“A revolution against the law”
That's how UN independent expert Alfred de Zayas describes the controversial and increasingly used 'investor-state dispute settlement' mechanism which enables corporations to sue states for lost profits – including those yet to be made.
The UK government want this ‘corporate court’ included in the secretly negotiated EU-US Transatlantic Trade and Investment Partnership (TTIP). This is despite widespread public opposition that resulted in the biggest ever response to a European Commission public consultation: 97% of people called for investor-state dispute settlement to be removed from TTIP.
TTIP is promoted as being focused on the “shared values” of the USA and EU, including “upholding and promoting human rights”. However, the USA and EU prefer to protect corporations from human rights law; they were the strongest opponents of a UN move to create a binding mechanism for holding corporations accountable to international human rights law supported by 80 countries and 400 organisations.
In June, an unprecedented 10 UN independent experts released a joint statement outlining their fears for human rights in the 'new generation' trade deals including TTIP.
So, in honour of Human Rights Day, here are three ways that investor-state dispute settlement cases have led to the trading of human rights for profit.
Firstly, the investor-state dispute settlement is a threat to the human right to health. Australia and Uruguay are battling an investor-state dispute settlement case from tobacco firm Philipp Morris after introducing plain packaging for cigarettes – the UK is already facing a similar challenge from both Philipp Morris and British American Tobacco in its domestic court system. World Health Organisation's director Margaret Chan revelead that Australia has already spent nearly $50 million defending the case, saying that: “What is at stake here is nothing less than the sovereign right of a nation to enact legislation that protects its citizens from harm.”
Secondly, the settlement threatens the human right to a decent wage. After the uprisings in the Arab world, the Egyptian government agreed to increase the minimum wage from around $56 to $99 a month. Egypt is now being sued by French corporation Veolia after the city of Alexandria increased the wages of their refuse collectors.Veolia had replaced the waste collection system run by the 'zabaleen' ('garbage people') for many years until a privatisation under Gamal Mubarak. Proponents argued that as the increased wage led to an increase in costs Veolia has every right to reimbursement. The Egyptian people might argue that they also have a right to the first increase in a paltry minimum wage in years – without being sued for a believed $100 million for achieving it.
Thirdly, any addition of the investor-state dispute settlement to TTIP goes against the human right to a clean and healthy environment. After the 2011 Fukushima disaster, German MPs voted to phase out nuclear power by 2022. Swedish energy company Vattenfall is now suing Germany under the Energy Charter Treaty for $4.7 billion for doing so. When the Canadian province of Quebec passed a moratorium on fracking – as has happened in both Wales and Scotland - due to fears over pollution and impacts on communities, Canadian company Lone Pine Resources opted to sue Canada for $250 million for its lost future profits.
While the European Commission engages in cosmetic reforms to the investor-state dispute settlement, European people have spoken clearly.As de Zayas argues this settlement: “cannot be reformed. It must be abolished.”
Mark Dearn is a Trade Campaigner for War on Want