July 5th, 2016 by James Ayre
The foreign oil firm TransCanada has filed a lawsuit against the US government under NAFTA rules, seeking $15 billion in compensation for the rejection of the Keystone XL pipeline project.
To put that in plain language, a foreign corporation is suing the US government for $15 billion (in tax money) because the US government has acted in the best interest of the US and its citizens, rather than in the interests of the foreign corporation. The North American Free Trade Agreement (NAFTA) specifically allows for such suits (meant to protect “foreign investors”) to be arbitrated in private tribunals consisting of only 3 lawyers — who aren’t held accountable to any domestic legal systems. In other words, people who aren’t held accountable to US law.
The suit (filed on June 24) alleges that the US rejection of the Keystone XL pipeline violated NAFTA’s broad rights for foreign investors by thwarting the company’s “expectations.”
TransCanada argued in its filing that the US spent 7 years delaying a final decision on the project with repetitive as well as “arbitrary and contrived” analyses. The filing continued: “None of that technical analysis or legal wrangling was material to the administration’s final decision. Instead, the rejection was symbolic and based merely on the desire to make the US appear strong on climate change, even though the State Department had itself concluded that denial would have no significant impact on the environment.”
The lawsuit, and the opaque arbitration process accompanying it, serves as a prime example of why some are so wary of further trade deals along the lines of NAFTA, such as the proposed Trans-Pacific Partnership. The proposed TPP deal allows for similar such private arbitration processes for corporations.
As Bloomberg notes in its coverage, “TransCanada’s claim could reinvigorate opponents of the proposed Trans-Pacific Partnership and make it even harder for advocates of that 12-nation trade deal to get it ratified by Congress. Like NAFTA, the Trans-Pacific Partnership includes investor-state dispute settlement provisions that allow foreign companies to challenge domestic laws in front of international arbitration panels.”
That means putting more corporations in a position to challenge domestic laws which relate to environmental protections, labor protections, and pollution controls, amongst other things — all privately, out of the public eye and consciousness.
EcoWatch provides some information on the TPP (which Obama was quoted as saying that he was “confident” he’d be able to win ratification of when speaking in Germany back in April): “The TPP would empower thousands of new firms operating in the US, including major polluters, to follow in TransCanada’s footsteps and undermine our critical climate safeguards in private trade tribunals. Today, we have a prime example of how polluter-friendly trade deals threaten our efforts to tackle the climate crisis, spotlighting the need for a new model of trade model that supports rather than undermines climate action.”
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