The new Global Corporate Law
How transnational corporations have succeeded in replacing rule of law with Global Corporate law, using a multitude of norms, treaties and agreements - most recently the Transatlantic Trade & Investment Partnership - to secure their rights to profit above human rights.
The global economic crisis that unfolded in 2009 was significant not just for the questions it raised over the power of big finance, but also for the attention it drew to other crises facing our planet – notably food, ecology and care work. What has been given less attention is the national and international legal systems that underpin these crises and the way legislation has been skewed in favour of capital and transnational corporations.
The reinterpretation of legislation in favour of capital and transnational corporations and the regulatory asymmetry this causes vis-à-vis the rights of the unprotected majorities are undermining the rule of law, the separation of powers and the very essence of democracy. Now more than ever in history, law is being used to benefit political and economic elites. At the international level, this allows corporations to operate free from regulatory controls and with a high level of impunity.
A recent example is the case of transnational oil corporation Chevron, which conditioned signing the investment agreement with YPF on Argentina’s Vaca Muerta oil field upon the adoption of reforms to federal and provincial laws. Chevron’s proposals were set out in a series of “strictly confidential” docu- ments, which focused on the maximum amount of taxes the provinces could charge the company, the duration and characteristics of the concessions, and tax stability for the oil company and its subsidiaries. The proposals favouring the oil corporation were written into the new law on hydrocarbons, which the Argentine Congress approved on 30 October 2013 in order to “promote investments in exploration”.
This is a very clear example of how corporations intervene in regulations designed to control them, which is leading to a profound crisis of democratic institutions and popular sovereignty, the violation of the sep- aration of powers and the rule of law, and the contractualisation of legal norms and economic relations. Finally, it also places the rights of corporations above the rights of people through the privatisation of legal norms and institutions. Transnational corporations approve legal norms “de facto”, and states (in this case, the Argentine state) dedicate themselves to upholding the logic of the market and guaranteeing unlimited profits for corporations.
This essay was published in the State of Power 2015.