In case you didn’t notice, the new blockbuster Star Wars film, The Force Awakens, ends pretty much the same way the first one did when it came out in the summer of 1977. The bad guys build a Death Star machine that can kill whole planets, the good guys fight back with pluck and grit, and, just in the nick of time, destroy the machine.
The political saga of the Keystone XL pipeline has followed essentially the same plot. TransCanada (playing the role of the Empire) sought to build a metal tunnel from Alberta to the Gulf Coast to transport oil from the Canadian tar sands. The pipeline, not unlike a Death Star, threatened the planet because it would have amped up carbon emissions and quickened the pace of global climate change. In the Keystone saga, pluck and grit came in the form of protests, lawsuits, arrests, and the encirclement of the White House—the equivalent of a Jedi counter-attack.
Those efforts paid off last November, when President Barack Obama announced that he was denying the required U.S. authorization for the pipeline to be built—the political equivalent of blowing up the Death Star’s thermal oscillator.
But as any good Star Wars fan knows, the Empire strikes back. True to form, TransCanada filed a $15 billion legal action against the U.S. government on January 6. The company is demanding that U.S. taxpayers compensate it for the profits it had hoped to make from a pipeline it won’t get to build.
How can the company do this? TransCanada is making use of a legal weapon so powerful that even Darth Vader would be envious—international trade rules.
Here is how the system known as “Investor State Dispute Settlement” works. Tucked neatly away inside the North American Free Trade Agreement (NAFTA) and more than 90 percent of the thousands of other international trade agreements in force around the world are provisions that allow foreign corporations to sue governments whenever a change in policy interferes with the company’s profit-making plans. Companies are allowed to drag governments before closed-door tribunals operated by the World Bank, the International Chamber of Commerce, and others. Companies can force compensation not only for the funds they actually invested, but for many, many times more than that for supposed “lost profits.”
Who uses these secretive tribunals? The San Francisco-based engineering giant Bechtel sued Bolivia, the poorest country in South America, after the Cochabamba Water Revolt of 2000. This was a massive public uprising against the privatization of the city’s water and subsequent rate hikes for residents. After protests pushed Bolivia’s leaders to reverse the privatization, Bechtel sued Bolivia for $50 million, although it had invested just $1 million in the project.
In the end, Bechtel was forced to drop its case for a token settlement of less than $1, but that took years of protests and international organizing (in which my organization was involved) to achieve, and cost the Bolivian treasury millions of dollars in legal fees.
Many nations, including Mexico, Canada, the Dominican Republic, and Bolivia have been forced to pay vast sums to foreign companies that used these international investment tribunals.
In this most recent case, TransCanada is suing under the provisions of NAFTA and demanding an amount that would cover annual community college tuition costs for nearly five million U.S. students. In other words, $15 billion is a huge sum of money.
For years, the reason governments have given for granting multinational corporations such enormous legal power was that the companies needed it to protect against seizure of their assets. TransCanada’s claim, however, is not about U.S. soldiers showing up with guns at a pipeline and declaring ownership; it’s about a reasonable political choice to protect the planet’s climate. In the company’s view, however, making a choice they don’t like constitutes a theft.
As a representative of TransCanada recently wrote in the Wall Street Journal, “When the U.S. government signed NAFTA, it committed to provide Canadian investors with various protections against unfair, inequitable, and uncompensated expropriatory and discriminatory U.S. regulatory actions.” In other words, the Obama administration “expropriated” TransCanada’s hopes of making billions off a project that was also a weapon aimed directly at the planet’s future.
International investment rules like these undermine democracy and the right of nations to freely choose their futures, which makes it all the more a mystery why the Obama Administration wants to supersize the system with the 12-nation Trans-Pacific Partnership (TPP). The TPP, which would cover nearly 40 percent of global GDP, essentially copies the investment rules under which TransCanada is suing the United States, a new legal Death Star run amok.
TransCanada’s Keystone XL case should be a warning. The United States is no more immune than Bolivia and El Salvador to multibillion-dollar raids on its treasury any time a change in public policy runs afoul of a company’s plan for profits. Cases like these have even become a commodity market of their own, drawing investors who help finance the legal costs for a share of the big potential payouts. The Obama administration and other boosters of the TPP like to boast about exports and the like, but they never directly answer one simple question: Why it is in the interest of any nation to give foreign companies the right to sue it for lost profits in secretive international tribunals?
As Yoda would say, “Beware of the dark side.” Or at least don’t hand the dark side special legal rights. The battle over the Keystone XL may have had a happy ending in its first episode, but global trade rules have ensured we’ll see a sequel.
Just as the processes of colonization devastated territories and peoples in the search for gold, silver and labour, today’s multinational corporations offer powerful echoes of the same. They come not on horseback but by jet, speaking the language of economic growth and prosperity but touting a business model that is destructive in many of the same ways.
The Corporate Conquistadors report shows how extractive industries cause damage on the ground, drive climate change in the atmosphere – and yet are able to push their own agenda through influence over climate policy-making processes.
Multinational corporations are relentlessly expanding their operations into ever more vulnerable and remote regions of the planet. As they do so they both drive the climate crisis and exacerbate its impacts. They bear responsibility for a global crisis which affects us all, and they bring social end environmental destruction to the local communities where they operate. A further legacy of their oil drilling, industrial mining and mega hydro-electric projects is the erosion of those communities’ resilience just as the impacts of climate change begin to take effect.
These same multinationals are also the biggest barrier to meaningful action on climate change, blocking urgently needed regulations and genuine transformational solutions.
Despite the amassed evidence of the great damage they are causing, corporations are gaining increasing access to climate policy-making spaces, both at national and international level, allowing them to put forward their own so-called ‘solutions’. But their market-based proposals are not aimed at tackling the crisis at all. Rather, they allow the biggest polluters to line their pockets with public money while continuing business as usual. Denouncing the connections between corporations and our decision makers, and de-legitimising the corporate seat at the policy-setting table, is crucial if we are to chart a different course.
Published to coincide with the UN’s climate negotiations in Lima, Peru in December 2014, Corporate Conquistadors is a collaboration with Corporate Europe Obervatory and the Transnational Institute which puts a spotlight on activities in the Andean region by three specific multinational corporations:
In the case of Repsol, the Spanish fossil fuels giant, we see how the relentless pursuit of new gas and oil reserves in Peru takes direct aim at the region’s indigenous territories and forests, leaving social destruction and environmental
decimation in its wake. At the same time, Repsol’s complex web of national and international industry lobby groups has allowed it to cash in on carbon markets while blocking efforts to cut emissions at source.
Another Peruvian case is that of Glencore-Xstrata in Espinar, Cusco. Political manipulation has allowed the Swiss-based mining and resources conglomerate to expand its copper mining operations in the region. Scarce water resources, already stressed by climate change, are being contaminated with impunity. At the same time, its network of lobby groups has successfully promoted corporate-friendly policies which avoid any challenge to its dirty business model.
These emblematic cases – for their combination of environmental and social destruction and covert political manipulation at national, regional and international level – offer a chilling yet urgent look into the realities of the zero-sum game between climate change and corporate power.
In this short video report contributors and a representative of one of the affected communities featured in the report launch Corporate Conquistadors at the People’s Assembly during UNFCCC COP20 in Lima, December 2014:
Here Pascoe Sabido of Corporate Europe Observatory, who worked with us on the report, speaks in Lima with Amy Goodman of Democracy Now! about the issues raised in its pages:
Thomas Mc Donagh and Philippa de Boissière report from Lima as the Democracy Center launches its new report: Climate Conquistadors – The Many Ways Multinationals Both Drive and Profit from Climate Destruction.
After spending many months focusing on how to make the most strategic use of the arrival of the UN climate negotiations to Latin America in 2014, the Democracy Center team finally arrived into Lima, Peru last Friday.
Our arrival coincided with two pieces of tragic news from the region.
Reports came in of the murders of indigenous environmental activists defending their communities and natural resources both in Ecuador and Peru (Peru is now the fourth most dangerous country in the world for environmental activists).
The Peruvian government, meanwhile, continues its push to ‘reactivate the Peruvian economy’ by cutting back environmental regulations for extractives projects.
The connection between the resistance of communities in Latin America to extractive industry expansion and the national and international policy spaces that facilitate this expansion has been a major focus of our work recently.
It was sad to see such a vivid demonstration of the same dynamics we’ve observed during our research over the last few months playing out on the ground in the region just as the COP20 has been getting started.
Although the media has covered the deaths of the indigenous community leaders, the headlines for the last week have mostly been dominated by the inflated promises of national governments seeking to maintain ‘Business As Usual’ in the official negotiation spaces.
You really have to push past the barrage of spin and PR to hear the voices of those on the frontlines of the struggle for climate justice. But once you do, what you hear are strong calls for restrictions on extractive projects such as large-scale mining and oil and gas expansion; demands for full and effective participation of affected communities in decisions that affect their territories; calls for accountability for the abuses by the corporations that profit from these destructive industries; and inspiring stories of communities bravely resisting the encroachment of climate change-causing industries in to their territories.
These are also the stories of the communities featured in our new ‘Corporate Conquistadors‘ report.
In the southeastern Peruvian Amazon, indigenous communities have been making some of these same calls for justice and accountability for many years. As the negotiations take place within their nation’s capital, these communities are witnessing first hand the consequences of the expansion of the fossil fuel industry into ever more vulnerable and remote regions of our planet.
Communities in the Espinar region of the southern Peruvian Andes are also on the frontlines. In a region that is already witnessing its glaciers melting at accelerated speeds, toxic chemicals used in mining processes are destroying their remaining fresh water sources, putting the very survival of these communities in question.
The struggle of farmers and fisherfolk of the Colombian province of Huila is also representative of many of these same dynamics. Community members from across seven municipalities are taking on a planned large-scale hydro electric dam, drawing on a mix of direct action tactics and legal challenges to force the corporations responsible out of the region.
Although the communities at the frontline of these projects struggle to have their voices heard in national and international policy spaces, the same cannot be said for the foreign corporations profiting from such destruction.
We have teamed up with Corporate Europe Observatory and the Transnational Institute to use the COP20 as an opportunity to shine an urgent light on how three European multinational corporations – emblematic of corporate misconduct the world over – avoid accountability for the social and environmental destruction that they cause in Latin America. This new report aims to show how corporate activity, across three sectors, is exacerbating the climate crisis while the multinationals responsible manipulate political decision making spaces and profit from a lack of real progress on climate change.
How does Glencore-Xtrata steer international policy spaces towards its interests? While the Swiss-based conglomerate causes severe human rights abuses in southern Peru, what are the mechanisms it uses to ensure no decisions are made that would affect its existing destructive business model?
While Repsol likes to present itself as a “global company looking out for the well-being of all people”, what it doesn’t let on is that it is investing in future fossil fuel reserves at the highest rate in the industry. Its insatiable thirst for oil and gas is resulting in expansion into ever more remote and vulnerable parts of our planet. In its wake it is leaving destruction of indigenous peoples’ territories and Amazon rainforest. How does this dirty energy giant make sure it has a seat at the top table when we set our climate policies?
The third of these corporate giants featured in Corporate Conquistadors – the report we are launching today – also presents a clean and responsible image to the world while causing human rights abuses and blocking progress on the climate crisis. Italian-based Enel-Endesa, through its Colombian subsidiary Emgesa, is using a lucrative big hydroelectric project called ‘El Quimbo’ to provide a “green” veneer to its operations and to allow it to earn carbon credits for its European dirty energy business. Far from being “carbon neutral”, these mega-hydroelectric projects are high in emissions and provide cheap energy to ramp up fossil fuel extraction elsewhere. How does Enel-Endesa’s international web of political influence ensure that these false solutions to the climate crisis are included in international climate policy?
The lines have clearly been drawn in the international climate movement. Frontline communities and activists all over the world can see more clearly than ever that the interests of these corporate giants and those of climate justice are in direct conflict.
However, if we are to begin to take them on, we need a much clearer understanding of the ways in which they accumulate and exercise power. By exposing and denouncing the connections between corporations and our decision makers we can begin to delegitimize their seat at the negotiating table on climate change policy. If we can do this while lifting up the voices of marginalized frontline communities, we have a much stronger chance of broadening and strengthening international solidarity.
What we’re doing here in Lima is just the beginning of a longer-term process to connect struggles on the frontlines with efforts to keep dirty industry away from our policy makers. On Thursday we will be running a two-hour planning session with community members within the People’s Summit to think through how to build the stronger links of solidarity that are needed to form the basis for international action.
We hope to ramp up this strategy in the next year, with the aim of building citizen power toward, and beyond, COP21 in Paris. This way, we can start to tip the balance of power away from the vested corporate interests that currently have a stranglehold on international climate policy.
Read more about the report and download Corporate Conquistadors: The Many Ways Multinationals Both Drive and Profit from Climate Change
See/hear/read Amy Goodman interviewing Pascoe Sabido of Corporate Europe Observatory about the report for Democracy Now!
Last Friday saw the start of Reclaim Power: Global Month of Action on Energy. The month runs from 11th October until the 11th November. Here Lucy Patterson of Push Europe offers readers an overview of the month’s aims and the context in which it takes place.
The climate movement is diverse. You only have to look at the range of battles fought by those on the front line to understand why. Every day, individuals and communities resist pipelines, open-pit mines, Arctic drills, oil spills, test wells, shale gas, palm-oil plantations, power stations, mega-dams and tar sands. The assaults inflicted are hugely varied, and so are the communities, and their responses. Such diversity lends strength and flexibility to the movement.
However, unlike the globalized, multinational corporations they face, these individuals and communities are, of course, localized. It’s easy to feel powerless when there are only a few dozen of you, and you’re up against an oil company with a multi-billion dollar turnover. Reclaim Power: Global Month of Action on Energy aims to build on the commonalities which bind the countless thousands of us standing up to dirty energy and demanding an alternative energy system.
All communities on the frontline of fossil fuel extraction defend their homes or indigenous land from destruction by corporate giants. All fight a system that is designed to maximize profit, not to meet needs. All demand an alternative energy future to that which is being forced upon them. These commonalities have helped to define the key demands of the month of action
1. A ban on all new dirty energy projects
This should be a no-brainer. As Greenpeace’s Kumi Naidoo put it: “If our governments, now that the science is clear, invest one more cent in new fossil fuel projects, that is an investment in the deaths of our children and future generations.”
2. An end to government subsidies and public handouts to dirty energy companies
Globally, our governments spend in excess of one trillion US dollars every year on handouts to fossil fuel companies – companies such as Exxon Mobil, whose net annual income exceeds the GDP of over a hundred countries.
3. An end to excessive energy consumption by corporations and global elites
Our planet is finite, yet our illogical global economic system assumes that we have limitless natural resources to consume and profit from year on year. Not only does this mean that we are on course for catastrophe, but the profit-based nature of our energy consumption (as opposed to needs-based) means that only a select few actually benefit from fossil fuels.
4. The redirection and mobilization of public finance to ensure universal access to energy, and to ensure the complete shift to decentralized community renewable energy systems as quickly as possible.
Our energy system is based on corporate gain and the enclosure of the commons. Subsidies and public funds should be redirected from overbearing dirty energy companies to community-owned, sustainable energy projects. Only then will our energy system be democratic, clean, universal and just.
It need not be said that countless millions already suffer, directly or indirectly, thedevastating effects of climate change. It is common knowledge that the overwhelming majority of those suffering are those who have contributed the very least to climate change: the poorest citizens of the world, those even without access to electricity, or cooking fuel, are those who are bearing the brunt of the changes. A new report confirms that the tropics will experience unprecedented climate change many years before the rest of the world – and “as the world’s population is disproportionately concentrated in the tropics, unprecedented climate conditions will impact a larger percentage of the world’s population”– the very same sector of the world’s population which is the least responsible for the problem.
This problem is the symptom of the dysfunctional energy system in place. During Reclaim Power month, the struggle for climate justice will go directly to the root of the disorder, and will demand a huge shift in power from the polluters to the people – at a moment that could prove to be pivotal in the struggle for climate justice. The month will build towards the UN climate talks in Warsaw, where civil society will demand that the most developed nations – those who are most responsible for, and most capable of, dramatic emissions reductions – act now to prevent the worst of these effects. Until now, progress within the global political community has been shamefully inadequate. We cannot afford to let the pressure drop.
We invite all individuals, groups and communities to either join one of the many actions taking place around the globe this month, or to start your own action (no action is too small!). Explore the website for information and resources, and get in touch if you have further questions. Add your voice to the thousands around the world demanding that we act now to change our energy system, not our climate.
The author, Lucy Patterson, is a Coordinator for Push Europe, the campaigns network of the European Youth Climate Network.