In 2012 US-based Lone Pine Resources sued Canada in the World Bank’s corporate tribunal
under NAFTA’s Chapter 11 process, claiming that Quebec’s moratorium since 2011 on fracking was costing Lone Pine $250 million in lost profits. Lone Pine wants to engage in fracking right under the St. Lawrence River. Fracking is highly destructive, has been documented by the US government to cause earthquakes, poisons the groundwater and wells of whole regions, wastes tremendous amounts of water, destroys farmland where the wells are drilled, disrupts and terrorizes communities, wrecks local economies, and produces little gas. Most wells produce nothing, while the most productive fizzle out in a year or two, leaving nothing but wholesale economic, physical, soil, and water destruction in their wake. The main power function of fracking is as a typical Wall Street securitization bubble. Any sane region or country would ban it.
But according to NAFTA, none of this matters or has any standing whatsoever as a basis for legitimate public policy. According to NAFTA, public interest policy literally has no right to exist, wherever it gets in the way of corporate profit.
Also in 2012, US-based Strongpoint Solutions filed a similar suit with the tribunal for $27 million. Although its complaint is somewhat vague, in effect it claims that Canada’s federal and provincial statutes against burglary, extortion, murder, and other acts interfere with its ability to offer such profitable services as contract murder. It claims these laws comprise “technical barriers to trade” and are according to NAFTA an illegal constraint on “investor rights”.*
I’ve previously written (parts one
) about the provisions of the TTIP and TPP for regulatory Gleichschaltung
(coordination) under corporate rule. While that’s meant to be a longer-term project, a more immediate and direct attack on democracy and politics will be these compacts’ souped-up corporate tribunals called “investor-to-state dispute settlement” (ISDS)
ISDS is a way for corporations to directly sue countries over any policy provision which allegedly costs them profit. The suits take place in secret tribunals presided over by corporate lawyers. These tribunals are lawless administrative courts outside of any kind of democratic oversight or accountability. They’re most similar to administrative courts which have been run by secret police organizations like the tsarist Okhrana and the Nazi SS. The process gives oligopoly corporations based in any country which is party to a compact special privileges over the rights of the people or of any legitimate business within any country which is also a party. It exalts the “right” to corporate profit as the supreme imperative of society, lofting it far above all other values, rights, goals of policy and law.
If the TTIP and TPP are ratified, their ISDS provisions will follow the NAFTA model for filing disputes. From the corporatist point of view this is an improvement over the older WTO model. Under less rigorous globalization compacts, when a corporate sector based in a country feels hampered by a law or regulation in another participating country, its government sues the other government in a WTO corporate tribunal. When, hardly ever “if” (the complainant almost always wins), the WTO finds the law in question to be a barrier to “trade”, it grants the plaintiff country the right to impose retaliatory tariffs on imports from the defendant country. These so-called retaliatory tariffs themselves are chosen in a way to penalize certain imports in order to support certain exports, so what the complainant wins at the tribunal is not so much a right to retaliate as a right to commit new aggression.
But from the point of view of the original surly sector, this is a highly convoluted process which doesn’t necessarily do IT any good. Thus at the behest of the Monsanto the US government sued the EU over its GMO regulations. In 2006 the US won at the tribunal and has since been able to impose tariffs on some EU exports, mainly some peripheral luxuries. This “win” therefore hasn’t done Monsanto and the GMO cartel much good.
But under the ISDS provision of NAFTA
and the over 3000 multilateral and bilateral compacts based upon it, a corporation directly sues a government at a World Bank International Center for Settlement of Investment Disputes (ICSID) tribunal. This tribunal is similar to a WTO tribunal, but instead of rewarding a government plaintiff with the right to impose a tariff, it rewards the corporate plaintiff with a direct monetary award, paid for by the taxpayers of the target country. This is meant to be (1) a direct corporate welfare conveyance laundered as a “judicial” award, and (2) a pretext to gut regulation and law at lower levels of government which isn’t sufficiently pro-corporate, and to impose a chill effect which prevents the enshrinement of such laws and regulation in the first place.
Chapter 11 lets corporations complain about any policy, law, regulation, court decision, which in any way allegedly infringes on any hypothetical profit the corporations can conceive. This has nothing to do with uneven treatment between foreign and domestic businesses. Even where the provision applies equally to all, it’s held to strict liability as far as how it impacts any corporation’s alleged ability to profit.
This is proof that globalization compacts are not about trade, but about power. If they were about trade, then a law which applied to everyone equally wouldn’t be a problem.
NAFTA also prohibits “performance requirements”, such as that in order to receive various permits a company has to commit to a region for a period of time, source local inputs, etc. In every way it seeks to enshrine a regime of 100% “rights”, i.e. license, 0% risks or responsibilities for the corporations.
The boorish quotes here
exemplify the psychopathy of the concept of corporate “rights”.
Lone Pine claims the Quebec moratorium is an “arbitrary, capricious, and illegal revocation of [its] valuable right to mine for oil and gas.” The firm says the government acted “with no cognizable public purpose,” even though there is broad public support for a precautionary moratorium while the environmental impacts of fracking are studied. Milos Barutciski, a lawyer with Bennett Jones LLP, who is representing Lone Pine in the arbitration, described the moratorium as a “capricious administrative action that was done for purely political reasons – exactly what the NAFTA rights are supposed to be protecting investors against.” It may seem unbelievable but this lawyer may be correct that Lone Pine’s right under NAFTA to make a profit is more important than the right of communities to say no to destructive and environmentally dangerous resource projects.
We see again how from the point of view of corporatism politics as such is an atavism, and such values as democracy, public health, environmental protection, are by definition “capricious”.
This notion of a “right to profit” is a piece of extremism by any measure. As the provisions are crafted, the “legitimacy” of this hypothetical profit only needs to be confirmed by any friendly government bureaucrat. All that’s needed is for an official with any relevant agency to tell the corporation that he expects it to be able to get a permit, qualify according to a law, etc., and/or that he expects the proposed corporate action to be profitable. No matter how bogus, no matter how suborned, this is enough to establish the profit as some kind of mystical reality. (I wouldn’t be surprised if the accounting regulators then let the company list it as some kind of Account Receivable or other asset.) Needless to say, even now it’s easy for a big corporation to find a regulator chummy enough to give this testimony. It’ll be even easier under regulatory coordination. Indeed, in that case regulators will have a duty to seek such mystical “profit” opportunities on the corporations’ behalf and notify them of these.
There’s something Kafkaesque about it – the people comprise the real defendant and will pay the judgement, yet are not allowed any real representation or to observe the proceedings. Their “representatives” are government bureaucrats who are on the side of the prosecutor, and who helped the prosecution prepare its case.
Beyond this, the concepts which guide ISDS and globalization and corporatist policy in general – “risk-benefit analysis”, “best practices”, core good regulatory practices”, “Regulatory Impact Assessment”, “market liberalization”, “equalization”, “sound science”, “necessity”, “effectiveness”, and so on set up an adversarial antagonism between corporate profit and human society, with a strong presumption in favor of the corporations.
This includes modes of measurement which are automatically in favor of the corporation. There’s nothing scientific or rational about anything like “risk-benefit analysis”, which is on the contrary a purely ideological concept. RBA is arbitrary by definition, in that is arbitrarily enshrines corporate profit as the only value. It can be meaningful at all only to those who adhere to this ideology. If you don’t recognize any right of corporations to a profit, or if you think profiteering shouldn’t exist at all, or if you think the profit motive is only a tool to be used to help increase human well-being, from any of these points of view RBA or anything like it would be absurd and depraved.
Humanity must reject the entire concept in principle. We must apply the constitutional corporatism test – do corporations with special privileges legitimately exist at all? We deny the right of corporations to exist at all, and we deny their right to a profit (let alone any other “rights”). Therefore we reject the whole mode of measurement and comparison these compacts fraudulently claim to enshrine. I say “fraudulently” because there could never be any measured result which this regime would consider so little a gain to the corporation as not to be worth the damage it would cause, or too big a loss to the people that it wouldn’t be worth any corporate gain.
Thus the goal is to enshrine a guaranteed income for any corporate con artist. If a corporation can envision a profit, it has a right to be awarded this profit in reality. The job of the government and the tribunal is to ensure this profit. This is an extreme manifestation of the fact that corporatism is not designed to provide good products and services, but to guarantee itself a profit and maximize its power. As I said earlier, corporations are not such good/service providers, but power-seeking organizations
who hijack and use an economic sector as their base of operations for economic and political domination.
Meanwhile the “right to profit” is part of the mysticism of power, and any provision enshrining it is the essence of a command economy.
Both Canada and Mexico have lost cases totaling several hundred million dollars in “damages”. That’s in addition to legal costs (which aren’t awarded to the defendant even when it wins) and tribunal fees. Extractive sectors like mining and fossil fuels have been especially aggressive in using these tribunals. Over 50% of ISDS cases have been filed by extractive corporations against Latin American countries. But as the Lone Pine case described above exemplifies, extractors are looking to the CETA and the TTIP to open up Canada and Europe to fracking, and to tribunal suits against any country which tries to protect its people, economy, and environment.
Similarly, although Monsanto and the GMO cartel have had little to complain about in the US or Canada so far (Mexico may be a different story these days
), they’re eager for the TTIP to give them the power to sue the EU over the many regulatory and political hurdles Europe poses to the GMO assault. Such suits would be win-win for Monsanto, since they’ll either win money awards, or better yet the existence of the ISDS tribunal will give the EC the final inducement it needs to jettison all concern with European democracy and directly approve many or all GMO applications, the way it has always wanted to
The possibilities for lawsuits and extortionate “damage” awards are limitless. Eli Lilly is suing Canada for $500 million for what it views as an insufficiently strong patent for anti-depression drugs. Renco is suing Peru for $800 million over extraction permits. Canada is suing the EU over the European Fuel Quality Directive, which disadvantages its filthy tar sands oil (the same which is slated to be conveyed through the Keystone Pipeline in defiance of US law). Today there are over 500 suits pending before the World Bank tribunals.
Civil society, democracy advocates, real businesses, farmers, scientists, public health professionals, environmentalists, and many others, every part of human society and the human economy, have long pointed out that there’s no conceivable public need for this form of extra-constitutional, supra-legal form of tribunal. For any and all actual needs, existing national and regional law is more than sufficient. As in so many other cases, the reform point of view and the abolitionist position agree that ISDS and these tribunals shouldn’t exist at all and serve no purpose other than to aggrandize corporate power and domination.
may bode well for the future of the TTIP in the European Parliament.
In June 2011 a European Parliament resolution on the EU–Canada negotiations stated that, “given the highly developed legal systems of Canada and the EU, a state-to-state dispute settlement mechanism and the use of local judicial remedies are the most appropriate tools to address investment disputes.” In July that year, the Commission’s own Sustainability Impact Assessment of CETA came to the same conclusion, recommending a state-to-state dispute process only.
The ISDS provision is so clearly hostile to democracy and economically bad for the people of any country that its inclusion in the TTIP has become a major rallying point for the opposition in Europe. It’s so inflammatory that in January the EC felt the need to retrench. It announced it would issue a public “consultation” in March, followed by a three month public comment period.
We already know this “consultation” will be a scam, since we’ve already been through a similar consultation on ISDS with the EU-Canada trade compact (CETA), set to go into effect in 2014. CETA is evil in itself, and is a forerunner of the US-EU TTIP. The Seattle to Brussels Network
was able to see a leaked copy of the secret CETA negotiation text on “investment protection” and ISDS and compare it to the public “consultation” note. The public note is just a propaganda document which is much weaker and loaded with anodynes than the real text. It has boilerplate about a theoretical “right to regulate” and misleading definitions and depictions of the scope of the corporate powers being conferred.
The main point is that the real text gives coordinated regulators and tribunals vast discretionary power to interpret the provisions and their own powers to act on behalf of corporate imperatives. Much of the language is vague and meant to preserve this discretionary power of bureaucracy, much like with the regulatory coordination provisions. Also like those, it’s meant to postpone specific harsh measures for the subsequent administrative process, rather than daring to run the political gauntlet by including them formally in the compact.
The public CETA consultation note promises certain limits on the right to profit, on concepts like “fair and equitable treatment” (FET), on what constitutes an “investment”, a code of conduct for the arbitrators on the tribunal, a promise of transparency, and other anodynes. But the actual negotiation text is significantly different in each case, and in each case what the note says or implies is much weaker, or is mere vague boilerplate with no corresponding provision in the real text. The actual text also contains all sorts of preemptions of the constraints alleged in the note, such as “most favored nation” and similar clauses. Even if constraints on ISDS were initially to be encoded, these would be subsequently subject to “equalization”, “harmonization”, and other modes of destruction under the permanent ongoing regulatory coordination process.
We can expect the upcoming TTIP public “consultation” to be a similar propaganda ploy.
Meanwhile, as the EC negotiators made clear, it’s only the ISDS provision which is being delayed at all, and only this may in theory be changed. The rest of the TTIP – the negotiations over the sectoral assaults and the regulatory Gleichschaltung plan are at full steam ahead, and these will not be ameliorated one bit.
The TTIP (and TPP) as a whole is an assault on freedom, democracy, economic prosperity, and human happiness. It’s to be a major escalation of corporate tyranny, a major step toward corporate domination. As we should have abundant experience by now, all of its promises are lies, and none of its promised benefits will come true. It’ll only accelerate the corporate destruction of the real economy and what’s left of democratic politics, leaving behind only austerity, serfdom, hunger, disease, and an ever more severe police state.
We need to reciprocate the EC’s political ploy by seizing the opportunity of the sham “consultation” to expose the overall sham of the TTIP and engineer its political defeat. This is likely to be the last chance the politics of representative democracy gets.
[*Actually, that case is a rumor and may not really exist. But even if no such suit has been filed, I defy anyone who supports ISDS to tell me by what logic it shouldn’t be able to succeed at the tribunal if it was filed.]