Corporate Courts — A Big Red Flag On “Trade” Agreements

Dave Johnson

Think about everything you understood about our system of government here in the United States. We’re  governed under a document that starts with the words, “We the People.” Right? When We the People agree that something should done to make our lives better, it’s supposed to get done. Right?

You didn’t know it, but that whole system thing changed several years ago. Our government, in our name, signed a document that placed corporate profits above our own democracy. The “investor-state dispute settlements” chapter in NAFTA (and similar agreements) places corporate rights on above the rights of people and their governments.

As a result of “NAFTA-style” investor protections that are part of so-called “trade” agreements,  giant corporations can and do sue governments for trying to pass laws that protect their citizens from harmful chemicals, ban harmful products, and protect the rights of working people, among  other things. Corporations even sue governments for passing laws that might cause the investors in the corporations to make a bit less money — like raising the minimum wage.

But wait, there’s more. The suits aren’t even heard in courts. They are settled by corporate-controlled tribunals set up by these trade agreements. AFL-CIO’s Celeste Drake writes about these tribunals, in “AFL-CIO and Uruguayan Workers in Solidarity to Protect Democracy From ‘Corporate Courts'”:

This mechanism bypasses all democratic processes, such as domestic courts, to directly sue a host country in an unaccountable private tribunal in order to receive compensation for government actions that could potentially harm corporate profits.

Who makes the decisions in these tribunals?

Unaccountable and unelected private arbitrators — usually lawyers who sit on tribunals one week and represent global investors the next. In other words, ISDS is essentially a “corporate court,” a legal system by and for corporations and the global elites.

Please click through and read the entire post, if you have a few minutes.

“Banana Republics” — The Original Reason For Investor Protections

There is a valid reason for this sort of protection in some cases. Picture a poor “banana republic” country ruled by a dictator and his cronies. A company might want to invest in a factory or railroad — things that would help the people of that country as well as deliver a return to the company. But the company worries that the dictator might decide to just seize the factory and give it to his brother-in-law. When things like this happen, the company loses everything. So companies won’t invest in such countries, and the people don’t get the benefit of those  investments. Agreements to protect investors, and allowing a tribunal not based in such countries (courts where the judges are cronies of the dictator), make sense in such situations.

However, when dealing with democratically governed, law-abiding countries like ours (used to be), there is no place for agreements that put the rights of corporate investors above the right of We the People to make decisions. These “protections” are in these trade agreements, because  corporate/conservative types believe that democracy itself is illegitimate, and believe that corporations need protections from “the waves of madness that occasionally flit through the population.”

Companies that make a fortune selling things that harm or kill us; that harm, exploit, or impoverish their workers; and pollute our environment, certainly want protections from us. They worry that we might wake up and demand protection from a product like tobacco, that kills 480,000 Americans each year. They worry that we might demand that companies stop making a fortune by dumping carbon into the air. They worry that we might raise our minimum wage, pass laws requiring sick days, or lower the hours in a workweek.

Corporations believe in one-dollar-one-vote. Their owners are so arrogant that they believe that they are “makers,” and 47% of us are just “takers” who must be kept out of voting booths at all costs. They think that democracy itself is illegitimate and want protections, just in case We the People demand good wages, safe products, and a clean environment.

Examples That Will Shock You

Here are some examples of corporations suing government that you may not even believe could happen.

Example: A “Switzerland-based” tobacco company is suing the government of Uruguay for damages caused by the government’s anti-smoking efforts. This suit is under the investor-to-state dispute settlement (ISDS) provision of the Switzerland-Uruguay Bilateral Investment Treaty (BIT)

Example: Germany has decided to reduce its use of nuclear power. So the Swedish energy company Vattenfall is suing.

Example: French multinational Veolia sued Egypt for increasing the country’s minimum wage.

Celeste Drake’s post has more examples.

A Rigged Process

That is what our one-sided, big-corporation-dominated trade process has brought us. Giant corporations are working with our own government to secretly negotiate the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), and the Trade in Services Agreement (TISA). This last agreement was so secret that we didn’t even know it negotiations were underway, until Wikileaks revealed this in June.

A rigged process has ushered in “trade” agreements that place the profits of giant corporations over governments’ ability to protect public health. The rigging starts with secret negotiations with only corporate representatives (and negotiators who want to collect a fat check from corporations later) at the table. Then a “fast track” process pushed these agreements past legislators before the implications are fully considered.

You probably didn’t know that these “investor” protections — sold as a way to protect investors from having their investments stolen by “banana republic” dictators — are now being used to protect corporations from the “whims” of democracies. Odds are even your member of Congress might not even understand this. It’s a good time to call your member of Congress and your Senators and let them know you don’t want “fast track” and you don’t want NAFTA-style rigged trade agreements. Let them know you want your democracy back.

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