Wikileaks has released a version of the investment chapter in the Trans-Pacific Partnership Agreement, the trade treaty under discussion at present. As a result the usual suspects are up in arms about the denial of democracy, the selling out of the law to corporate interests and all the usual malarkey. All most puzzling as the actual intention of this part of this treaty is to ensure that governments have to live up to the laws and contracts that they, as governments, sign up to. And that really is it. The mechanism by which this is done is that any arguments or cases where theres a decision to be made about whether the government has lived up to what it said it will do are decided outside of the court systems controlled by that government. As someone who has, at the personal level, done substantial work in the sort of countries where this would be important it sounds like a great idea to me. And as a matter of public policy it sounds like a great idea that a trade treaty should contain such protections for investors. <\/p>\n
What really confuses is people I regard as normally being reasonably level headed near losing their minds over this. I dont cover tech in the way I used to so I was unaware that Cory Doctorow is on very much the wrong side of this: <\/p>\n
The Investment Chapter highlights the intent of the TPP negotiating parties, led by the United States, to increase the power of global corporations by creating a supra-national court, or tribunal, where foreign firms can sue states and obtain taxpayer compensation for expected future profits. These investor-state dispute settlement (ISDS) tribunals are designed to overrule the national court systems. ISDS tribunals introduce a mechanism by which multinational corporations can force governments to pay compensation if the tribunal states that a countrys laws or policies affect the companys claimed future profits. In return, states hope that multinationals will invest more. Similar mechanisms have already been used. For example, US tobacco company Phillip Morris used one such tribunal to sue Australia (June 2011 ongoing) for mandating plain packaging of tobacco products on public health grounds; and by the oil giant Chevron Chevron against Ecuador in an attempt to evade a multi-billion-dollar compensation ruling for polluting the environment. <\/p>\n
Yes, Chevron has used this sort of treaty provision in that case with Ecuador. And this is a perfect example of why such treaty provisions are so useful: if not essential. Doctorow is there actually quoting Julian Assange which is perhaps why that quote manages to get this entirely the wrong way around. But it confuses even when its Assange himself saying such things. Wikileaks has shown us that certain governments are, at certain times, lying hounds. But as soon as we come to matters of economic governance theyre pure as the driven snow? What? <\/p>\n
For heres what has actually happened in that Chevron and Ecuador case. Yes, yes, theres lots of accusations one way and the other but a rough outline seems to be that the Ecuadorean court that Chevron was dragged before was, how shall we put this, less respectful of the full evidence than we might hope for? For we have at least one other court declaring that the plaintiffs had actually been writing parts of the supposedly expert and neutral evidence. And again, at least one non-Ecuadorean court finding that corrupt means had been used to gain the original verdict in the Ecuadorean courts. <\/p>\n
Please note that Im not arguing that Chevron did or did not pollute the area in which they drilled for oil. Nor that they shouldnt clean it up if they did, or that it was right or wrong for Ecuador to sign off that Chevron owed no more in this matter (or whether such a sign off happened, or is legal if it did). My argument is much simpler than that. Given what we know has been happening in this case who is going to trust the Ecuadorean courts on this matter? Quite: thus it all needs to be decided by some non-Ecuadorean legal system. Which is exactly what is happening under the investment chapter of the trade agreement which covers this matter, with arbitration running through The Hague. <\/p>\n
So, far, from this Chevron case being an example of the terrors to which TTIP will subject the world its an example of why we actually want such investor protections. Because if the government controls the courts and the government is also the actor changing the law then we really might not want those courts to be deciding upon who should be compensated over changes in the law. <\/p>\n
We can pick another example as well: anyone want to ask Bill Browder about how lovely it is to have the Russian courts ruling on his cases in Russia? <\/p>\n
Investors deserve and need protection from government. And when in a foreign country we need that protection to come from some judicial system that is not under the control of said government. <\/p>\n
Think of it this way for a moment. Here in Europe weve got the European Court of Human Rights in Strasbourg. This is part of the Council of Europe, not the European Union. And the basic contention of the entire system is that we cannot, not always at least, trust the governments of the nation states to properly protect the human rights of the citizenry. We thus have a legal system outside, and above, those national systems to ensure that such human rights are fully protected. All that the investment chapter in TTIP is doing is creating a similar system for the economic rights of investors in foreign countries. If your argument is that youve been done over by the local government then you probably dont want your case about it being run through the local courts presumably under the control of that local government. <\/p>\n
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