Corporate Sovereignty Debate Heats Up In Australia
from the empty-exercises-in-pretend-democracy dept
As Techdirt has reported, so far corporate sovereignty has emerged as the most contentious issue in the TTIP/TAFTA negotiations. In response to the growing public concern in Europe, the European Commission held a consultation on Investor-State Dispute Settlement (ISDS), although that proved largely a sham, with the desired outcome clearly signalled by the choice of questions and how they were framed. Indeed, Karel De Gucht, the EU Commissioner with overall responsibility for TTIP, even went so far as to call the unprecedented 150,000 public responses an “outright attack” — which is an interesting way to characterize democracy in action.
By contrast, corporate sovereignty has not figured so prominently in the Trans-Pacific Partnership agreement discussions, even though it is likely to be as problematic there as for the transatlantic nations. The one exception is in Australia, where there has been an interesting debate on the topic thanks to Philip Morris using ISDS to sue that country over plain packaging for cigarettes, and more recently because of a Bill proposed by Peter Whish-Wilson, a senator from the Australian Greens party. It’s called the “Trade and Foreign Investment (Protecting the Public Interest) Bill 2014” (pdf), and consists of the following succinct paragraph:
The [Australian] Commonwealth must not, on or after the commencement of this Act, enter into an agreement (however described) with one or more foreign countries that includes an investor-state dispute settlement provision.
Earlier this year, the Australian Senate referred the Bill to the Foreign Affairs, Defence and Trade Legislation committee for an inquiry and report, which provided a rare opportunity for the public to comment on the inclusion of ISDS in TPP and other agreements. As with the European Commission’s consultation, the response was huge. The recently-published report (pdf) explains:
The committee also received over 11,000 emails from individuals using an online tool by which people could express their opposition to ISDS clauses in trade agreements to the committee. Due to the large number of emails received, it was not possible for the committee to accept them as submissions and publish them on the committee?s website. The committee, however, agreed to accept the emails as correspondence, and acknowledge them on the committee’s website.
Although they didn’t call it an “outright attack” like De Gucht, the committee was still unable to recognize that using an “online tool” is a perfectly natural and legitimate way for people to express their views these days. The committee also made a recommendation that the Bill should not be passed. But as a press release from the Australian Fair Trade & Investment Network (AFTINET) points out (pdf), the Australian government has a majority on the committee, so it was hardly likely to support a Bill that went against its own policy of accepting ISDS chapters on a case-by-case basis.
However, the report is reasonably fair in its distillation of the objections to the inclusion of corporate sovereignty clauses as outlined in submissions, and it’s worth reading the short document for a good summary of those, and of the arguments in favor of ISDS, which are echoed by the report as follows:
The committee is of the view that many of the alleged risks to Australian sovereignty and law making arising from the ISDS system are overstated and are not supported by the history of Australia’s involvement in negotiating trade agreements. While the committee acknowledges that past experience may not be an accurate guide to the future in terms of potential ISDS claims against Australia, it stresses that the investment treaty arbitration field is evolving in positive ways to enable countries, including Australia, to put exclusions in place, limit the application of ISDS to the investment sections of agreements, and generally tighten up the wording of agreements. The committee is of the view that it is far more important for Australia to manage any risks associated with ISDS provisions than to reverse its longstanding treaty practice and opt out of the ISDS system altogether.
That is, corporate sovereignty hasn’t been too much of a problem in the past (if you ignore the threat from Philip Morris), and we’re sure we can fix any problems that arise in the future. The first point is an incredibly naïve viewpoint given the changing ISDS landscape, with dozens of new cases each year, and multi-billion dollar awards being made. The second commands no confidence given the refusal to allow people to see drafts of these secret agreements involving ISDS; that means, for example, that serious blunders by the negotiators may not be caught until it is too late to do anything about them, with costly consequences for taxpayers. And even if there are no obvious mistakes in the texts, corporations will still use the threat of ISDS actions to bluff and to bully.
The Bill is unlikely to pass in the Australian Senate, and almost certain not to in the House of Representatives, where the Australian government retains a majority, but it has at least provided an opportunity for ordinary people to express their views on a matter that will have a big impact on their daily lives. Although that is welcome, it’s disgraceful that they were only able to do so thanks to the efforts of the Australian Greens party, which proposed this Bill largely with that end in view. Such consultations should be a matter of course for these kind of agreements, and the opinions expressed should have a real influence on the negotiations — and not simply be filed away as empty exercises in pretend democracy.