Democracy Gone Astray

Democracy, being a human construct, needs to be thought of as directionality rather than an object. As such, to understand it requires not so much a description of existing structures and/or other related phenomena but a declaration of intentionality.
This blog aims at creating labeled lists of published infringements of such intentionality, of points in time where democracy strays from its intended directionality. In addition to outright infringements, this blog also collects important contemporary information and/or discussions that impact our socio-political landscape.

All the posts here were published in the electronic media – main-stream as well as fringe, and maintain links to the original texts.

[NOTE: Due to changes I haven't caught on time in the blogging software, all of the 'Original Article' links were nullified between September 11, 2012 and December 11, 2012. My apologies.]

Sunday, October 11, 2015

WHY YOU SHOULD BE AFRAID OF THE TRANS-PACIFIC PARTNERSHIP

While protests raged in New Zealand against the Trans-Pacific Partnership (TPP) last month, Canadians have been mum on the agreement to create the world’s largest trading block. Until, that is, the terms were finalized this week and dropped with a thud right in the middle of the federal election campaign. 

If Canada’s experience with the North American Free Trade Agreement (NAFTA), which the TPP will replace, is any clue, fears about being taken to the cleaners on TPP are well founded. That’s because of something called investor-state dispute settlement (ISDS), a mechanism increasingly common in international trade agreements. 

The hitch: ISDS allows a foreign company to make a damage claim for trade-rule violations against a host state, but not vice versa. And the TPP significantly increases Canada’s vulnerability to such claims.  
ISDS gives an arbitration tribunal – made up of three private, for-profit trade lawyers, sitting in a hotel room somewhere – the power to interpret treaties and decide questions of public policy. 
These arbitration panels also make decisions on damages – sometimes reaching into the hundreds of millions of dollars – to be paid from public funds. The decisions can’t be appealed.
“When the public gets a chance to understand how ISDS works… most people will be opposed, if not completely in shock,” says Gus Van Harten, associate professor at Osgoode Hall Law School and author of Sold Down The Yangtze: Canada’s Lopsided Investment Deal With China.
A distaste for ISDS has, in part, persuaded almost three million Europeans to sign a petition against CETA, the proposed Canada-EU free trade deal. And it has driven Australians and New Zealanders, afraid ISDS will discourage governments from making laws in the public interest, into the streets to protest TPP.
They point to the way the Philip Morris ISDS claim against Australia has thwarted plans for plain cigarette packaging. And the way the Bilcon ISDS ruling against Canada over mega-quarry plans on ecologically sensitive lands on the Bay of Fundy threatens to cripple future environmental protection assessments.
In March, an ISDS tribunal came down against Canada for rejecting a mega-quarry proposed by Bilcon. The tribunal ruled that a negative environmental assessment of the site on Nova Scotia’s Bay of Fundy, with its endangered right whales, had been improperly conducted. A decision on the approximately $300 million damage claim is pending. 
Bilcon did not get to build its massive quarry. But dissenting arbitrator Don McRae, a professor at the University of Ottawa, predicted the case would nonetheless chill future environmental review panels by undermining officials’ willingness to protect the environment.
Rich countries that export capital champion ISDS as a way to protect their investors who operate in states with questionable judicial systems. Unwarranted state actions, such as expropriations, can get in the way of company profits. As a developed country, Canada probably never expected itself to become an ISDS target. 
But since 2005, it has been hit with 70 per cent of all NAFTA claims, for a total of 36. Perhaps because of Canada’s unyielding support of ISDS and its demonstrated willingness to pay damages, Canada now stands as the most sued developed country in the world.
Global ISDS claim numbers have exploded, rising from almost zero to 608 in two decades. Claims have jumped 57 per cent in the last five years alone. Trade lawyers, who promote treaties and ISDS all around the world, may be playing a role in the explosion. 
“The unspoken fact is it’s a very lucrative field,” says David Schneiderman, a professor at the University of Toronto’s Faculty of Law. “Lawyers, with the complicity of states, have created a new market for legal services.”
ISDS claims have cost Canada dearly. While Foreign Affairs, Trade and Development Canada puts the country’s damage payouts at slightly more than $158 million, Scott Sinclair, senior research fellow at the Canadian Centre for Policy Alternatives, says the number is closer to $190 million. That doesn’t include legal costs to the government for its own defence, which add up to an additional $65 million.
These amounts may seem like pocket change in the context of the $352 billion of investment the government says has flowed into this country from the United States. 
But Sinclair argues that $255 million in trade claims could also provide a lot of daycare spaces or life-saving prescriptions for Canadians.
And what about the cost of “chill,” when governments change course on regulations to avoid investor claims?
ISDS losses may not impair Canada’s ability to regulate in the public interest. Yet there is no doubt that companies threaten governments, says Kyla Tienhaara, a research fellow at Australian National University. 
Whether governments take the threats seriously enough to change course depends on many factors, including the grassroots popularity of the policy. “We have no idea how often investors bring this stuff up,” says Tienhaara.
Many observers say chill is evident in Canada’s own history with plain cigarette packaging, which strips cigarettes of some appeal by banning colours, imagery, corporate logos and trademarks, leaving just a simple name and a health message. 
But when Canada first broached the proposed changes in the 1990s, a clutch of multinational tobacco firms quickly came calling from the south, bearing threats of ISDS claims. And Canada backed off.
Likewise, the Philip Morris case has caused several countries, including New Zealand, to put their own plain-packaging plans on hold. Public health advocates may cheer about the "carve-out" in the just-signed TPP that bars tobacco companies from making ISDS claims. But tobacco is far from the only industry that uses ISDS to challenge regulations made to protect the public.
In fact, most ISDS claims target environmental protection measures. 
It usually takes no more than one ISDS claim to transform a government from ISDS promoter to skeptic. 
That’s what happened when Swedish nuclear operator Vattenfall hit Germany with an approximately $7.8-billion claim in 2012 for phasing out nuclear plants after the Fukushima wake-up call.
There has been no such change of heart in Canada. The only leader to express opposition to ISDS in the current election campaign is Elizabeth May of the Green Party. 
And even as disenchantment with ISDS spreads – with Latin America, Brazil, Argentina, South Africa, Indonesia, Austria, France and now Germany opposed – Canada remains puzzlingly devoted.
Erik Monasterio, a New Zealand forensic psychiatrist and anti-TPP activist, is convinced that if ISDS comes to New Zealand, industry will jump to sue governments over matters of public interest. “And for every dollar that you waste in court, there will be a lot of policy that hasn’t been put into place because people are scared,” he says.

Pending decisions in NAFTA trade disputes
Lone Pine Resources Inc.: Calgary-based company suing through its U.S. affiliate for $250 million over Quebec decision to revoke oil and gas development permits under the St. Lawrence River.
Eli Lilly and Company: U.S.-based conglomerate suing for $500 million over federal court decisions to invalidate two of its drug patents.
Mesa Power Group LLC: Texas-based outfit suing for $775 million over “sudden and discriminatory” changes to Ontario’s Feed-in-Tariff program in 2011 that it says favoured other local and international investors. The company is also claiming that “local content” requirements related to FIT program are inconsistent with NAFTA.
Windstream Energy LLC: U.S.-based company is suing for $475 million over moratorium imposed by Ontario on offshore wind development.
Original Article
Source: NOW
Author:  MICHELLE ADELMAN

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