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Another Reason to Hate TPP: It Gives Big Content New Tools to Undermine Sane Digital Rights Policies
In previous posts we've covered many of the ways the copyright provisions in the Trans-Pacific Partnership (TPP), a massive trade deal between 12 Pacific countries, could undermine users' rights. But those are just the tip of the iceberg. What may really sink the Titanic is a rather obscure but very dangerous section covering foreign investment.

Like the rest of the TPP, we only know what has been leaked. Based on that, it seems the negotiators are poised to give private corporations new tools to undermine national sovereignty and democratic processes. Specifically, TPP would give multinational companies the power to sue countries over laws that that might diminish the value of their company or cut into their expected future profits.
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The provision that gives them this power is called “investor-state dispute settlement” (or ISDS for short). The policy was originally intended to ensure that investments in developing countries were not illegally expropriated by “rogue” governments, thereby encouraging foreign investment. But what began as a remedy to a specific problem has since been co-opted to serve very different purposes. Under investor-state, if a regulation gets in the way of a foreign investor’s ability to profit from its investment, the investor can sue a country for monetary damages based on both alleged lost profits and “expected future profits.” There are no monetary limits to the potential award.

Apparently a country’s own courts can’t be trusted to administer this kind of lawsuit, so investor-state also requires the creation of a new court. It would be comprised of three private-sector attorneys who take turns being judge and/or corporate advocate.

Even if this kangaroo court ruled in favor of the defendant nation, court costs alone would scare countries from adopting (or enforcing) pro-user policies where they might potentially inhibit investor profits. The investor-state tribunal bills its time by the day and decides for itself how many days to work, so it can rack up as many days of work they want. Given this system, it's then no surprise that current investor-state court costs average about 8 million dollars per case. So even if it wins, the country has to pay those court fees, the lawyer fees, plus compound interest. That’s money that would doubtless be better spent elsewhere.

[Story Continues Here]

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Comment Preferences

  •  Tip Jar (12+ / 0-)

    Atheistic Determinist and Contemplative Contrarian.

    by ShockandAwed on Fri Oct 25, 2013 at 02:14:33 PM PDT

  •  investor protections have been in several FTAs (1+ / 0-)
    Recommended by:

    by now.  have there been any IP suits?

    •  (apart from the recent Eli Lily arbitration (0+ / 0-)


      •  ... (2+ / 0-)
        Recommended by:
        blueoasis, codairem

        A new report (pdf) from the UN Conference for Trade and Development (UNCTAD), pointed out to us by IP Watch, reveals just how widespread the use of investor-state dispute resolution mechanisms has already become:

            The Issues Note reveals that 62 new cases were initiated in 2012, which constitutes the highest number of known ISDS [investor-state dispute settlement] claims ever filed in one year and confirms that foreign investors are increasingly resorting to investor-State arbitration.


            By the end of 2012, the total number of known cases reached 518, and the total number of countries that have responded to one or more ISDS claims increased to 95. The overall number of concluded cases reached 244. Out of these, approximately 42 per cent were decided in favour of the State and 31 per cent in favour of the investor. Approximately 27 per cent of the cases were settled.

        Although that suggests that states are winning more often than investors, the cost of doing so is a drain on public finances, and ignores cases that never come to arbitration because governments simply give in. And when states lose, the fines can be enormous: the report notes that 2012 saw the highest monetary award in the history of investor-state dispute resolution: $1.77 billion to Occidental, in a dispute with Ecuador.

        Here's Public Citizen's summary of perhaps the most blatant attempt to assert corporate sovereignty so far:

            In one of the Chevron v. Ecuador cases, a three-person tribunal last year ordered Ecuador's government to interfere in the operations of its independent court system on behalf of Chevron by suspending enforcement of a historic $18 billion judgment against the oil corporation for mass contamination of the Amazonian rain forest. The ruling against Chevron, rendered by Ecuador's courts, was the result of 18 years of litigation in both the U.S. and Ecuadorian legal systems. Ecuador had explained to the panel that compliance with any order to suspend enforcement of the ruling would violate the separation of powers enshrined in the country’s Constitution -- as in the United States, Ecuador's executive branch is constitutionally prohibited from interfering with the independent judiciary. Undeterred, the tribunal proceeded to order Ecuador "to take all measures at its disposal to suspend or cause to be suspended the enforcement or recognition within and without Ecuador of any judgment [against Chevron]."

        As that notes, the tribunal was essentially telling the Ecuadorean government to place Chevron above the country's constitution -- an extraordinary state of affairs: imagine if the US government were ordered to do the same. Unfortunately, Ecuador's situation is one that is likely to become more common if the corporate sovereignty sections of TPP and TAFTA/TTIP make it into the final versions of those treaties.

        TPP and TAFTA/TTIP, as well as Canada's bilateral treaty with Europe, CETA, all have ISDS clauses in them -- at least as far we know, given the obsessive secrecy that surrounds their negotiation. Here's the key issue in this latest case involving Canada:

            Quebec has yet to decide whether fracking -- a process to inject fluid into the ground at a high pressure in order to fracture shale rocks to release natural gas inside -- can be conducted safely under the St. Lawrence.

            "If a government is not even allowed to take a time out to study the impact without having to compensate a corporation, it puts a tremendous chill on a governments' ability to regulate in the public interest," said Ilana Solomon, director of the Sierra Club's trade program in Washington, D.C.

        That is, the company concerned is trying to pressure Quebec to lift its moratorium before the latter has had a chance to evaluate all the scientific evidence on fracking, and come to a reasoned decision. That seems to be a typical effect where ISDS clauses are in operation: with the threat of huge claims hanging over them, governments often choose to capitulate and give companies what they want, rather than risk losing before the secretive tribunals that are used to adjudicate such ISDS cases.

        ISDS Clauses do matter. Their use against IP is in it's infancy.

        Atheistic Determinist and Contemplative Contrarian.

        by ShockandAwed on Fri Oct 25, 2013 at 03:20:47 PM PDT

        [ Parent ]

  •  is Big Data like Big Content except in binary? (3+ / 0-)
    Recommended by:
    ShockandAwed, codairem, Chinton

    Warning - some snark may be above‽ (-9.50; -7.03)‽ eState4Column5©2013 "I’m not the strapping young Muslim socialist that I used to be" - Barack Obama 04/27/2013

    by annieli on Fri Oct 25, 2013 at 03:23:17 PM PDT

  •  Actually, this is a bit misleading... (0+ / 0-)

    After thorough reading of the leaked portions of the TPP, the biggest portion that this applies to is actually Malaysia which has many state owned business from utilities to precious metals.

    In regards to the internet portion, it's really ugly, and one has to understand how copyright works currently in the USA, and essentially pushes the current DMCA we have here onto these other countries, which overrides Chile and New Zealands already more progressive models. Otherwise, the language in the IP and Copyright portions are identical to what we currently have here between ACTA and DMCA.

    It is every person's obligation to put back into the world at least the equivalent of what they takes out of it. - Albert Einstein (edited for modern times to include everyone by me!)

    by LeftieIndie on Fri Oct 25, 2013 at 03:57:59 PM PDT

    •  nothing in TPP is new---all of it is already found (0+ / 0-)

      in some or all of the 20 other regional free-trade treaties the US already has had since 1996, and/or in the WTO treaty.

      Many of the Kossacks here who are fighting TPP seem not to realize that it is a REGIONAL treaty, not a global one, and that all it does is applies the same basic principles to the Pacific region (minus China) as are already found in the other regional treaties. And it is being fast-tracked and negotiated in secret---just like all the others were. There's nothing new in it--everything in it already appears in either the WTO treaty or the other regional trade agreements.

      (Well, it also spells out some new things like the quota for shoe imports and such, but I suspect those aren't the portions that anyone is objecting to---the parts that people are objecting to are already found in all or most of the other treaties.)

      I've been fighting against free-trade agreements since 1995, and it pains me greatly to see that so many of us here who are opposing TPP don't really understand what the treaty is, what it does, or how it fits into the 21 other free-trade treaties the US has already been a party to since 1996.

      •  Some people don't know (0+ / 0-)

        I think many others do know, but they also know that you're more likely to oppose TPP if you think there's something new and dangerous coming down the pike, not just some stuff that's been around for many years.  The diarist obviously knew it wasn't new as he cited all kinds of cases, but decided to say it was new anyway.  Just politics, I suppose.

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