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.

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Reader Comments (rss)

(Flattened / Threaded)

    Anonymous Coward, Sep 4th, 2014 @ 1:53am

    Right there in his name

    Sadly, that bill is just Whishful thinking.


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 4th, 2014 @ 4:16am

    To me all ISDS means is corruption.

    How does ISDS benefit the public?


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 4th, 2014 @ 4:29am

    Wait a minute. Did Karel De Gucht tell everyone of those ~150000 entities that because they didn't outright believe all.lies, then We attacked Him or just obvious corruption on these 'Free Trade Agreements'?
    Anyone know any newspaper or so and ask for clarification, please?

    Dear regards:

    Citizen of European Union nro:classified


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 4th, 2014 @ 4:35am

    Democracy is an illusion as soon as we get into areas where economic interests are involved. In the case of ISDS it is a very crude club to smash governments in the head with. Unfortunately due dilligence and international legal consensus is neglected on account of the chance of potential damage to a potential future source of possible tax and possible jobs.

    Money is put firmly above the legislature in cases of ISDS and that is what is unsettling about it.


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 4th, 2014 @ 4:42am

    I like the Australian bill. Can we get a law like that in the US?


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 4th, 2014 @ 4:51am


    If you understand german I would recommend this: lahm/10221432.html

    The commissions questions had some very biased prefaces that funnelled into an "under these circumstances" answer this or that question. The lack of actual legal text to give an educated and specific opinion on the questions really made the kind of standardized answers to the questions - that several online sites advocated - an inevitability!


    reply to this | link to this | view in thread ]

    Kronomex, Sep 4th, 2014 @ 6:04am

    Our LNP government here in Australia are deep in the pockets (I should say balls deep up the arse) with the corporations, multinationals, and Rupert Murdoch then the little person has no chance.

    Good on Whish-Wilson for making a valiant attempt, however, it's probably doomed to failure.


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 4th, 2014 @ 6:09am


    "How does ISDS benefit the public?"

    Other than exposing corruption, it doesn't - at all.


    reply to this | link to this | view in thread ]

    Argonel (profile), Sep 4th, 2014 @ 6:26am

    Dear governments,
    Corporate sovereignty is a persistent feature of dystopian science fiction because it is meant to be a warning, not an instruction manual.

    The Voting Public


    reply to this | link to this | view in thread ]

    Wade Erickson (profile), Sep 4th, 2014 @ 6:47am

    With corporate sovereignty in trade agreements, we have now gone from corporations as people to corporations as countries.


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 4th, 2014 @ 7:30am


    Yes , But first you have to own 99% of the wealth and control both parties while keeping a watchful eye on everyone and blackmailing them with the nsa ,along with controlling the police .


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 4th, 2014 @ 7:33am

    When I was a young whipper snapper we used to call it Corporate America , now it's called The America Corporation , oh wait that was only 15 yrs ago.


    reply to this | link to this | view in thread ]

    Who Cares (profile), Sep 4th, 2014 @ 10:12am

    Hadn't seen that.

    Didn't know DeGucht classified the comments as an attack.
    It is however something that is not unexpected.
    Democracy in the EU is all good and well as long as the proles vote/react as the top layers of the EU want.
    The moment that we uppity peasants decide to think for ourselves and vote/react against what they want the worst that happens is a delay to let people forget what they voted/reacted against and then get the wanted result in a way that doesn't involve the masses.
    You don't even want to imagine the pressure brought to bear in the event that a government actually sides with their population instead of helping out the EU bureaucracy getting what it wants.


    reply to this | link to this | view in thread ]

    Mason Wheeler (profile), Sep 4th, 2014 @ 11:21am

    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.

    I see nothing wrong with it. That's exactly what it was: people finally seeing that they are threatened in a very real way by this, and attacking that threat. That is democracy in action; true democracy has always been a messy, argumentative process because people are different and diverse.


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 4th, 2014 @ 11:50am

    Re: Hadn't seen that.

    The scary thing is that you are not that far off.

    EU is build on brown points and horse-trading. Democracy is an illusion as EU has never been meant to be a democratic entity outside of the parliament and even the parliament has very severe short-comings when it comes to representation of voters (outside of some candidates being relatively active post-election to gather public opinions and arguments - Others are just there for their several wages).

    Real respect for EU is impossible to gather unless pan-european lists are accepted into the parliament instead of pure national lists, a wider part of the group-formation and subcommittee priorities from candidates are made public before elections (should be top priorities for the parliamentarians really), certain very well-known damaging horse trades in the council of ministers is removed and the legislative monopoly outside public influence gets liberated as to avoid too much detail legislation and technocratic abuse of power.


    reply to this | link to this | view in thread ]

    Anonymous Coward, Sep 5th, 2014 @ 6:35pm

    Well, if the Christian Church really has taken over the government there in the land down under, its pretty obvious that every bad aspect of this and every other "treaty" the US offers up, will be OKed in full.


    reply to this | link to this | view in thread ]

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