SLEEPING WITH THE ENEMY

Dr Jane Kelsey is a professor of law at the University of Auckland, a prominent critic of globalisation and an informed commentator on international trade agreements and treaties.  During the Waitangi Tribunal’s recent hearing of the water claim, I found her evidence compelling because it gave a clearer picture of the risks in these treaties to national sovereignty.  This is all part of the broader Washington Consensus; more on that in a later column.

International trade treaties and agreements give investors very broad rights to challenge many rules in countries where they have invested; especially those that could affect their cash flow.  International law firms have joined the gravy train and, predictably, there’s been a massive jump in the numbers and types of such disputes brought by investors against governments.  In the past decade alone there have been 48 of them at a cost of $100 million each. 

In particular, large investors and their legal teams are aggressively targeting government regulations and policies which are supposed to protect things like public health and environmental conservation.  How that works is simple and cynical. 

If a government with strong regulations is in a trade agreement that includes a government with weak regulations, then investors can sue the strong-rule government for making them meet (and pay for) a higher standard than the weak-rule government; because it disadvantages them in trading terms. 

New Zealand’s government has bi-lateral agreements with those of China, India, Korea, Australia and Malaysia.  It’s also in multilateral agreements like TPPA and the WTO/Doha Round.  As well as being able to play this government off against its trade agreement partners in a dispute, investors will also be able to pick which of a number of international tribunals they take their dispute to.  These tribunals all differ widely and are unpredictable in their outcomes. Some are held in secret without proper due process, none of them follow logical precedents set by previous tribunals, and it’s impossible to know what view a particular tribunal might take.  Finally, there is no appeal process against any of them.

Often as not investors aren’t so much interested in actually pursuing their dispute as they are in using it to influence government policies, and, in a number of cases, governments have chosen to settle rather than go through what could be a long and very expensive dispute resolution process.  In essence they have surrendered their people’s sovereignty to international corporates, law firms and tribunals whose interests, backed up by the military might of the United States, now supersede those of the citizens of their countries. 

One definition of war is a condition of active antagonism or contention: a concerted effort or campaign to combat or put an end to something considered injurious.  What Dr Kelsey described in the Waitangi Tribunal last week amply matches that definition.   

We are engaged in international trade warfare.  But, instead of protecting its citizens from the enemy, New Zealand’s government is sleeping with it.