What you didn’t Know About The Link Between TTIP, COP21 and Secret Courts
Proposals for the secret courts of ISDS (investor-state dispute settlement mechanism) system were introduced during transatlantic trade and investment partnership (TTIP) talks, angering both MEPs and civil society.
ISDS would have allowed companies to battle it out with national governments before private courts, prompting fears that businesses would hold too much power over legislators.
European trade Commissioner Cecilia Malmström revealed plans for a new investor protection system, as an alternative to the highly controversial ISDS back in September, mainly due to enormous opposition to it.
Yet when openly questioned about the huge and ever growing opposition by European citizens to TTIP more widely, Malmström responded “I do not take my mandate from the European people.”
This unelected bureaucrat receives her orders directly from the corporate lobbyists that swarm around Brussels. In so doing, Cecilia Malmström has quite clearly demonstrated the contempt with which she and her fellow commissioners view the European people. When you add the minimum €20,000 monthly salary plus expenses and future revolving doors deals, this is a very lucrative business for people like Malmström.
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From The Independent – “The European Commission makes no secret of the fact that it takes its steer from industry lobbies such as BusinessEurope and the European Services Forum. It’s no wonder that the TTIP negotiations are set to serve corporate interests rather than public needs.”
It is here that you see the scale of lies and deceit between global leaders and their musings of climate change to appease the genuine concerns of the people at COP21 and the reality of trade agreements like TTIP. What one gives, the other takes away in equal measure.
Despite the self congratulatory backslappings at the Parisian COP21 meeting of 190 countries, even more trade and investment deals are in the pipeline that would empower corporations to challenge strong government action on climate change￼. The so-called emissions targets agreed in Paris are not to be policed in any way and are not binding.
The mere nature of global leaders attempting to tackle climate change emboldens the energy sector to work even harder to ensure that the web of deals and agreements are so great and tangled that even attempting to control them would be impossible.
There have been literally thousands of trade and investment agreements signed between countries that allows multinational companies to sue governments if changes in policy – even in rules to protect the environment or fight climate change – are deemed to reduce their profits. By the end of 2014, there were 608 of these investor lawsuits known to be taking place within international tribunals alone. The costs of these suits weigh heavily on governments, in the form of hefty legal bills and weakened social and environmental regulations.
It is alarming that a growing number of investor-state lawsuits aim directly at government initiatives in the energy sector, ranging from the phase out of nuclear power to moratoria on environmentally-risky shale gas development (‘fracking’). As law firms make money each time that an investor sues a state, this encourages more and more corporate lawsuits: for example, over legislation in the renewables sector.
Despite the evident risk to energy transition, even more trade and investment deals are in the pipeline that would empower corporations to challenge strong government action on climate change. Amongst them is the Transatlantic Trade and Investment Partnership (TTIP)
As it turns out, 35 per cent of all investor state claims relate to oil, mining, gas and electricity (Source: UN Conference on Trade and Development). States have now signed more than 3,200 international investment treaties.
These treaties give sweeping powers to foreign investors, including the ability to file lawsuits directly against states in international tribunals in the case of alleged violations of the treaties’ provisions. These international lawsuits usually circumvent local courts.
Investor-state cases have mushroomed in the last two decades from a total of three known treaty cases in 1997 to a record high of over 50 new claims filed per year in 2012 and 2013. Globally, 608 investor-state disputes were counted at the end of 2014, but due to the opacity of the system the actual figure could be much higher.
Cases are usually decided in secret by a tribunal of three private lawyers, the arbitrators, who have a financial stake in the system and clearly hold a number of conflicts of interest.
Investors have triumphed in 60 per cent of investor-state cases where there has been an actual decision on the merits of the case, whereas states have won only 40 per cent of the time.
Award figures may reach up to 10 digits. The highest known damages to date, US$50billion, were ordered against Russia, to the former majority owners of oil and gas company Yukos.
To date, the main financial beneficiaries have been large companies and rich individuals, with 64 per cent of the money from known awards of over US$10 million having gone to companies with over US$10 billion in annual revenue. Another 29 per cent of these awards have gone to companies with between US$1-10 billion in annual revenue, or to individuals with over US$100 million in net wealth.
“Current trade and investment rules provide legal grounds for foreign corporations to fight virtually any attempt by governments to restrict the exploitation of fossil fuels.” Naomi Klein, journalist and author
Polluters have also used the threat of costly investor lawsuits in attempts to pressure governments to accept controversial energy projects. Now these same companies are enthused about the prospect of far-reaching rights for foreign investors in upcoming trade agreements, such as the EU-US free trade deal TTIP and the EU-Canada CETA.
US-based oil and gas multinational Chevron, for example, is lobbying for “a world-class investment chapter” in TTIP. The company has had several meetings behind closed doors with the EU’s TTIP negotiators.18 Chevron focused its entire response to the US government’s TTIP consultation on investment protection, in its opinion “one of our most important issues globally”. Chevron is currently suing Ecuador to avoid having to pay US$9.5 billion to clean up oil drilling related contamination in the Amazonian rainforest, as ordered by Ecuadorian courts. The case has been lambasted as an “egregious misuse” of investment arbitration as a way to evade justice.
In its contribution to the European Commission’s consultation on investor rights in TTIP, Chevron has attacked proposals to reform the system so as to preserve countries’ right to regulate, and has even proposed to expand the corporate privileges granted in TTIP. They are supported by other corporate lobby groups in which big oil and energy play an important role and have put forward similar positions.
“Should you let a group of foolish lawyers interfere with saving the planet?” Nobel Prize-winning economist Joseph Stiglitz
One can easily imagine how companies, seeing their extractive dreams threatened by democratic opposition or tough anti- pollution regulations, could file, or threaten to file, costly investor lawsuits to dissuade governments from strong action to combat climate change.
French multinational Total and US-based oil and gas company Schuepbach, for example, have already challenged the introduction of a ban on fracking in the French courts. The inclusion of investor-state dispute settlement in more trade deals such as TTIP would give corporations an extra tool – and in some cases a second chance – to challenge public interest policies.
As corporate lawyers and dirty energy producers lick their lips in anticipation of more rights for foreign investors in trade deals such as TTIP and CETA, a growing movement around the world is becoming attuned to the democratic threat represented by these treaties.
More than 3.2 million people across the EU have signed a petition against TTIP “because they pose a threat to democracy and the rule of law”. When the European Commission organised a public consultation on the issue in 2014, 97 per cent of the 150,000 contributions protested against the proposed excessive rights for foreign investors in TTIP. It was not only trade unions, consumer and health groups, environmentalists, and digital rights activists that spoke out, but businesses and governments as well.
Graham Vanbergen – TruePublica