Governments Bowing to Corporate Greed on Both Sides of the Atlantic
Posted on October 4th, 2016
Premalal Ferdinando
In my opinion the Sri Lankan public should be informed about the the danger of signing Trade Pacts with western countries. In Europe where, I live, there is pressure against such pacts because of the Investor-State Dispute Settlement (ISDS) mechanism that is embedded in them. This is a new form of colonialism, a trap, which weak countries like Sri Lanka could fall into. The following Transcription of an interview will give you more information on the subject.
Governments Bowing to Corporate Greed on Both Sides of the Atlantic
The following is a rough transcription of an interview on Sputnik News program “Loud and Clear” of 23rd September 2016
Brian Becker (Interviewer): EU trade ministers met in Slovakia yesterday to discuss trade liberalization including the TTIP but if President Obama used his UN speech earlier this week as a rallying cry for free trade, does the agreement really have any chance of passing as world wide opposition is growing against the corporate take over of the world. Large protests have taken place last week end in Germany other protests are taking place in Brussels against TTIP.
Mark Turner (War on Want in the UK): Those protests are both about on the one hand about TTIP and also the EU Canada deal which is called CETA, the comprehensive economic and Trade Agreement. Both of those are very much tied to what is happening in Bratislava and what we have seen happening over the past few weeks around TTIP. We have had many outspoken comments about TTIP from Germany, France and from Austria and from other countries besides these and right now the TTIP talks are really in turmoil and this meeting in Bratislava is trying to deal with that on the one hand but at the same time its going to push through the ongoing talks in Canada on the CETA deal. From our perspective these things are very closely linked because while right at the moment the EU knows deep down that it cant get TTIP through anytime in the near future they are trying to push CETA through because a lot of the things that companies want in TTIP they can actually get through CETA. The core of these deals are very much about the same agenda and the way we see that is that there has been deregulation so this is giving corporations greater control over the setting of rules around the protection of society, the protection of public health and the environment and as a second pillar privatization, about guaranteeing access to services market and thirdly investor rights, so this is the very controversial Investor-State Dispute Settlement (ISDS) system which gives big business the power to sue Governments through its own private justice system. And the real crux of how these two deals link together is that under CETA’s ISDS mechanism, if you are a US corporation and has an office both in Europe and a subsidiary in Canada you can access that mechanism through CETA and the statistics for this is that some 80% of US corporations operating in Europe also have a subsidiary in Canada. That in bold figures is more than 40,000 US corporations. So once CETA goes through you get the same controversial powers that are in TTIP through the deal with Canada. 4:15
Brian: Investor State Dispute Settlement Mechanism – Corporate courts where corporations can actually sue governments if Government policies, either because they are for labour or for environment or to protect of indigenous industry or agriculture, do something, take on policies that do not allow corporations to maximize their profit. How do these corporate courts function ?
Mark: The whole crux of ISDS is dated back to the era when companies had a fear that dictators perhaps in developing countries would seize their assets. What it has become today is where policies made by Governments, if they affect the company’s profits – and the really critical thing here is that not the profits right now, it is profits to be made in the future, if Government policy impinges on that you can then sue the state. Now the way this works is that it is embedded in trade deals and the power is given to the company from the foreign country. So if you are looking at the US and the EU and TTIP what that would mean is that US companies would have the ability to sue European countries and in Europe, European countries would get the same power in America under the trade deal. However, you couldn’t have an American company suing America through that trade deal. With regard to future profits there is a very prominent case in the USA which brings this to light. So when Barak Obama vetoed the Keystone XL pipeline – a decision he took based on his commitment to climate change in the midst of vast opposition, civil disobedience – TransCanada, a Canadian company, immediately sued under these powers through the NAFTA (North American Free Trade Agreement) trade deal with Canada and Mexico. TransCanada had invested some $ 2b in this pipeline and it sued for $ 15b. Now as you can see there is a $ 13 b difference and that is because they say that these are the profits that we would make in the future. For us this is completely untenable which is essentially a form of tax payer funded risk insurance for corporations. And this same pattern is repeated in other cases where there has been public demonstrations and Governments responding to public pressure as in the case of Germany banning Nuclear Power they also were sued for EUR 4.7 b. So this is the distinct pattern repeating again and again.
Brian Becker: There is another case of a US company, Lone Time, is suing Canada for the ban on fracking in Quebec, which is a complete negation of democracy. You have in Canada a federal system where the French speaking part is keen not only in defending the environment they are also aware of their own capacity for self determination but now you have a US company suing Canada, the federal Government, for the ban on fracking in the province of Quebec – this is amazing!
Mark: Exacly, this is another great example because this company has never done any fracking, yet they are suing $ 250 m because they cant frack. The basis of that claim is that “this is the money we would have made and because we essentially have a right to compel fracking under this trade agreement if you are going to stop us from doing it you have to pay us the money we would have made”. It is a very salient point on fracking because a particular sector we see that this is taking place is energy. So on the one hand you see Governments in Europe, the Canadian Government, the US Government saying we want to fight climate change – and a couple of weeks ago Barak Obama said that we help save the world at the Paris Climate Change Summit – and now bringing in these powers vastly extending the range of them which corporations have used time and again to stop progressive legislation around climate change, The two casees are only the tip of the iceberg and we really fear that opening this up through the EU US Trade deal, the EU Canada trade deal you are going to see a whole litany of these cases year after year.
Brian Becker: Another example is that the corporate entity Violia is suing the Egyptian Government for the loss of profits as a result of the country’s decision to raise the minimum wage. Of course we know that 40% of the people in Egypt live below poverty level – less than $2 a day. Now this corporation can sue the Egyptian Government against its actions of trying to remedy the problem of poverty by increasing the minimum wage.
Mark: This is something that happened in the immediate aftermath of what is commonly known as the Arab Spring so what we saw was in direct response to the people saying “we need this and the Government responding to the people’s wishes” but Corporate power stepping in and saying we don’t want that to happen. We see this across all sectors. For example in Slovakia, the Government was sued after winning election on the promise to re-nationalize health care, getting elected on that promise and in acting on that promise being sued for some $ 20m for taking that decision. The Government refused to pay that fine and their assets were seized in Luxenberg by another court and handed over to the company. So when you package all these together, what we are seeing here is a huge shift in power away from the state and towards companies. Yet at the same time we are seeing that the state hiding this from their citizens saying that this is just the normal aspect of the law making things fair for companies. But we can see quite patently from these examples that it is far from that. Through the retaliatory methods countries pay one way or another. In that sense we can see the real danger that not only are we seeing these outrageous rulings but more often than not they have to be followed. Bigdog countries can wither the storm than smaller and emerging countries which leads to a new kind of economic colonization because when we look at colonization what it is in essence is its absolute negation of democracy, that some other foreign entity can make the decisions on what is going to happen to the people in a particular country because that foreign country has taken over control. Here we have the end of the classical formal colonial period – annexation of territory – being replaced by a new kind of colonialism through more informal mechanisms annexation of legal systems, political systems . This is about protecting investments. In the UK the response from the Government to TTIP is that the UK has some 90 treaties with different countries and we have not been sued successfully under them. For a start that is not true, the UK has been sued but when the UK commission researched from the London School of Economics as to what would happen to the UK if we signed up the TTIP, the research found that we would be likely be sued more times than Canada. Canada is the most sued Country in the northern hemisphere under these powers (about 35 times largely through NAFTA). The reason that they found that the UK would be sued more times than Canada is very simple because the US has more capital stock invested in UK than it does in Canada. And correspondingly the richest countries in the world have a lot of their activities in the poorest countries where they ensure that they get access to services markets raw materials all kinds of things. So because of that what we are going to see is that the poorer countries facing these law suits from corporations which come from rich countries and that would entrench further the situation that we already have on global inequality and the poorest people are getting poorer and this will just add to that.
The US wants the EU to remove its agriculture tariffs to remove bans on things like the use of growth hormones the use of antibiotics in animals and to give access to its public services. In return the EU wants access to Buy America where the Buy America Act requires the local states to purchase from within the country. Suddenly, now we see the French and the German Governments coming and decrying this. The reason for this is very simple and that is they both have elections next year. Right now there is a huge opposition in society that the French and German governments cannot win a new election if they support TTIP. There is no sign that TTIP is going to be signed anytime in the next year.
People are beginning to understand that trade is quite simply – under these leaders – is a proxy for corporate greed and it is done in secret and they are opposed to that and will continue to be.