The Belgian state is currently being sued by the second largest Chinese insurer, Ping An, before an international tribunal under the World Trade Organization (WTO), the ICSID. The reason? When Belgium intervened in 2009 to save Fortis, which was threatening to go bankrupt, Ping An saw the value of its shares (5% of the capital) plummet. The company is therefore attacking to try to recover its losses, which it estimates at 2.8 billion euros.
Smoking causes cancer, this is now an indisputable fact. Many countries are therefore implementing prevention policies, such as placing public health messages on cigarette packages, as Australia and Uruguay have done. But the tobacco companies seem to consider this as an obstacle to their commercial freedom: Philipp Morris has attacked these two countries, again at the ICSID for Uruguay and at another tribunal dependent on the UN(1) for Australia.
Last year, the Fukushima disaster reminded the whole world that nuclear power remains an industry where any « accident » has intolerable and, on the scale of a human life, definitive consequences. Germany has therefore decided to leave. What about the private companies that operated the plants, RWE, E.ON and the Swedish Vattenfall? Judging that the planned pace deprived them of billions of euros in profits, they all took Germany to the country’s Constitutional Court, demanding 8 billion euros in compensation for RWE and 3.7 billion euros for Vatenfall.
Companies refusing to assume the risks associated with their activity and attacking states taking measures in the public interest? A practice in full expansion: we went from 38 cases recorded in 1996 to 450 in 2011. This is explained by the multiplication of free trade agreements between states: more than 3000 today and which contain more and more so-called « investor-state » clauses allowing the former to sue the latter as soon as their « investments » are harmed or threatened. But this battlefield is also a lucrative industry: our recently published report, « Profiting from Injustice(2)The book, « Investment Arbitration », examines in detail for the first time the so-called « investment arbitration » industry, in particular the law firms, « arbitrators » and financial speculators who feed off the current explosion of such legal proceedings. An explosion that they maintain insofar as, very often, these same people advise the States during the negotiations of the free trade agreements. A surprising finding of the report is that there is a very small group of highly influential « arbitrators » in the industry: only 15 lawyers (almost all from North America and Europe) have been involved in 55% of known investment arbitration decisions to date. Another conclusion is that the system largely favors corporations, openly questioning the validity of the « justice » that this system is supposed to produce.
If the system is so unfair and biased in favor of corporations, what are states going to do in this mess? Some, like South Africa and Australia, are now openly asking the question. But others do not ask this question: the European Union (and its member states) has signed hundreds of such agreements, is currently negotiating one with Canada and India and is preparing to negotiate one this spring with the USA(3), with considerable stakes(4). Trade at the service of general prosperity? It is reasonable to doubt this: CEO is currently suing the Commission for discrimination because the Commission, in negotiating the free trade agreement with India, has largely included business lobbies such as Business Europe in the process, sending them numerous documents and information on the progress of the negotiations, but has refused to disclose these documents to CEO who requested them for information purposes(5). So much for the Commission’s sense of priorities.
Speaking of which, do you remember John Dalli, who I mentioned in my previous column? This former Commissioner for Health and Consumers was forced to resign by Barroso last October on suspicion of corruption, but doubts are mounting that he may have been the victim of a manoeuvre orchestrated by the tobacco lobbies, which reproached him for his determination(6) within the framework of a directive currently under consideration by Parliament. The Commission is therefore now under fire for its somewhat too close, and somewhat too discreet, relationship with the tobacco industry(7). However, this did not prevent it, a few weeks ago, from appointing to its Ethics Committee Michel Petite, former legal director of the Commission, who has become a lawyer and whose employer, the law firm Clifford Chance, has as a client… Philip Morris. The decision has caused quite a scandal in Brussels, but the Commission, right in its arrogance and corporatist reflexes, believes that there is no problem. The Parliament, which was nevertheless moved by the shadowy areas of the Dalli affair, is walking on eggshells, fearing that a little too much activism could trigger a scandal that, beyond its control, would push Barroso and with him the entire Commission to resign… A not very responsible maneuver in times of crisis, we hear. But, after all, Belgium escaped the first wave of austerity thanks to its lack of government: wouldn’t that be inspiring?
It is indeed necessary to recall that not only the generalized austerity policies are aggravating the crisis, but that the lack of democratic control over the current developments of the EU, which defends and imposes these policies, has assumed absolutely worrying proportions. The context: the EU, trapped by the euro, is trying to free itself from the grip of the financial markets by building a government for this monetary zone which did not have one. But, because of the pressure from the employers, the dominant ideology in the current European governments and the simple difficulty of deciding on anything at 27, this government has taken the form of purely technical coordination procedures: the work of the experts of the Commission and of the States that implement these procedures (called the European Semester) is not subject to the control of the European Parliament. How long can a political system in which the rights of the legislative branch are trampled on daily for essential acts of government, which are also technically absurd, last?
The next 13 and 14 March, the days of the next European summit of heads of state and government, have been designated by many European social movements as days of action throughout Europe against austerity and the excesses of the EU. Happy New Year.
Martin Pigeon, for the Corporate Europe Observatory (CEO) team
- Il s’agit de la CNUDCI : Commission des Nations unies pour le droit commercial international.
- Profiting from Injustice – How law firms, arbitrators and financiers are fuelling an investment arbitration boom, Corporate Europe Observatory and Transnational Institute, Bruxelles/Amsterdam, November 2012.
- L’UE et les États-Unis pour un accord de libre-échange, Le Figaro, 27 janvier 2013.
- Un point épineux des négociations de l’accord de libre-échange UE-États-Unis semble être la question des subsides agricoles et du «problème» de l’encadrement plus strict dans l’UE des OGM et des pesticides.
- Commission defends privileged access for big business in court, Corporate Europe Observatory, 15 janvier 2013.
- M. Dalli, ancien fumeur, n’avait pas la réputation d’être un farouche ennemi de l’entreprise privée.
- L’UE a par exemple signé la Convention cadre de l’Organisation Mondiale de la Santé pour la lutte antitabac, prévoyant un strict encadrement des rapports entre autorités publiques et lobbyistes du tabac, mais ne l’applique guère.