Imagine a world where global multinational corporations have the power to sue any government that passes laws or regulations that have negative impacts on their current or future profits. Imagine that they could bring the case to a private tribunal whose judges are private lawyers working for other large multinational corporations, who sometimes bring cases to the same tribunal on behalf of their corporate employer. Imagine that such private tribunals can override decisions made by the highest courts of the country being sued. Imagine that there is no limit to the amount of taxpayer money the tribunal can order the defending government to pay the corporation who brought the suit. Imagine that the proceedings of these tribunals are both secret and cannot be appealed.
Well, this is the world that twelve nations, including the US, will be living in if they ratify the Trans Pacific Partnership (TPP) — a deceptively named “trade agreement” that will have broad impacts on many aspects of social life in the countries that bind themselves to its dictates. If you think of the system of law in a particular country as its social operating system, then you could say that any nation which signs the TPP will effectively override its social operating system with one that elevates current and future corporate profits to the highest value of society.
You might be excused for not knowing much about the actual content of the TTP agreement since it has been negotiated in secret by corporate and trade representatives with no substantial input from either government representatives or civic society. Until recently, most of what we knew about the actual language of the TTP had been leaked by Wikileaks. Finally, after years of secrecy the text of the TPP has been released. It confirms the aphorism that “if you are not at the negotiating table, you are on the menu.” Specifically, national sovereignty and the ability of governments to protect the health of their people and their ecosystems are on the menu.
The Investment Chapter of the TPP in fact builds and expands on the investor-state dispute settlement (ISDS) system pioneered in Chapter 11 of NAFTA (North American Free Trade Agreement), signed into law by President Bill Clinton.
As the non-profit organization Public Citizen explains:
The investor-state dispute settlement (ISDS) system, included in various “free trade” agreements (FTAs) and bilateral investment treaties (BITs), fundamentally shifts the balance of power among investors, States and the general public, creating an enforceable global governance regime that formally prioritizes corporate rights over the right of governments to regulate. ISDS provisions elevate individual foreign corporations and investors to the same status as sovereign governments, empowering them to privately enforce a public treaty by skirting domestic courts and directly “suing” signatory governments over public interest policies before extrajudicial tribunals.
The following real-life examples[1] provide a clear illustration of corporations using the ISDS system to override national jurisdiction and erode national sovereignty.
- After a legal battle which lasted a couple of decades and was compellingly portrayed in the 2009 documentary“Crude,” Ecuador’s highest court upheld a $9.5B judgment against Chevron Corporation for contaminating large sections of the Ecuador’s Amazon. In spite of the ruling by Ecuador’s highest court, Chevron is using the ISDS provided by a bilateral investment treaty (BIT) between the US and Ecuador to sue the government of Ecuador for the $9.5B of fines plus the legal fees incurred in the long legal battle.
- Swedish energy company Vattenfall successfully launched an investor-state claim against Germany in 2009 over permit delay of a coal-fired power plant in Hamburg. In 2012 it launched another investor-state claim for $5B of taxpayer compensation for Germany’s decision to phase out nuclear power by 2022 in response to the 2011 Fukushima disaster.
- To address the health damage caused by smoking, Australia passed a plain packaging law in 2011 that requires tobacco products to be sold in packaging dominated by health warnings and with the brand name of the product in standard font size at the bottom of the package. Philip Morris sued the Australian government using both the Australian courts and the ISDS afforded by an Australian-Hong Kong BIT. Despite Australia’s High Court ruling the plain packaging law constitutional and justified as a public health measure, Philip Morris is still pursuing billions of dollars of damage through the ISDS.
In fact, investor-state dispute settlement systems included now in thousands of bilateral investment treaties have delayed for two decades effective regulation of tobacco products in Australia[2], Canada[3] and New Zealand[4], where policies to label tobacco products were proposed in the early 1990s. By delaying tobacco product labeling for a few decades ISDS regimes has caused thousands if not millions of deaths.
But it is in dealing with the challenge of climate change that the TPP and its investor-state dispute settlement system becomes an existential threat to the very survival of our species.
Climate change and rising global temperatures are caused by increases in CO2 in the atmosphere due to our burning of fossil fuels. They are affecting global ecosystems in various ways – by changing the timing of seasonal life-cycle events, by shifting the range where species are found which can disrupt the food web of those species and of our own food web, by increasing pathogens, parasites and diseases and by increasing species extinction risk[5]. An increase in the global world temperature by 2 degrees Celsius above its pre-industrial level, carries with it the risk that global ecosystems will unravel to the point where their ability to support higher forms of life like homo sapiens can no longer be taken for granted. The Carbon Trackers Initiative[6] estimated that we can’t put more than 565 GT (Gigatons) of Carbon in the atmosphere before breaching the 2 degrees limit, yet there are 2,795 GT of carbon in the proven coal and oil and gas reserves of the fossil-fuel companies, and in the countries (think Venezuela or Kuwait) that act like fossil-fuel companies! So, if we want to survive as a species we need to keep about 80% of the proven fossil fuel reserves in the ground[7].
Market-based approaches like carbon trading have not been effective at curbing or slowing down the concentration of CO2 in the atmosphere. Carbon trading began in response to the signing of the Kyoto protocol in 1997. Hundreds of millions of tons of CO2 have been traded since, yet the level of emissions has continued to increase, and in fact has accelerated since 2000.
As a result the concentration of CO2 in the atmosphere has continued to increase unabated.
This means that the only way to preserve the livability of this planet for humans is to have governments around the world impose taxes on carbon or outright bans on the extraction and sale of fossil fuels. The introduction of such taxes or bans will certainly have a negative impact on the future profits of large multinational corporations, and not only those directly involved in the fossil fuel extraction, distribution and sale.
The Investment Chapter of TPP will allow corporations to file multi-billion dollar lawsuits against any government signatory to the TPP which dares to take the only effective measures to prevent climate catastrophe – carbon tax or bans on carbon extraction and sale. As ISDS lawsuits managed to delay the implementation of tobacco labeling laws in Australia, New Zealand and Canada for decades, it is easy to imagine that the large oil companies will manage to delay effective climate regulation past the point of no return. The unintended consequence of TPP will be to make human survival illegal. We need to do what we can to prevent the TPP from becoming our society’s new operating system. The survival of our species depends on it.
Urge Congress to Oppose the TPP
[1] http://www.citizen.org/documents/egregious-investor-state-attacks-case-studies.pdf
[2] In April 1992 the Australian Centre for Behavioural Research in Cancer recommended plain packaging: “Health warnings and contents labeling on tobacco products,” Anti-Cancer Council of Victoria, 1992.
[3] AP News Archive, May 19, 1994, “Canada May Be First To Force Plain Packaging Of Cigarettes”,
[4] New Zealand Public Health Commission, Draft Policy Paper on Tobacco Products (recommending plain packaging), July 14, 1993,
[5] http://www3.epa.gov/climatechange/impacts/ecosystems.html
[6] http://www.carbontracker.org/
[7] http://www.rollingstone.com/politics/news/global-warmings-terrifying-new-math-20120719
