I want to take this from a different angle from the Liberty Victoria perspective. I’m mostly going to concentrate on rights. I want to contrast the rights of capital versus human rights and labour rights, which are coming through these agreements. And also pick up on something Pat Ranald said, that what these agreements are doing, particularly the bilaterals, are instituting American social policy, and more importantly American law, globally. For example, in America, they hold property rights as sacrosanct. In other parts of the world, even in Europe, when they determine cases they have at one end property rights and at the other end the public interest. They make a judgement on whether a country’s laws have impacted on the property rights of an investor by looking at this continuum.
In the US there is no such thing as public interest when you are looking at property rights. For example, a case in America where a state brought in laws to regulate bakery workers, to say that they should only work 40 hours, the court said, ‘no’, bringing in a regulation like that interferes with the property rights of employers. If you are going to bring in a law like that you have to compensate employers. The state soon rescinded that law. But nothing like that would ever occur in Australia. It would be seen as public interest and they would see that such a law would not interfere with an employer’s property rights.
Now under the expropriation provisions of bilateral agreements, we are going to get those interpretations of property rights and other interpretations based on American law.
But I want to start with a different perspective and to contrast the different notions of sovereignty that come up in international instruments, particularly the trade agreements as against Human Rights or ILO Conventions. Late in 2004, our Government supported the Bush Administration in an action before the US Supreme Court. This received no publicity here whatsoever. It was over a US law called the Alien Tort Claims Act. This is the only Act in the world where you can get multinational corporations before the courts on labour rights or human rights abuses.
Human Rights and Labour lawyers in the US have had Shell in Nigeria, Coke in Colombia, Unocal in Burma plus about another 10 multinationals in the courts under this law for violation of labour and human rights conventions. The Bush Administration wanted the US Supreme Court to limit the jurisdiction of that Act so that these cases could not be brought any more. That move was supported by the Australian Government, and I will read out part of the Australian Government submission and contrast that with trade agreements.
The Australian Government submission said: “Recognising the broad ranging implications of these expansive appellate readings of the Alien Tort Claims Act, US lawyers have been assembling foreign plaintiffs to make class action claims in federal courts for foreign activities concerning ‘human rights violations’ in foreign countries. These claims often implicate activities of governments in their own territories [remember that because that is a sovereignty issue] and thus can involve difficult political, diplomatic and legal issues. The reported cases include allegations of terrorist acts, apartheid wrongs, wartime reparation claims, child labour violations, forced labour violations, cultural genocide, murder, denial of rights to union activity, imprisonment and torture, racial discrimination, degrading treatment and loss of enjoyment of political rights.
Now what the Australian Government was arguing in this case was that these cases should not be allowed to be brought to the courts. First of all, they interfere with global trade and investment. Secondly they interfere with a country’s sovereignty, and thirdly that no external law should be able to limit a country’s ability to regulate in the interests of its own citizens. So that was in 2004, and that is the attitude to what can be really called egregious human rights violations.
The ruling came out not so long a go, and the court did limit the jurisdiction of that Act, but did not quite close the door in the way that the Bush Administration and the Howard Government wanted. Now, by contrast, if you look at WTO Agreements or more so the bilateral agreements which are far more expansive than WTO agreements, the governments, and particularly our Government does not seem to be concerned about our issues of sovereignty. Now, 50 years after the declaration of the International Convention on Human Rights and 80 years after the creation of the ILO none of these things are enforceable. All we can do, other than that Alien Tort Claim Act, is embarrass governments, and get rulings in the International Court of Justice - but even the International Court of Justice decisions are not enforceable.
So you contrast that with bilateral agreements and WTO agreements. Under those agreements states are expected to remove regulatory restraints on the movement of capital, goods and services, to divest themselves of publicly owned enterprises, to privatise or denationalise real or financial assets and to facilitate the supply of certain goods and services by contracting out and commercialisation. State institutions are expected to sub-ordinate political considerations to economic ones, and despite the rhetoric, it’s not a move towards deregulation, which they are always talking about or about the abstention of the state. It’s actually activism in another direction and that’s namely the creation of conditions, laws, regulations, rules to facilitate the smooth operation of the market, of capital globally.
The rules insulate key aspects of the economy from the influence of politicians or the mass of citizens by imposing internally and externally binding constraints on the conduct of fiscal, monetary, trade and investment policies. So you hear nothing about sovereignty issues at all. In fact they are signing on to things that constrain their ability to make decisions in the public interest, in a way that’s quite unbelievable. Yet any human rights instrument that may impact upon our Government, not that you can enforce, but even makes a negative ruling, immediately the Government comes out and there is a full-on attack. Even to the extent that Downer, at one stage last year told the UN that it would end up with a bloody nose if it didn’t stick its business out of Australian affairs.
So the attitudes to the two; there’s a huge contrast between them. These trade agreement rules bind governments over long periods of time to constitution like rules designed to protect the private property of individuals and firms against discriminatory treatment or takings of investment interests. (I want to come back to that.) They are like constitutions because they are binding, because they can take it to a tribunal or a court. They can enforce these rules in a way that we cant over labour abuses or human rights abuses. What they are effectively doing is writing a Bill of Rights. A global Bill of Rights for capital - and the Bill of Rights for people just cant be enforced at all.
With bilateral agreements, they are interfering more and more with political sovereignty in a way that some of the WTO ones don’t. Just recently I was looking at the Singapore and Chile ones. With each negotiation the rules binding governments are getting more and more expansive and here’s an example under these ones. You will remember the Asian economic crisis. During that crisis Mahatiar put in a cap to stop capital from fleeing out of the country. Since that time in the US/Singapore, US/Chile agreements they have put in a new provision in the investment chapters. It says that they now contain clauses banning countries from imposing currency controls during an economic or financial crisis. The use of capital controls, that’s temporary freezes on currency trading, is subject to investor stake claims by banks and others for compensation. Even under NAFTA it wasn’t that expansive. But what it is now, as Ted and Pat have pointed out, it’s not just about trade in goods. It even goes beyond services, to the degree that if your country gets into a financial crisis you are not allowed to bring in laws to try and ameliorate the impact of that crisis, in the interest of your own citizens.
So these are interfering with a countries ability to act in the national interest in a way that is far beyond the original intent of these trade agreements. Initially these agreements had huge problems, particularly in the way that, say, they will have intellectual property rights, which I believe are a protectionist mechanism for capital. But when Unions or activists insist on human rights or labour rights provisions being in there they get immediately clambered with the protectionist label. So they’ve always had problems but each one that’s negotiated is going further. If you read the recent speeches of Zolic, the US trade representative, since September 11 its explicit in his speeches that anyone who now has a bilateral agreement with the US has not just to accept those economic conditions under bilateral’s, but they have to accept American foreign policy. So they are even interfering beyond the economic to other measures.
Getting back to enforcing the rights of humans and of labour. Under the investment provisions of these agreements investors are allowed to sue host governments, it’s called expropriation, for regulations, administrative decisions, even judicial decisions. And that’s unheard of that an external body can actually challenge a judicial decision in a country and that external body can actually overturn a constitutional court of a country. That’s completely in conflict with the idea of the rule of law. But they can do that under the investment provisions.