U.S. must ban investor-state dispute provisions in trade and investment agreements
By Eileen Schuhmann | Presbyterian Hunger Program Staff
Pipes for pipeline construction in Manitoba. Photo by Loozrboy.
Back in November, more than 200 labor, environment and other civil society organizations urged President Biden to “pursue an effective path to exit Investor-State Dispute Settlement (ISDS) by the U.S. and our partners in existing bilateral investment treaties and free trade agreements.”
And U.S. Senators Elizabeth Warren (D-Mass.) and Sheldon Whitehouse (D-R.I.) and Representative Steve Cohen (D-Tenn.) led over 35 lawmakers in sending a letter to U.S. Trade Representative Katherine Tai and Secretary of State Antony Blinken to remove ISDS language from the U.S.’s existing trade and investment agreements.
The ISDS resolution system included in current day trade and investment agreements provides multinational corporations with extraordinary rights to sue governments when they institute policies that may impact their business operations negatively. So, multinational corporations can take governments to international tribunal courts to recoup lost profits, including future profits.
The sums demanded in these lawsuits are often in the billions of dollars. Many of the lawsuits are filed due to the enforcement of environmental regulations. The lawsuits span the globe and the U.S. is not immune to these kinds of lawsuits.
In June 2016, the TransCanada Corporation launched an ISDS case under NAFTA demanding $15 billion in compensation because the corporation’s bid to build the Keystone XL pipeline was rejected by the U.S. government. Indigenous leaders, farmers, ranchers, and other concerned citizens expressed concern that the pipeline would threaten human and environmental health as well as livelihoods.
In the U.S., for example, the majority of uranium and gold companies in operation are foreign owned and many of them are mining on public lands. You can imagine what could happen (and is already happening) if our regulatory tools to protect people and the environment are restricted by trade policy.
Our Joining Hands partners in Peru, Red Uniendo Manos Peru, have witnessed this very phenomenon. In La Oroya, Peru where residents have suffered from lead poisoning by a US investor-owned metallic smelter. The corporation, Renco Group Inc., sued the government of Peru in 2011, under the terms of the U.S.-Peru free trade agreement, for $800 million (expected revenue losses) after the government enforced environmental regulations and the smelter closed down. Fortunately, the compensation was not awarded to Renco Group, Inc.
This system of trade clearly prioritizes the profit of corporations over the rights and well-being of citizens and the environment – undermining democracy – which is why we must work to strip ISDS from all trade agreements, future and past.
PC(USA) policy is clear on this issue. “[The General Assembly of the Presbyterian Church (USA)] demand[s] that all trade agreements incorporate workers’ rights, human rights, food safety, and environmental standards, and that they allow governments and sovereign indigenous peoples to regulate corporations to protect the common good (Minutes, Part I, 2003, p. 618).”
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