Chevron Lobbied For Corporate Sovereignty Rights In TAFTA/TTIP To Act As 'Environmental Deterrent'

from the they're-not-even-trying-to-hide-it-anymore dept

Back in 2014, Techdirt noted that arguably the most serious problem with corporate sovereignty was not the huge awards that could be imposed on countries, but the chilling effect the mere threat of those awards could have on national sovereignty. In that post, we quoted from a remarkable 2001 article in The Nation. A former Canadian government official in Ottawa revealed that numerous proposals for new environmental regulations had been dropped in the face of threats that NAFTA's investor-state dispute settlement (ISDS) framework would be used against Canada if it brought in new laws. The Techdirt post also mentioned a case in Indonesia, where a mining company dropped a corporate sovereignty case when it was offered "special exemptions" from a new mining law.

More recently, we've seen New Zealand put on hold its plans to require plain packaging for cigarettes, as a result of Philip Morris bringing an ISDS claim against the Australian government for doing the same. The New Zealand government was concerned it too might get hit, and so decided to wait. Now that the Australian case has been thrown out, New Zealand is pressing ahead with its plain packs legislation.

The chilling effects of corporate sovereignty are now so well established that companies are even beginning to cite them as a reason for including it in trade deals. The minutes of a meeting that took place between European Commission officials, and Chevron executives, obtained by The Guardian, make that plain:

"ISDS has only been used once by Chevron, in its litigation against Ecuador," say the minutes of a meeting in April 2014 between unnamed Chevron executives and European commission officials, which the Guardian obtained under access to documents laws. "Yet, Chevron argues that the mere existence of ISDS is important as it acts as a deterrent."
Chevron is talking about the multi-billion dollar award made against Ecuador in one of the longest-running and most complex disputes involving corporate sovereignty. When contacted by The Guardian, Chevron repeated its claim that ISDS was a really great weapon to wield against countries, although naturally it expressed that view in somewhat different language:
ISDS serves a useful function of encouraging investors and host states to negotiate in good faith in order to avoid escalation of disagreements that occasionally arise.
Aside from confirming people's worst fears about the chilling effects of corporate sovereignty, Chevron's candid admission that it wants ISDS in TAFTA/TTIP as a "deterrent" reveals something else. It shows that corporations not only demand a unique privilege to circumvent national legal systems using secret tribunals composed of corporate lawyers, but are now trying to craft yet another "right": to deploy routinely the mere threat of ISDS as a "deterrent" to government action. Or, as you and I would put it, the right to engage in raw, brutal bullying on a global scale.

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Filed Under: chilling effect, corporate sovereignty, isds, lobbying, tafta, tpp, trade agreements, ttip
Companies: chevron

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  1. identicon
    David, 29 Apr 2016 @ 2:17am


    I am getting sick of the articles lining out terrible and bad consequences of ISDS as if they were some bad side effects one should take into account.

    News flash: they may be bad, they may be horrific, but they most definitely aren't side effects. They are the openly stated main effect of those agreements. It's not an unfortunate exception when corporate interests trump the law. It is the whole point.

    The purpose is stated clear enough, and the way the tribunals are constituted is perfectly in line with that.

    There is no sugar-coating here. It's rather: "this is the pill we want you to swallow. This is a crowbar. If you think of calling your law makers, we can save you the trouble. They are right here in our pocket. Gee, that's a fine economy you have there. Wouldn't want to have anything bad happen to it, would you?"

    Of course there are horror stories involved here. And of course they are used for "deterrence". That's how organized crime rolls. If they had to follow through on their threats every time without anybody caving, they would not last long.

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