June 2013: Defending Democracy from a New Attack

Dear Readers,

For two decades the Democracy Center’s work has been based on one fundamental principle: that citizens everywhere in the world have the right to influence the public decisions that impact their lives. That is what real democracy means. In my work with citizen activists across the U.S., Europe, Latin America, Africa and Asia I have seen up close the many threats to that right – armed soldiers in Bolivia, mountains of corporate campaign cash in the U.S., the repression of civil rights in Vietnam, and more.

The Democracy Center has just released a report that documents a new, rising menace to democracy that threatens us all, regardless of country. That threat comes from the growing web of international investment rules used by multinational corporations to undermine and overturn citizen victories on everything from environmental protection to public health. Under that system a Canadian mining company is suing the people of El Salvador for prohibiting the dumping of toxic chemicals into their drinking water. Phillip Morris, the tobacco giant, is suing Uruguay and Australia for adding strict health warnings to cigarette packaging. Germany faces a billion dollar legal assault over introducing a moratorium on nuclear power.

All of this is taking place under a system that is growing year by year and is set to become even more powerful under the proposed Trans Pacific Partnership being negotiated in secret by the Obama administration. Our new report is called Unfair, Unsustainable, and Under the Radar: How Corporations use Global Investment Rules to Undermine a Sustainable Future. Last week I was in New York and spoke about the report and this rising threat with Amy Goodman on Democracy Now. You can watch that interview here. Our publication announcement is below, with links to the report, an accompanying article we just published on AlterNet and other material.

From the demand for clean water to the movement for action on climate change – all of this is threatened by a system designed to put global corporations in the driver’s seat. I hope that you will take time to look at our new report and to pass on the announcement below via email, Facebook, Twitter, and old-fashioned word-of mouth. It is democracy that is under fire and we need to rise to its defense.

Jim Shultz

The Democracy Center

 

Announcing: New Report from the Democracy Center

 


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A new paper from the Democracy Center sheds an urgent public light on the system of international investment rules and arbitration tribunals that is being used by corporations to undermine citizen and government action on a range of urgent social and environmental issues.

 

“With this new report, the Democracy Center brings us conclusive evidence and analysis that show the inherent incompatibility between sustainable development and international investment rules. It is a must read for social and environmental justice campaigners.”

Cecilia Olivet, Project Coordinator, the Transnational Institute 

Unfair

Citizens and governments everywhere are grappling with the challenge of the 21stcentury: how to allow people to lift themselves out of poverty while respecting the natural boundaries of the earth. However, at the same time multinational corporations are spinning a web of power that threatens our ability to take even basic actions toward sustainable development. This is being done by means of thousands of little-known trade and investment agreements that corporations are using to compromise countries’ sovereign right to regulate in the public good.

“Trade and investment agreements allow these corporations to be above our national sovereignty and even our country’s constitution”

– Francisco Pineda (El Salvador),
Goldman Prize recipient 2011

Unsustainable

The paper shows how the system is being used to punish El Salvador for blocking poisonous gold mining, against Germany for stopping nuclear power, and to attack public health regulations for the tobacco industry in Uruguay – along with many other similar cases. And we flag the next target for the system: government ability to regulate ‘fracking’.

“Current international investment rules encourage governments to attract foreign investment by any means necessary – regardless of the costs for long-term sustainability and democracy.”

– Sarah Anderson,
Global Economy Project Director,
Institute for Policy Studies

Under the Radar

Unfortunately, wide knowledge of this system and how it works doesn’t really exist beyond a small collection of lawyers and advocates. Our paper aims to help put a much wider public spotlight on this corporate power grab while there is still time to fight it.

“Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”

– Juan Fernández-Armesto,
arbitrator from Spain

Find out more

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  • Share news of this report on Facebook
  • Tweet your followers about the report

Get in Touch

If you are looking for an interview, would be interested in an article on this topic, or would like to discuss any aspect of this issue further with us, please contact Maddy Ryle or Thomas Mc Donagh

About Us

The Democracy Center is well-versed in this system. We helped beat Bechtel when it used the World Bank’s trade tribunal to sue Bolivia for $50 million after the Cochabamba Water Revolt. Supporting citizen action against corporate power has been a cornerstone of our work for many years and together with IPS Washington we now coordinate the Network for Justice in Global Investment to analyse and challenge this latest weapon being deployed by corporations against communities and the planet.

Further Reading

Our partners at the Institute for Policy Studies in Washington recently published an updated version of their ‘Mining for Profits’ report which goes into further detail about how mining, oil and gas corporations are using the system of investment rules and arbitration tribunals to subvert government attempts to regulate these industries.

Take a look at ‘Profiting from Injustice’, the new report from our colleagues at the Transnational Institute and the Corporate Europe Observatory, which reveals the small club of international law firms, arbitrators and financial speculators fuelling an investment arbitration boom that is costing taxpayers billions of dollars and preventing legislation in the public interest.

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6 Responses to June 2013: Defending Democracy from a New Attack

  1. gold price says:

    A newly updated Institute for Policy Studies report, “ Mining for Profits in International Tribunals ,” documents the increased use of these rights by transnational corporations involved in the oil, mining, and gas industries.

  2. Today, just as communities in El Salvador and Peru have taken up the battle to protect their natural resources, a whole global movement is emerging to rethink the relationship between economic development and social and environmental well-being, and is pushing governments to take policy action in that urgent direction. This important shift, however, is in direct conflict with the interests of transnational corporations hard-wired to maximize short-term profit and pass on the environmental and social costs of their operations to others. The Democracy Center’s report puts a spotlight on how global corporations are using the investment rules system to undermine the policies essential to sustainable development and the democratic process essential to such policies.

  3. They are all examples of global corporations using the arbitration tribunals of a burgeoning system of often secret international trade-investment agreements – some 4,000 so far – to “resist and attack sustainable development efforts” and human rights, according to a new report released by The Democracy Center, Unfair, Unsustainable And Under The Radar .

  4. Today, just as communities in El Salvador and Peru have taken up the battle to protect their natural resources, a whole global movement is emerging to rethink the relationship between economic development and social and environmental well-being, and is pushing governments to take policy action in that urgent direction. This important shift, however, is in direct conflict with the interests of transnational corporations hard-wired to maximize short-term profit and pass on the environmental and social costs of their operations to others. The Democracy Center’s report puts a spotlight on how global corporations are using the investment rules system to undermine the policies essential to sustainable development and the democratic process essential to such policies.

  5. silver price says:

    Today, just as communities in El Salvador and Peru have taken up the battle to protect their natural resources, a whole global movement is emerging to rethink the relationship between economic development and social and environmental well-being, and is pushing governments to take policy action in that urgent direction. This important shift, however, is in direct conflict with the interests of transnational corporations hard-wired to maximize short-term profit and pass on the environmental and social costs of their operations to others. The Democracy Center’s report puts a spotlight on how global corporations are using the investment rules system to undermine the policies essential to sustainable development and the democratic process essential to such policies.

  6. Some countries have realised the injustices and inconsistencies of international investment arbitration and are trying to abandon the system. In spring 2011, the Australian government announced that it would no longer include investor-state dispute settlement provisions in its trade agreements. Bolivia, Ecuador and Venezuela have terminated several BITs and have withdrawn from ICSID, sending a clear political message that they refuse to co-operate in the future. Argentina, which has been swamped with investor claims related to emergency legislation in the context of its 2001-2002 economic crisis, refuses to pay arbitration awards. South Africa has announced that it will not renew old investment treaties due to expire. And India is reported to have decided not to include investor-state dispute provisions in future free trade agreements 36 .