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
A leaked text revealed that TPP would include and even expand the controversial system of extreme corporate privileges called the "investor-state" regime. Under this system, the TPP would elevate individual foreign corporations to equal status with the sovereign governments signing the deal - allowing them to privately enforce this public treaty. The rules empower foreign corporations to skirt domestic laws and courts and directly challenge governments' health, environmental and other public interest policies before extrajudicial tribunals authorized to order unlimited amounts of compensation with taxpayer dollars.
The World Bank and UN tribunals that decide such cases are comprised of three corporate lawyers, unaccountable to any electorate, who rotate between suing governments for corporations and acting as the "judges." Tribunals are not bound by precedent and there is no appeal mechanism.
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 $3.5 billion in investor-state cases under existing U.S. agreements. This includes payments over toxic bans, land-use policies, forestry rules and more. More than $14.7 billion remain in pending claims 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. The TPP would expand the scope of policies that could be attacked.
The proposed TPP foreign investor privileges would provide foreign firms greater "rights" than those afforded to domestic firms. This includes a "right" to not have expectations frustrated by a change in government policy. 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.