The TPP – A Sampling of What to Expect

OpEdNews Op Eds 5/26/2015 at 12:01:47

By Dennis Kaiser (about the author) Permalink (Page 1 of 2 pages)
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Since the signing of various “trade agreements” such as NAFTA, CAFTA, and other FTA’s the investor-state-tribunals have ordered taxpayers to pay $444.1 Million to foreign investors in addition to paying half of the costs of the arbitrations as well as attorney charges in those not only won by the government (there were actually 22 cases in which the government prevailed), but of course those in which the tribunal ruled against the government. In most of these the environment, the economy, the health of the people, land use, public transportation, or other laws and/or regulations set by the government are superceded

While there were approximately 50 claims in the early decade of these agreements in the years 2011- 2014 there have been over 50 cases each year brought to these investor state tribunals where private entities bring suit against public governments -, giving the private firms the same sovereign rights as the government, thus creating a “privatized judicial system”.

While we do not know what the new agreements, such as The Trans Pacific Partnership (TPP) and those that will follow, contain as they are being kept secret from not only the public, but legislators who will be asked to vote on them. Lately, legislators have been accorded the right to read the TPP, but under very strict conditions, such as no notes can leave the room and they cannot discuss any of the document or let the people know what it contains. Because of the secrecy one can only reasonably surmise it strengthens the private firm’s ability to rape the taxpayers even more.

One can only assume these new investor state agreements will not only doom democracy by stripping nations of their sovereign rights, but will put multi-national corporations and financial institutions in control of laws and regulations. Has anyone wondered why our legislators haven’t taken raising the minimum wage? With the TPP multi-nationals will supercede those and pay whatever they feel is necessary to be competitive globally and the investor-state-tribunal will make the award. The people, our government, will have no recourse.

While these tribunals have awarded $441.1 Million under the agreements already in place, the Public Citizen Organization reports there are over $34 BILLION still pending. Some of those are listed and a brief description given below:

Mesa Power Group, a U.S.-based corporation owned by Texas oil magnate T. Boone Pickens, challenged a green jobs program of the government of Ontario. The provincial government’s green jobs program incentivizes clean energy production by paying preferential rates to solar and wind power generators that source their equipment locally. In its first two years, the program created 20,000 jobs, attracted $27 billion in private investment, and contracted 4,600 megawatts of renewable energy.24 Mesa Power Group claimed that the successful program had prohibitive rules, taking particular issue with the buy local stipulations. The corporation alleged that such requirements violate its NAFTA-enshrined rights to most favored nation treatment, national treatment, and fair and equitable treatment.


Pending, asking $746 Million

Mercer International, a US-based wood pulp company, challenged Canadian energy sector regulations.26 At issue was the treatment that Mercer’s subsidiary, the Celgar Pulp Mill, received from the provincial government of British Columbia and BC Hydro, a public provincial power company. Mercer alleged that the public entities unfairly discriminated against Celgar by offering lower input electricity rates to its BC-based competitors. Celgar, like other mills, both purchases and generates electricity. Mercer claimed that while domestic mills were permitted to sell their electricity at high rates and buy at low rates, provincial regulation prevented Celgar from doing so. The company alleged violations of national treatment, most favored nation treatment, the minimum standard of treatment, and provisions concerning monopolies and state enterprises.27 Nearly 75 percent of the $250 million claim is for projected future lost profits.28

Pending, asking $246 Million

Windstream Energy, a U.S.-based energy corporation, challenged Canada over the company’s inability to participate in Ontario’s green energy program — the same one targeted by Mesa Power Group (above). The corporation had contracted with Ontario’s provincial government to provide energy generated by an offshore wind farm located in Lake Ontario. But in February 2011, the provincial government declared a moratorium on offshore wind production, stating that time was needed to study the environmental impacts of the relatively new energy source (currently there are only a few freshwater offshore wind farms in the world).

Windstream’s notice alleged that the moratorium “effectively annulled the existing regulatory framework” and thus contravened Canada’s NAFTA obligations concerning “fair and equitable treatment,” expropriation, and discrimination. Pending, asking $457 Million

Indiana-based Eli Lilly, the fifth-largest U.S. pharmaceutical corporation, challenged Canada’s patent standards after Canadian courts invalidated the company’s patents for Strattera and Zyprexa, drugs used to treat attention deficit hyperactivity disorder (ADHD), schizophrenia and bipolar disorder. Canadian federal courts ruled that Eli Lilly had failed to demonstrate or soundly predict that the drugs would provide the benefits that the company promised when applying for the patents’ monopoly protection rights. The resulting invalidations of the patents paved the way for Canadian drug producers to produce less expensive, generic versions of the drugs. Eli Lilly’s notice argued that Canada’s entire legal basis for determining a patent’s validity — that a pharmaceutical corporation should be required to verify its promises of a drug’s utility in order to obtain a patent — is “arbitrary, unfair, unjust, and discriminatory.” The company alleged that Canada’s legal standard violated the NAFTA guarantee of a “minimum standard of treatment” for foreign investors and resulted in a NAFTA-prohibited expropriation. Pending, asking $481 Million

Lone Pine Resources, a U.S.-based corporation, challenged Quebec’s moratorium on the controversial practice of hydraulic fracturing, or fracking, for natural gas. The provincial government declared the moratorium in 2011 so as to conduct an environmental impact assessment of the extraction method widely accused of leaching chemicals and gases into groundwater and the air. Lone Pine Resources, a Delaware-headquartered gas and oil exploration and production company, had plans and permits to engage in fracking on over 30,000 acres of land directly beneath the St. Lawrence River. Lone Pine argued that the fracking moratorium nullified those permits. According to Lone Pine, such policymaking contravened NAFTA’s protections against expropriation and for “fair and equitable treatment.” Pending, asking $241 Million

U.S. investors who own a logging company in Canada notified Canada that they intend to launch a NAFTA case against the government for not extending to their company an Ontario tax break reserved for Canadian firms that practice sustainable harvesting. The U.S. investors argued that their exclusion from the tax break is not because they are logging unsustainably, but because their company does not meet the criteria under Ontario’s law that more than half of the shareholders must be Canadian to qualify for the tax break. The investors allege that this condition violates the national treatment and “minimum standard of treatment” protections that NAFTA provides their company. Pending, asking $12 Million

U.S. oil corporation Mobil (of ExxonMobil) is launching another NAFTA challenge against the Canada-Newfoundland Offshore Petroleum Board’s Guidelines for Research and Development Expenditures, which require oil extraction firms to support R&D in Canada’s poorest provinces. An earlier NAFTA case that Mobil and Murphy Oil launched against the same policy resulted in a $13 million ruling against Canada (see above). The tribunal in that case decided the corporations could continue bringing cases against Canada for the continued requirement to support R&D. Mobil is now taking advantage of that allowance.

KBR, a large U.S. defense and energy contractor, challenged Mexican court rulings that annulled another investor-state tribunal’s ruling in a contractual dispute between KBR and Pemex, Mexico’s state-owned oil company. The underlying dispute resulted in a ruling from an International Chamber of Commerce (ICC) tribunal that ordered Pemex to pay more than $300 million to KBR. KBR filed suit in U.S. courts to enforce the ICC ruling, while Pemex challenged it in Mexican courts. After Mexican courts annulled the ICC ruling, KBR launched a NAFTA case arguing that the annulment violated Mexico’s national treatment, most favored nation, minimum standard of treatment and expropriation obligations. While pursuing the NAFTA claim, KBR is simultaneously pursuing full enforcement of the ICC ruling in U.S. courts, and has reportedly initiated a third case in Luxembourg. Pending, asking $110 Million

A group of U.S. investors allege that Mexican officials have interfered with their business by forcing the closure of Mexican casinos in which they have investments, following an act of arson in one of the casinos. The investors acknowledge that their own business partner in Mexico is pursuing a case in Mexican courts to invalidate their permit to operate. They suggest that they may seek to also challenge the outcome of that case in their NAFTA claim. The investors claim violation of NAFTA’s national treatment, minimum standard of treatment, most-favored-nation treatment, and expropriation obligations. Pending, asking $100 Million

A group of U.S. investors claimed that the Costa Rican government has not sufficiently or promptly paid them for beachfront property that the government plans to convert into a nature reserve. Just before CAFTA took effect, Costa Rica’s Supreme Court ordered government authorities to begin the process of purchasing the investors’ beachfront property to convert it into a national park. The investors argue that subsequent delays and inadequate payment for the land violate Costa Rica’s CAFTA obligations concerning national treatment, most favored nation treatment, expropriation and a minimum standard of treatment. Pending, asking $49 Million

Corona Materials, a U.S. mining company, claimed that the Dominican Republic violated CAFTA by delaying and then denying environmental approval for an aggregate materials mine. In deeming the mine “not environmentally feasible,” the government cited concern for the prospective impact on nearby water sources. Corona argues that the denial of environmental approval for the mine violated the company’s CAFTA-protected rights to a minimum standard of treatment and national treatment, and constituted a CAFTA-prohibited expropriation of its investment. Pending, asking $100 Million

Three individuals of dual U.S.-Dominican Republic nationality threatened to launch a CAFTA claim against the Dominican Republic for denying environmental approval for their plans to expand a gated resort. In its decision to not authorize the development expansion, the Ministry of Environment explained that the land in question fell within the bounds of a protected national park. The developers allege that the government drew the park’s boundaries in a discriminatory manner. They claim violations of CAFTA’s national treatment, most favored nation, minimum standard of treatment, and expropriation obligations. Pending, asking $20 Million

Pacific Rim Mining Corp., a Canadian-based corporation that sought to establish a massive gold mine using water-intensive cyanide ore processing in El Salvador, claimed that the government violated CAFTA by not issuing a permit for the mine. This proposed project, to be located in the basin of El Salvador’s largest river, as well as applications filed by various companies for 28 other gold and silver mines, generated a major national debate about the health and environmental implications of mining in El Salvador, a densely populated country with limited water resources.35 Leaders of El Salvador’s major political parties, the Catholic Church and a large civil society network expressed concerns.

In April 2008, one month after El Salvador’s president announced that he would not grant mining permits until the legislature undertook an in-depth environmental study of the proposed mining projects, a new U.S.-based Pacific Rim subsidiary sent a letter to the Salvadoran government to threaten a CAFTA claim.37 The corporation had incorporated the subsidiary — Pac Rim Cayman LLC — just five months earlier.38 Pacific Rim never completed the feasibility study necessary to obtain an exploitation permit for its mine and in July 2008 ceased exploratory drilling.39 Later that year, the company launched its CAFTA challenge, claiming that the Salvadoran government’s decision to not grant the mining permit violated CAFTA’s rules on expropriation and national treatment, among others.40

In a CAFTA tribunal’s 2012 jurisdictional ruling, El Salvador lost on three out of four counts. The tribunal allowed Pac Rim to continue pursuing its claims at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID) under a domestic investment law with provisions similar to CAFTA. Pending, asking $200 Million


The Renco Group, a corporation owned by Ira Rennert, one of the wealthiest people in the United States, claimed that the Peruvian government violated the U.S.-Peru FTA by not granting the company an extension on its overdue commitment to clean up environmental contamination. Doe Run Peru, Renco’s Peruvian subsidiary, failed to meet its environmental clean-up commitments under the terms of a 1997 privatization of one of the world’s most polluted sites: a metal smelter in La Oroya, Peru. The Peruvian government granted two extensions of the 2007 date by which Doe Run was to have built a sulfur oxide treatment facility — a commitment that the corporation repeatedly failed to fulfill. In 2007 and 2008, Doe Run was challenged in class action lawsuits in Missouri courts, claiming damages to children for toxic emissions from the smelter since its acquisition by Renco .52 In 2010, the company launched an $800 million investor-state claim against Peru under the FTA. The company claimed a violation of fair and equitable treatment, blamed Peru for not granting a third extension to comply with its unfulfilled 1997 environmental commitments, and stated that Peru, not Renco, should have assumed liability for the Missouri cases.

Some analysts believe that Renco is using the investor-state claim to derail the Missouri-based lawsuit seeking compensation for La Oroya’s children. Renco had previously tried three times to remove the case to federal court from the Missouri courts, where the jury pool was likely to be skeptical of the company after its highly publicized pollution in Missouri. Renco had failed each time. But one week after launching its investor-state claim, Renco tried a fourth time to remove the case to federal courts and succeeded. The same judge that had denied the previous requests now granted it, citing the FTA claim as the reason. Pending, asking $800 Million

A group of U.S. investors claimed that the government of Panama violated the FTA by not allowing them to purchase contested beachfront property and by not halting acts of harassment against the investors. The government denied the investors’ bid for the beachfront property on the basis that the property was too close to the Costa Rica border to be sold to foreigners under Panamanian law — a claim that the investors refuted. The investors alleged that an “illegal” road was then constructed on other property that they had purchased, and that local authorities were complicit in subsequent acts of intimidation against the investors. They asserted violations of Panama FTA provisions regarding national treatment, expropriation, fair and equitable treatment, and protection and security. Pending, asking $98.5 Million

As one can see, many of these make “Buy American” (or local) illegal thus potentially hurting the local job market and economy. A claim brought out by Wikileaks and told as not true by Obama. Obama simply says, “Trust Me”.

They will also strip taxpayer dollars in order to pay legal fees, even though the people will not be represented in these tribunal hearings, they will be required to pay even though they may prevail.
In view of the power corporations will have one might ask, “What is the need for Congress”? After all once these agreements go into effect these corporations won’t have a need for them either and will “fire” them by not having to bribe them into making laws fit their needs. These agreements will do that, in spades. The people haven’t had their representation for over three decades and will have even less need for them now as any laws or “safe guards” they may wish to impose can easily be overruled as they will be deemed violating the petitioner’s right to a “minimum standard of treatment” and the taxpayer will be forced to pay they deem to be their potential loss to future profits.

The “New World Order” has arrived! Obama’s yelling “Trust Me” is the sound of the death knell of democracy.

Dennis Kaiser is an author and consultant focusing on individual rights. As a US citizen Dennis is deeply concerned over how our nation has fallen from being productive and full of hope to one where that hope is being stripped from the majority as (more…)

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