Out of the Woods

It's even worse than you thought

In an earlier blog I wrote about the suit of indigenous people in Ecuador against Texaco and Chevron. After 18 years they had won their court case against the oil companies who had destroyed their land while drilling for oil in the Amazon jungle. But then it turned out that a trade agreement between the US and Ecuador contained a clause that such court cases could be reviewed by a panel of three lawyers. In the case of the Ecuadorian indigenous people the panel decided that the oil companies did not have to pay anything. Three North American lawyers could invalidate the decision of Ecuadorian courts.
Now a column in Common Dreams explains the whole situation in more detail. It is even worse than we thought.

The United States has signed “bilateral investment treaties” with a lot of different countries. So have many other countries. Under those treaties global corporations are not only able to evade the court decisions in foreign countries, but they are allowed to sue other governments for losses sustained due to government regulations. Thus “last year, Ecuador was forced to pay fines of $78 million to the United States oil company Chevron, which claims that the country's efforts to protect the Amazon from pollution have negatively affected business.” Not only was the decision of Ecuadorian courts nullified, but the Ecuadorian government had to pay Chevron even though it was the oil company that had seriously polluted stretches of the Amazon.

These bilateral investment treaties exist not only between the United States and other countries. Germany is in danger of being sued by a Swedish company that manufactures nuclear power plants. After the Fukushima nuclear disaster, the Germans decided to phase out their nuclear plants. They cancelled contracts for new nuclear installations and now it looksas if they own the Swedish firm “more than €1 billion.”

Foreign investors may challenge, in an international arbitration process, any change in law and policy to protect the environment and public health, to promote social or cultural goals, or to grapple with financial or economic crises. Private global companies are clearly gaining the upper hand against governments who try to protect the environment, such as the government of Ecuador, or protect their citizens against nuclear disaster, such as the German government. Private pursuit of profit is gaining the upper hand over democratically elected governments.

No one voted for the management of these global corporations. But they now have power over elected governments. Corporate totalitarianism is the latest product of the “free” market.