Activities 2012 Trade & Investment

Profiting from Injustice

The boom in investment arbitration.

For several years TNI has focused on ‘investment protection’ regimes that give corporations the right to sue states for actions that hit their profits, even where the measures are taken to defend public interests in poor countries. In 2012, TNI and the Corporate Europe Observatory co-published Profiting from Injustice, a landmark report exposing the small clique of international law firms, arbitrators and financial speculators fuelling a boom in the investment arbitration industry. Profiting from Injustice broke new ground in challenging the idea that arbitrators and law firms are simply neutral functionaries of the regimes, showing that they are, in fact, highly active players. Law firms seek every opportunity to bring cases against governments and the whole industry has a vested interest in defending the status quo. The report accuses law firms of ‘ambulance chasing’ by actively soliciting lawsuits against governments in crisis, such as that of Greece.

The report has been successful in putting the issue of investment arbitration on the agenda of civil society and social movements, especially in challenging the notion of its ‘neutrality’. Significantly, it has had a much wider impact, attracting the attention of the media and policymakers (particularly in Latin America) as well as investors and law firms themselves. A leading arbitration industry journal Kluwer Arbitration, for example, ran a guest blog post by TNI. Some 15,900 people accessed the publications and videos in 2012, and an estimated further 114,000 were reached through Twitter.

The report also profiled prominent cases such as the cigarette company Philip Morris suing the governments of Australia and Uruguay under bilateral investment treaties over laws requiring large health warning labels on cigarette packets. TNI has been involved in supporting campaigns to challenge Philip Morris in Uruguay together with REDES, the local Friends of the Earth chapter. These cases and more were reproduced in the more popular educational pamphlet Dangerous Weapons, co-published by TNI, and in a short animated video, ‘The dark side of investment agreements’, which you can watch at bit.ly/tnidarkside.

The longer-term campaign goal is for governments to begin to remove arbitration clauses from their trade treaties. Some governments, such as those of Australia, Bolivia, Ecuador and South Africa have started to move in this direction. South Africa, for example, gave advance notice it would not be renewing its bilateral investment treaties. Many governments, however, are locked into treaties for many more years. Others face threats from more powerful governments if they seek to end their treaties.

TNI’s work on corporate impunity and the role played by the current international investment regime provides an important framework for related work to reverse privatisations (see public services, page 14) and land concessions (see agrarian justice, page 26). It is also an important contribution to our research and advocacy on challenges related to opening up Burma, including land concessions to Chinese rubber investors for opium-substitution projects there (see peace and conflict, page 36).

Opposing the EU-Colombia free trade agreement

TNI is a key member of a coalition opposing the EU-Colombia Free Trade Agreement (FTA), supporting Colombian trade unionists, international union federations and civil society groups that have come out against it on human rights grounds. In 2012, TNI drew up a report ‘Dossier Colombia’ (bit.ly/tnicolombia) mapping the possible impacts of the FTA on Colombia’s mining, dairy and palm oil sectors in particular. It focused on labour conditions, environmental impacts and the risks that indigenous people could be driven off their land to make way for extraction. TNI also participated in a lobby tour with Colombian trade union representatives, organising some media activities and public debates in Brussels and Amsterdam to expose the current situation in Colombia and the potential negative impacts of ratification of the proposed Free Trade Agreement.

An important achievement by the coalition in 2011 was getting the FTA declared ‘mixed’ – a technical recognition that it was not a purely trade agreement as it included human rights implications. Under the Lisbon Treaty, all EU member states’ parliaments as well as the European Parliament have to ratify the FTA, and by implication it be vetoed by any national parliament. TNI was involved in supporting efforts to lobby the European Parliament to vote against the FTA. Although the effort failed, a substantial minority voted against. The coalition continues to work with national parliamentarians who have still to vote on the Free Trade Agreement.