Corporate Culture: Free Trade and 21st Century Bondage

www.aftinet.org

The Australian government is currently participating in trade negotiations led by the US and involving
12 countries in the Pacific. Called the ‘Trans-Pacific Partnership Agreement,’ the scope of the deal
goes beyond what many of us understand as a ‘free trade’ agreement, and could threaten the ability
of our governments to regulate in the interests of the public and the environment.

The United States wishes to include a proposal which would allow foreign companies to sue
governments for damages if they adopt laws or policies that could ‘harm’ their investment, even if
the laws or policies are in the public interest. The proposal, called ‘Investor-State Dispute Settlement,’
or ISDS, would essentially give foreign corporations power to  sue governments over  laws affecting
essential areas of public interest at local, state and national level.

If approved, ISDS would reduce the ability of governments to regulate the activities of foreign
companies even if the companies’ activities have a negative impact on health and the environment.
This would prevent governments from responding to community concerns and introducing
legislation in the interests of the public.

The 1994 North American Free Trade Agreement, involving the US, Canada and Mexico, does include ISDS. There have been over 60 cases of governments being sued, many because they implemented legislation to protect public health or the environment.

Currently, the US Lone Pine energy company is suing the provincial government of Quebec for $250 million because it suspended shale gas mining pending an environmental study. The Quebec government acted in response to pressure from the community to examine health and environmental impacts.

In a similar way, farmers and members of communities in NSW and Victoria influenced their state governments to also adopt moratoriums to examine the impact of coal seam gas mining on land use and the environment. Following an independent study in NSW, a number of new regulations were adopted restricting coal seam gas activity close to residential suburbs and rural industries.

Corporations have claimed they will lose billions because of these new rules. If Australia was subject to ISDS rules, foreign companies could sue state governments for damages over this regulation.