ISDS - The big threat to human rights hidden in our trade deals

Posted on March 15, 2019
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Let’s take a break from Brexit, just for a moment, and focus our attention onto three recent legal cases.

Case 1: Egypt has developed rapidly in recent years, but despite this, much of its population lives in poverty and workers’ wages are very low. In response to this, the Egyptian government decides to increase the minimum wage. However, the increase angers a French multinational company called Veolia, because they employ low-skilled Egyptian workers and the policy will increase their wage bill. They therefore challenge the policy by taking the government of Egypt to an international court - something which Egypt is forced to cooperate with as part of their commitments to international law.

Hamburg PortCase 2: The city of Hamburg has a water pollution problem. Large power stations, such as one owned by Swedish energy firm Vattenfall, are polluting the river with their toxic waste. In response to this, and in order to comply with EU environmental legislation, the city authorities introduce new requirements before they will issue permits to companies. However, rather than comply with the requirements, Vattenfall take the German government to court to challenge the policy. The case is settled, and as part of the settlement, Hamburg agrees to drop its environmental requirements and issue the permit to Vattenfall.

Puno Region, PeruCase 3: Canadian mining company Bear Creek wants to mine for metals on land owned by indigenous groups in Peru, despite local opposition and a human rights court’s ruling that it would violate indigenous rights. The Peruvian government tries to refuse them a mining permit, but Bear Creek responds by taking the government to court, and is awarded $18 million in compensation - paid for by the taxpayer.

I expect your reaction to the above cases is one of anger, or perhaps even disbelief. All three stories are, however, true, and none of them would have been possible without ISDS, which stands for ‘Investor-State Dispute Settlement’.

ISDS clauses are included in trade and investment agreements and they allow investors to sue governments for measures which are deemed to harm their profits. As you can imagine, this could impact on a lot of policies that a government may want to introduce - from carbon taxes and pollution controls to minimum wages and gender discrimination laws.

Cases are heard in highly secretive international arbitration courts, and can cost the taxpayer millions in legal fees - even when the governments wins.

Developing countries are particularly affected because they tend to have a greater need to introduce new regulatory frameworks. This means that they are more likely to to introduce new higher minimum wages or better environmental regulation, but find that this comes with a risk of being sued by multinational companies.

As things stand, ISDS is a core part of UK trade policy, and is likely be a component of post-Brexit trade deals with places like the US as well as with developing countries.

However, Brexit also presents an opportunity: it means that the UK is figuring out its own independent trade policy for the first time in forty years, giving rise to a unique opportunity to get rid of ISDS in our trade deals.

This opportunity has led a broad coalition of civil society organisations, including Christians on the Left, to unite behind the Stop ISDS campaign to remove ISDS from UK trade policy

International Trade (Map from CIA archives 1950, Global Production and Trade of Vegetable Tannins)As Christians who care deeply about social justice, we need to take seriously the power imbalances that exist in global trade. These imbalances exist not just between rich and poor countries, but also between powerful corporate interests and our own national government.

If we really believe that God cares deeply about the poor and downtrodden, we need to move beyond charitable acts of aid, and address the system of global trade which is often rigged in favour of the rich and privileged. Sometimes taking the biblical message of justice seriously means taking seriously quirky legal clauses in Free Trade Agreements, such as ISDS.

So what can you do? The first step is to sign this petition against ISDS. With the strength of civil society, churches and individuals behind our campaign, we hope to take the campaign to Parliament, so MPs vote to remove ISDS. The Trade Justice Movement is also running an event in Parliament on Tuesday, to which you can invite your MP.

Ending ISDS would be one small step towards creating a trading system based on fairness and mutual cooperation. It will not only mean developing countries get a better deal in their trade relations with the UK, but also will enable our own government to put our environment and social rights first.

By David Lawrence

This piece was originally published by Christians On The Left and is available at http://www.christiansontheleft...