Friday, October 10, 2014

The power of corporations over countries

Our SOYMB blog has raised the issue of negotiation of secret trade agreements in particular the Transatlantic Trade and Investment Partnership. TTIP has provoked storms of protest from European campaign groups and largely left-leaning politicians. Governments have repeatedly played down concerns that secret tribunals established by TTIP will lead to large numbers of American corporations suing nations in trade disputes. The Independent reports on one aspect of such legally binding agreements.  United Nations figures uncovered by The Independent show that US companies have made billions of dollars by suing other governments nearly 130 times in the past 15 years under similar free-trade agreements. In one case alone the US oil company Occidental Petroleum successfully sued the government of Ecuador for $1.8bn. A separate case claiming $6bn has also be filed. Most of the US litigation has been brought against poor countries in Latin America and Eastern Europe with which America has bilateral trade relationships. Other precedents include the tobacco giant Philip Morris suing Australia and Uruguay for restricting advertising and putting health warnings on packets. New Zealand withdrew laws on plain packaging after the Philip Morris case. Germany, which is being sued under an ISDS by an energy company over its moratorium on nuclear power, has been particularly vociferous in its opposition. Ecuador was sued by  US oil giant Occidental  Petroleum after it stripped the company of the rights to explore for oil. Ecuador claimed Occidental was in breach of contract but the World Bank arbitrators ruled in favour of the company. Canada revoked a ban on hazardous waste exports to the US because of fears it could face an ISDS claim.

The tribunals are used to rule on disputes between nation states and aggrieved companies. The tribunals, held under the so-called Investor-State Dispute Settlement (ISDS) system, subvert democratic justice, giving power over foreign citizens to big companies. Hearings are held in private, in international courts at the World Bank in Washington DC, bypassing the legal system of the country being sued, meaning details are often impossible to uncover. In some cases the very existence of the case is not made public. Unions and NGOs have claimed that TTIP will open the floodgates for ISDS cases that will overturn the decisions of democratically elected governments in Western Europe. Other pressure groups fear TTIP could result in laxer US regulations on issues such as food standards, and that US labour laws could be forced on European countries. Unions such as Unite, as well as patient representative groups, have been particularly concerned that US healthcare giants could sue future British governments if they seek to reverse the privatisations of the NHS that have been gathering pace in recent years.
 Len McCluskey said: ”Wall Street financiers like BlackRock and Invesco are already heavily invested in the NHS - over 70 per cent of new contracts are now in private hands. This government has put the NHS up for sale and TTIP finishes the job off by making the sell-off irreversible.” Poland and Slovakia were both sued by private health and insurance providers when they attempted to reverse some of the privatisations of their healthcare systems.

Alex Scrivener, policy adviser at the World Development Movement, said: “These UN figures show that we shouldn't be taken in by the Government's empty assurances about how rarely ISDS is used. The reality is that corporations have routinely used these mechanisms to aggressively extract billions of pounds from governments around the world for doing things like freezing energy prices, raising the minimum wage or reversing the privatisation of health services.”

The US government already has their hands tied by these corporations so probably it doesn't really change anything for them.

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