if these suits don’t succeed, they can exert a powerful chilling effect on legislation. One Canadian government official, speaking about the rules introduced by the North American Free Trade Agreement, remarked, “I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation and proposition in the last five years. They involved dry-cleaning chemicals, pharmaceuticals, pesticides, patent law. Virtually all of the new initiatives were targeted and most of them never saw the light of day.”(11) Democracy, as a meaningful proposition, is impossible under these circumstances.

This is the system to which we will be subject if the transatlantic treaty goes ahead. The US and the European Commission, both of which have been captured by the corporations they are supposed to regulate, are pressing for investor-state dispute resolution to be included in the agreement.

The Commission justifies this policy by claiming that domestic courts don’t offer corporations sufficient protection because they “might be biased or lack independence.”(12) Which courts is it talking about? Those of the US? Its own member states? It doesn’t say. In fact it fails to produce a single concrete example demonstrating the need for a new, extra-judicial system. It is precisely because our courts are generally not biased or lacking independence that the corporations want to bypass them. The EC seeks to replace open, accountable, sovereign courts with a closed, corrupt system riddled with conflicts of interest and arbitrary powers.

Investor-state rules could be used to smash any attempt to save the NHS from corporate control, to re-regulate the banks, to curb the greed of the energy companies, to renationalise the railways, to leave fossil fuels in the ground. These rules shut down democratic alternatives. They outlaw left-wing politics.

This is why there has been no attempt by our government to inform us about this monstrous assault on democracy, let alone consult us. This is why the Conservatives who huff and puff about sovereignty are silent. Wake up people, we’re being shafted.

Further Reading:

References:

  1. https://www.gov.uk/government/speeches/eu-speech-at-bloomberg
  2. https://www.theguardian.com/commentisfree/2013/oct/14/obamacare-trade-superversion-subversion-threat-state
  3. https://www.mccabecentre.org/focus-areas/tobacco/philip-morris-asia-challenge
  4. https://corporateeurope.org/trade/2013/06/transatlantic-corporate-bill-rights
  5. https://democracyctr.org/wp/wp-content/uploads/2013/05/Under_The_Radar_English_Final.pdf
  6. https://www.techdirt.com/articles/20130723/05101823898/eli-lilly-decides-it-was-not-greedy-enough-now-suing-canada-500-million.shtml
  7. https://democracyctr.org/wp/wp-content/uploads/2013/05/Under_The_Radar_English_Final.pdf
  8. https://www.citizen.org/eli-lilly-investor-state-factsheet
  9. https://corporateeurope.org/trade/2012/11/chapter-4-who-guards-guardians-conflicting-interests-investment-arbitrators
  10. https://democracyctr.org/wp/wp-content/uploads/2013/05/Under_The_Radar_English_Final.pdf
  11. https://www.thenation.com/article/right-and-us-trade-law-invalidating-20th-century?page=0,5
  12. https://trade.ec.europa.eu/doclib/docs/2013/october/tradoc_151790.pdf

9 Comments

  1. It’s insane that these corporations are looking for “guaranteed profits” and getting them. This is an extension of “socializing losses and privatizing profits”. I don’t understand how corporations are expecting guarantees just because they are taking so-called “risks”. LIFE is full of risks and how many of us are guaranteed the results we want? Since corporations have achieved “personhood” their demands have become increasingly unreasonable. It’s like they want life to be “fair”. Well, boys, it’s not. The rest of us “real” people have to get used to it and so should they.

  2. Couldn’t agree more Diane. In my opinion, nothing will change until we change the standard corporate charter, as I outlined in full in the The Roots of Change – in Ourselves, or Government and Industry? article I wrote and linked to in the ‘Further Reading’ section above.

    “No environmental movement will meet with success if it only operates on the typical patchwork process – that of trying to scold and chide industry and consumers into lessening their impact on the world. Indeed, regulatory controls alone will never be sufficient either, and work on the same after-the-fact premise. What is required is major surgery to the central chartered legal responsibilities for businesses (currently just to protect their own interests), and personal accountability for their directors. Without embedding broader social and environmental responsibilities, inter-business competition and shareholder demands will always ensure investment in the future gives way to a mere striving for market dominance, at any cost.”

  3. Yep. The “corporation” as we know it has no place in a just, sustainable society. If corporations were people (as they are essentially treated under law) they would, by definition of their charter, be sociopaths – devoid of all empathy and seeking only personal gain. Who needs em anyway – we have decent legal structures for “social business” (the necessity for a distinction with this term is a reminder that corporations are “anti-social businesses”!) in the form of co-operatives and incorporated associations.

  4. One of the major issues that will come out of this deal and the TPP deal is that we won’t be able to communicate freely and discuss the behaviour of these corporations. They will see any negative publicity as a threat to their profits and then take even us individuals to court. Can you imagine a world where the ordinary people are too scared to talk just in case some draconian enforcer overhears what you say and runs you in for questioning? It won’t be long before that happens believe me. Its fast becoming a world where we the people are merely commodities to be bought and sold by the highest bidders and we will have no rights whatsoever.
    And I bet you thought slavery had been abolished?

  5. How often do Australian politicians tell us that business (most particularly big businesses with massive buffers of resources) “must have CERTAINTY”. But in the same breath they tell ordinary citizens to jump through whatever hoops global markets demand or face the sack–apparently, humble citizens, despite their comparatively meagre resources, must have unCERTAINTY.

    Like the Europeans, Australia is also in the process of signing off on a couple of TTIP-like deals that would prevent our government from acting in the interests of its citizens; in favour of protecting big business profits. Such agreements are a logical extension of the decisions that were made in the mid-1980s when the Hawke-Keating governments decided, without openly consulting Australian voters, that they would:
    1. Float the dollar;
    2. Scrap controls on home and business loan interest rates;
    3. Scrap controls on capital flight (to overseas);
    4. Almost never intervene in foreign investment proposals;
    5. Scrap industry protection (tariffs, quotas, subsides);
    6. Scrap/loosen anti-dumping provisions;
    7. Scrap/loosen quarantine laws.

    When we adopted the tariff “reforms” we decided–without ever confronting the morality of the decision–to get our cars, steel, textiles, shoes and orange juice from countries/businesses that:
    1. Used child labour, slave labour, or employed wage earners on pitiful near-starvation wages (people who were/are denied the freedom to form unions);
    2. Had next to no food safety standards;
    3. Had next to no OH&S standards;
    4. Had next to no environmental standards to protect either humans or the broader environment.
    The only yardstick under the tariff “reforms” was the cheapness of the product. The morality of this policy is very similar to the procurement of sugar from the West Indies sugar plantations prior to the abolition of slavery and indeed “free trade”, on these terms, is a form of slavery.

    Even if you don’t care about the exploitation of foreign workers it is glaringly unfair to force local producers and workers to compete against foreign producers that don’t have to bear reasonable costs for labour and for compliance with the above standards.

    Among the leaders of the cheer squad for the free trade “reforms” were the miners. But when the Australian Government recently sought to impose costs on THEM (e.g., the mining Super Profits Tax and the Carbon Tax) they suddenly discovered that the sky would fall in if THEY were forced to bear costs not borne by THEIR competitors. Funny that I never heard the miners–in the light of this newfound principle of fairness–apologise to workers from the clothing sector, or to citrus producers, for lobbying so successfully for decades for the free trade “reforms” that put so many of them out of work and/or out of business.

    1. WE nothing decide (the group think is what turns folk into Borg) – by each transaction, each consumer decides to enter a no-coercive transaction to get cars, steel from whoever they wish, union or non union.
      As a permaculturaist I want high moral standards in all my transactions, so high I am not prepared to force others how to choose. If we wish to be free, we must allow others to be free to choose things we may disagree with.

  6. There does not seem to be a global ban on left wing politics – rather a continues glorification of the State as a solution to problems is common. Anarcho Syndicalists have always been on the margins as have Anarcho Capitalist.
    Sadly the Corrupt Official is not a lackey of the multinational, but the setter of perverse incentives. Strike at the root – the existence of the governmental official who will always incite corruption no matter what structure exits outside him.
    The twisted “rights” granted to corporations are indeed wrong, but a function of the way they are tax (all tax is theft and taxing one part of the economy as a person or another just alters the playing field artificially). Surely the Nation State is an artefact just as the Corporation, so claiming supremacy for the Nation State is odd.
    The existence of the NHS – the socialised health care indicates that left wing politics has not been banned, and that such routinely tramples over market politics (which is very different from UK current Fascist system)

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