The Global Fight Against Corporate Rule
As the strategies for asserting investor rights proliferate across the globe, new alternatives are sprouting up, as communities, activists and governments confront the challenge with increasing urgency.
In the 1990s, a conservative Bolivian government that was privatizing its municipal water systems granted the concession for the water system of its fourth-largest city to the US corporation Bechtel. When Bechtel hiked the rates for consumers, tens of thousands rose up in what became known as the “water war.” After Bechtel abandoned the contract as a result of the opposition, it sued Bolivia under a bilateral investment agreement. Following a creative global campaign that included protests outside the company’s San Francisco headquarters and a shaming strategy, Bechtel finally caved, settling the case for a mere $1.
Groups as diverse as the Council of Canadians, MiningWatch Canada, US and Australian unions, Oxfam and the Institute for Policy Studies are attempting to do with Pacific Rim what those activists did with Bechtel. They’ve started a petition drive to pressure Pacific Rim and its parent company, OceanaGold, to “drop the suit,” and they’ve organized several hundred labor and other citizen groups to push the World Bank to sever its ties with the ICSID tribunal.
Meanwhile, Miguel Rivera and his colleagues are trying to build an alternative economy rooted in local enterprises and sustainable farming, as are other groups across El Salvador. One town we visited in the province of Chalatenango had set up a system to deliver clean water to households and had also established a cooperative to process sugar cane, manage a fish hatchery and maintain beehives for honey. The women of this town have organized to plant organic corn and beans collectively, and they are producing shampoo, soap and alternative medicines—they’re even running a small massage business.
Several Latin American governments are challenging corporations’ rights to sue them in international tribunals. Brazil has never accepted such rights in any international agreement. Bolivia, Venezuela and Ecuador have withdrawn from the ICSID tribunal and are rethinking their bilateral and multilateral investment deals. In an important development, Ecuador hosted these governments and several others last April to discuss an alternative to such agreements. Twelve governments are now on record supporting the creation of a regional mechanism “to ensure fair and balanced rules when settling disputes between corporations and States,” while laying out a framework for continuing the negotiations and bringing in other governments.
South Africa is terminating its bilateral investment agreements and establishing a new investment law that allows foreign corporations to bring such claims only to domestic courts rather than international tribunals. India is conducting a review of its treaties in the face of several corporate lawsuits. Australia refused to include these corporate rights in the 2005 Australia-US Free Trade Agreement, and so far it has not agreed to subject itself to them in the secretive negotiations surrounding the Trans-Pacific Partnership agreement. Recently leaked documents suggest that several of these governments are attempting to at least scale back investors’ rights in the TPP trade deal.
The diverse set of groups that fought NAFTA two decades ago have remained united through the Citizens Trade Campaign, which is trying to stop the fast-track legislation for the TPP and the TTIP. Opponents have gained significant traction by raising questions about the corporate interests behind the proposed agreements. So too on the question of secrecy: in The Washington Post and elsewhere, Public Citizen, Friends of the Earth and others have stressed that 600 corporate advisers have had access to the text of the TPP agreement, while the public and members of Congress do not.
These fights are critical. If the momentum of corporate investment rules can be slowed or halted, the power of global corporations would be significantly curtailed. No one should expect that the hundreds of corporate rules written and strengthened over the course of decades can be dismantled overnight. But rules protecting investors’ rights are a key strategic front where progress is possible. A victory in the David versus Goliath battle between El Salvador and Pacific Rim would be huge—both symbolically and substantively. It would help shift the momentum back toward the rights of people and the environment they inhabit. It would also, we hope, lift some of the sadness that appears every day in the eyes of people like Miguel Rivera and Carmen Ananayo.
Read Next: John Nichols on “A ‘Fast Track’ to Less Democracy and More Economic Dislocation.”