The Trans-Pacific Partnership Would Empower Corporations to Attack U.S. Policies in Foreign Tribunals and Demand Taxpayer Compensation for Our Environmental, Health and Other Laws
TPP would grant foreign corporation shocking new powers to attack the laws we rely on for a clean environment, safe food and decent jobs. Under TPP, these corporations could sneak around our courts and laws and grab millions in our tax dollars all because they don’t like our laws. How could this be possible? TPP gives foreign firms special privileges – better treatment than local companies. It empowers foreign corporations to drag the U.S. government in front of secretive foreign tribunals comprised of 3 private attorneys authorized to order massive payments. There is no outside appeal to these tribunals dictates. And there is no limit on the laws the corporations can attack or the amount of our tax dollars the government can be ordered to pay when the foreign corporations think that their special TPP rights have been undermined by the laws all of the rest of us have to meet.
This crazy system of extreme corporate privileges is called the "investor-state" regime. It gives an individual foreign corporation equal status with the entire U.S. federal government - allowing the foreign firms to privately enforce a public treaty. The three corporate lawyers who act as judges are unaccountable to any electorate. And, many rotate between suing governments for corporations and acting as the "judges." They apply the law of TPP and World Bank and UN arbitration rules – U.S. laws and courts are cast aside even though U.S. laws are being attacked.
When an investor-state tribunal rules in favor of the foreign investor, the government must hand the corporation an amount of taxpayer money decided by the tribunal. Tribunals have already ordered governments to pay over $440 million in investor-state cases under existing U.S. agreements. This includes payments over toxic bans, land-use policies, water rights, oil contracts, forestry rules and more. There are more than $34 billion in these corporate attack claims awaiting decision right now under U.S. agreements alone. Even when governments win, they often must pay for the tribunal's costs and legal fees, which average $8 million per case. In a threat to our sovereignty and solvency, the TPP would expand the scope of policies that could be attacked. More than 1,000 additional corporations in TPP nations, which own more than 9,200 subsidiaries here, could newly launch ISDS cases against the U.S. government.
Among the outrageous claims foreign firms can make under this system is that a change in government policy undermined their “expected future profits.” It does not matter if the change in law came in response to a new financial crisis or health discovery or environmental catastrophe or that it applies to domestic and foreign firms alike - foreign firms can demand compensation from us taxpayers. Claiming such radical privileges, foreign corporations have launched investor-state cases against a broad array of environmental, energy, consumer health, toxics, water, mining and other non-trade domestic policies that they allege undermine their "expected future profits."
Some of the investor-state attacks now underway are:
- Chevron trying to evade liability for its Ecuadorian Amazon toxic contamination;
- Phillip Morris attacking Australia's cigarette labeling policy;
- Eli Lilly attacking Canada's drug patent policy; and
- European firms attacking Egypt's post-revolution minimum wage increase and
South Africa's post-Apartheid affirmative action law.