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The Human Rights Blog of the Leitner Center for International Law and Justice


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How the Trans-Pacific Partnership fails human rights

By Rodrigo Bacus

On Nov. 5, 2015, the Obama administration released the full text of the Trans Pacific Partnership Agreement (TPP), triggering a three-month Congressional review for approval. The TPP was negotiated between Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, Vietnam and the United States, representing around 40 percent of the world economy. The TPP covers a broad range of topics including patents, intellectual property, labor trade, free trade, investments and the environment. Since 2008, the TPP has been negotiated in secret, attended mostly by large corporations and their lawyers, prompting criticism from various groups that were concerned over the effects of the agreement’s provisions. These concerns were exacerbated when WikiLeaks released some draft provisions of the agreement in 2013, confirming many groups’ fears over human rights protections in the agreement. The full 2015 text of the TPP has not made much of an improvement in its rights protection language since 2013, notably lacking any reference to the term “human rights” in any of its chapters. The TPP’s controversial provisions have prompted different rights organizations to actively campaign against the agreement, highlighting various issues relating to labor, the environment and healthcare. What’s worse is that the TPP’s primary enforcement mechanism, which prioritizes the rights of corporations, pulverizes national sovereignty in the interest of profit. Given these provisions, the TPP is deliberately set up to benefit private corporations and the global elite.

INADEQUATE LABOR RIGHTS 

The Office of the United States Trade Representative, among other supporters of TPP, promises that the agreement will “level the playing field” of labor rights and standards. Yet, the actual provisions of the TPP belie modest improvements to labor rights that do not address other important concerns of labor organizations around the world. The TPP does not reference the fundamental conventions of the International Labor Organization (ILO), which protect the right to organize, collective bargaining and equal remuneration, and also prohibit child labor, forced labor and discrimination. The agreement refers only to core labor rights in the ILO Declaration of 1998 and completely omits the core right to equal remuneration (sometimes referred to as “equal pay for men and women”). Lacking a reference to ILO Conventions limits the ability to hold state governments and corporations accountable to labor rights to the TPP’s enforcement mechanism. Failing to include the core right to equal remuneration ignores the impact that globalization and free trade has had on the welfare of women laborers around the world.

Moreover, the TPP allows for derogations from “acceptable conditions of work” if the company’s lowered standards do not otherwise impose forced labor, child labor, discrimination, or restrictions on collective bargaining and unionization. This means that a company does not have to meet minimum wage, work hours or health and safety standards so long as their conditions do not violate core labor rights, except for equal remuneration, and the company is outside of export processing zones or other special zones. As a result, most laborers are more vulnerable to violations of labor rights under the TPP.

Not to mention, the TPP omits reference to or protections related to other contemporary labor issues championed by labor organizations around the world. Many labor organizations have been pushing for the creation of a living wage standard, which takes into account the needs of laborers around the world as it is tied to their welfare and conditions inside and outside of work. The language suggested by labor rights organizations is reflected in the ILO’s Minimum Wage Fixing Recommendation, which makes the goal of the living wage standard “to overcome poverty and to ensure the satisfaction of the needs of all workers and their families.” In comparison, the TPP’s provision of adopting and maintaining “acceptable conditions of work” is weak, omitting the goal of standards of wage and labor conditions to address poverty and limiting the interpretation of “acceptable” to TPP’s self-contained enforcement mechanism.

WEAK ENVIRONMENTAL STANDARDS

There are similar concerns that the TPP’s provisions on environmental preservation are noncommittal, and trump actual obligations by nation-states under multilateral environmental conventions. The TPP does not prohibit the trade of lumber and wildlife products acquired through means that violate environmental laws, obligate countries to abide by trade-related provisions related to conservation or ban certain forms of industries that affect wildlife and environmental conservation. Instead, it asks countries “to combat” illegal trade, “endeavor not to undermine” country obligations to the conservation of fish and other industries and only “promote” the conservation of sharks and other species. The TPP’s language on environmental issues is essentially retrogressive of many multilateral environmental conventions that have been made in the past. Moreover, it only mentions one such multilateral environmental convention, the Convention on International Trade in Endangered Species of Wild Flora and Fauna, binding only the TPP signatories who are also parties to that convention.

Despite a global message from people’s movements fighting against climate change, the TPP makes no mention of “climate change” in its chapter on the environment. What it does have are weak provisions on emissions and the protection of the ozone layer. The low emissions provision only “acknowledges” a “transition” to a low emission economy. The provisions on the ozone layer only control the production, consumption and trade of substances in the Montreal Protocol on Substances that Deplete the Ozone Layer. The Montreal Protocol only lists various fluorocarbon gases known to deplete the ozone layer (CFCs, HCFCs and HFCs); it does not cover a wide range of other products that directly impact climate change, such as fossil fuels. The TPP does give corporations the ability to enforce their expectations of profit on fossil fuel extraction on signatory states through the TPP’s self-contained enforcement mechanism. Looking at analogous trade agreements suggests that such a mechanism will have a chilling and damaging effect on efforts to protect the environment. As an example, El Salvador’s choice to listen to its people and hold off on resource exploration to preserve the environment was met with an arbitration case with damage claims far exceeding the country’s GDP.

INADEQUATE ACCESS TO AND AVAILABILITY OF LIFESAVING MEDICINE 

The TPP’s provisions on intellectual property also raise concerns about healthcare and the access and availability of affordable lifesaving medication. Modeled after the Trade-Related Aspects of Intellectual Property Rights (TRIPS) agreement, the TPP’s patent provisions significantly strengthen the ability of pharmaceutical companies to easily acquire patents over newly developed medication and, in most cases, extend the monopoly period of such medication after the patent is acquired. In return, the TPP includes some “understandings” that merely “affirm” the signatories’ commitment to public health and provides for a limited option for countries to protect public health during health crisis situations. Countries may take other measures, but they are not otherwise obligated and are still subject to the TPP’s self-contained enforcement mechanisms when taking such measures, which will be discussed later.

The concerns related to access and availability of medication under TRIPS and similar agreements (generally known as TRIPS plus agreements) are well-known. The traditional intellectual property rights regime creates two problems when it comes to lifesaving medication. On the one hand, pharmaceutical companies are incentivized purely through sales profits when inventing medication, thus leaving inadequate incentive to research and develop products that save the lives of poor people. In addition, even if a company has created a particular medicine, the monopoly provisions of a traditional intellectual property regime allows the company to raise the drug prices for maximum profit, which makes it difficult, if not impossible, for the poor to afford the available medication. The provisions in the TPP do not address either problem of access to and availability of lifesaving medication, leaving states to address public health crises, such as HIV/AIDS, malaria and Ebola, with whatever methods or devices they had in the past. Yet, such practices could come under attack due to the private enforcement mechanism that is available only for corporations under the TPP, which will be discussed in-depth in the next section.

PROBLEMS WITH THE INVESTOR-STATE DISPUTE MECHANISM IN THE TPP 

The biggest problem with the TPP’s provisions is its overarching enforcement mechanism that uses private arbitration tribunals to resolve disputes between companies and states. Even if the TPP’s provisions on labor, environment, and health care were more rights-respecting, such an enforcement mechanism still highly favors companies over the interests of the signatory governments, let alone the people of those countries. An arbitration tribunal comprises of a panel of arbitrators, usually three individuals, who make decisions over a dispute between two parties. Because the arbitration is private, the parties are often under contract not to disclose the details of the case. However, unlike companies, states have to be accountable to their constituents, particularly relating to their obligations under human rights law. Investor-state arbitrations are still generally private affairs, with some cases released to the public under mounting pressure from people directly affected by them.

Investor-state disputes have also historically favored corporate interests over state interests. When analyzing disputes based on their merits, corporations win a favorable decision 60 percent of the time. Arbitration panels also tend to comprise of a small group of career arbitrators, with an “elite 15” making decisions in 55 percent of investment treaty cases. This essentially creates an oligarchy of arbitrators that favor corporate interests over the state or its people. Meanwhile, the interests of the people, including their human rights and dignity, are generally left out of such a dispute. In particular, under the TPP, states are unable to uphold human rights and other obligations because they are explicitly left out of the TPP’s provisions.

The most egregious issue with investor-state dispute arbitration is that only companies have a right of action against states. States do not have a right of action against companies under the TPP, although it provides for a right of action against other states. This means that while states cannot sue or take action against companies using the TPP’s mechanisms, companies can sue countries over the loss of their expected profits, even if these profits were lost due to regulations or actions in the public’s interest. This is of particular concern for indigenous peoples, who are not adequately protected under the TPP. The TPP does not include the concept of free, prior, and informed consent, one of the foremost protections that indigenous people have to protect and retain their land and resources. With such strong protections for corporations under the TPP enforcement mechanism, corporations will be free to exploit the ancestral lands of indigenous groups for gold, timber and other natural resources.

JUNK THE TPP

Right now, if the TPP is ratified, it will only bind signatory countries. However, more countries will be able to join the TPP once it comes into force. Members of the Asia Pacific Economic Cooperation (APEC), for example, have already expressed optimism about the TPP and their interest in creating a regional market hub after its passage. This means that the TPP has the potential to drastically alter the global economy and conditions for millions of people. The fact that corporations can act with impunity within the TPP framework while benefiting their bottom line tremendously has sparked condemnation and action from human rights organizations in opposition to the agreement. Many are concerned over the effects of TPP in the long term.

In the face of water cannons, tear gas, and other forms of severe state repression, protesters of the APEC Summit, held in the Philippines, protested the summit and the unveiling of the TPP. In the U.S., over 1,500 advocacy groups signed a letter opposing the TPP. And from Malaysia to Peru, protesters have gathered to urge their governments to not sign the treaty. Rights organizations have decried the TPP’s attack on “sovereignty, human rights [and] efforts to create sustainable communities and limit climate change.” Other activists and organizations, such as KARAPATAN, a Philippine human rights organization, have criticized the agreement as imperialist, advancing the expansionist ambitions of the United States over the Asia-Pacific. While the U.S. is expanding militarily through agreements such as the Enhanced Defense Cooperation Agreement in the Philippines, it is achieving economic expansion through the TPP. With much at stake, activists and groups are calling on countries to say #NotoTPP.

Rodrigo Bacus is a Staff Writer for Rights Wire.

The views expressed in this post remain those of the individual author and are not reflective of the official position of the Leitner Center for International Law and Justice, Fordham Law School, Fordham University or any other organization.

Photo credit: GlobalTradeWatch/Creative Commons

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Usurious counterweights: the human rights impact of the Asian Infrastructure Investment Bank

By Chris Beall

By the end of this year, proposals for the new, China-led Asian Infrastructure Investment Bank (AIIB) are expected to take full effect, thereby producing the first real and substantive counterweight to the status quo system of public international development and global finance that the world has ever seen.

TRACING THE HISTORY

To understand the potential impacts of this development requires a general sense of the process that brought us here, and the motivations that have propelled the creation of the AIIB. Oddly enough, that history traces its origins to a small resort town in rural New England, and the world-changing conference held there just over seventy years ago.

In July 1944, Bretton Woods, New Hampshire served as the stage for the United Nations Monetary and Financial Conference, a three-week gathering that hosted some of the world’s most influential economists and financiers. Their task was nothing short of overwhelming: to reformulate the global monetary order, and set regulatory policies that would govern international post-War economics. In this, the Bretton Woods Conference certainly succeeded.

Far from some seedy and exploitative high-finance conspiracy, the goals of the Bretton Woods Conference itself were commendable. Faced with World War II’s destruction of a good portion of the world’s industrialized economies, the plan was to create a system of public lending that would facilitate (mostly European) reconstruction, while also paving the path to an integrated and cooperative financial order that would stymie the underlying economic sources of global world wars.

In this, John Maynard Keynes’ proposals at the Conference are instructive. Negotiating for Great Britain, Keynes proposed the creation of an international lending institution that would essentially incentivize (read: force) the reinvestment of excess capital from surplus-nations into the empty coffers of debtor-nations, thereby allowing robust and largely autonomous sovereign state-spending projects. As the archetypical critic of flawed austerity policies, Keynes’ proposal would have provided developing nations with access to much-needed investment capital, and allowed them some semblance of freedom in crafting development plans curtailed to their individual needs.

Considering the havoc wrecked on the global periphery under British colonialism, it was an ironically unfortunate development that, in this instance, Britain’s position at Bretton Woods no longer carried the roar of the Commonwealth’s lost Victorian hegemony. Instead, a new international hegemon had entered the fray—a nation that had fared quite well economically during the war, and at the time possessed two-thirds of the world’s gold reserves. Not looking to have its own massive surpluses doled out in faraway places, the United States put its foot down. Without getting into the specifics, Keynes’ benevolent international lender was construed as something else entirely: an essentially U.S.-led, U.S.-dictated body of public lending institutions, that would set international lending policies in ways that primarily favored, to no surprise, the investing economy of the United States of America. Thus came about the birth of the International Monetary Fund (IMF) and the World Bank.

Considering the catastrophic progeny of these institutions, one might reasonably wonder why viable public lending alternatives have not cropped up sooner. The essential business model of the Washington Institutions over the past 60 years has been to take desperate, bankrupted nations, and condition life-boat capital injections on the forced implementation of austerity measures, structural adjustment programs and statewide debt-peonage. If nation X, for whatever reason, can’t pay its bills, the solution of the IMF has been to offer rescue packages in exchange for not only repayment with interest, but also economic reform obligations that gut public sectors, clamp down on state spending and eradicate social welfare systems. In terms of the World Bank, development has been blindly premised on returns on investment, with concerns toward something as moralistic as human rights or environmental impact entirely absent.

This logic stems from a very narrow and neoliberal conception of 21st century capitalism: damn your schools, your hospitals and your public works programs, only privatization and the attraction of predatory foreign investment can elevate savage economies unto the enlightened community of fiscally responsible nations. Never mind those real people with a reliance interest on crucial public services, nor those whose income depends on state spending—creative destruction!—it’ll hurt before it gets better. In short, a nation’s health is measured strictly in capital inflows, and without seeming to realize that capital can and does often leave as quick as it comes, nothing attracts the vultures like the carrion of a freshly dead public sector.

Whatever the reason for the lasting power of the Washington Consensus, the impact of a U.S.-tailored IMF and World Bank has not been lost on those very nations and populations that occasionally find themselves helplessly knocking at the counter of the IMF and the World Bank. And so, here at last, comes China’s AIIB.

AN ALTERNATIVE BANK

The proposed logic of the AIIB is to provide a Chinese alternative to the U.S.’s global lending system, the only real global lending system that has existed for the past half a century. For the first time, developing nations in Asia will have an alternative when it comes to taking on public loans. It’s hardly surprising, then, that the United States has tried pressuring our traditional allies from having anything to do with this new institution. So far, these efforts have failed, and I, for one, welcome such failure.

If we’re going to concede to the capitalist logic that espouses the dynamism of capitalism—the only logic that currently holds force in our world—then it seems entirely disingenuous to then deny the capitalist logic that competition will foster more favorable consumer circumstances. In this case, more favorable for nations shopping for loans. If the IMF and the World Bank are forced to compete for the debt of developing nations (at least in Asia, anyway), then I cannot help but feel that those developing nations actually stand to gain from the mere presence of an AIIB. The strong-arm monopoly power of structural adjustment programs and forced austerity measures could finally face a worthy opponent in the AIIB. Indeed, the IMF and the World Bank’s recent self-criticism and subsequent policy shifts seem to support this assertion.

And yet, there’s more to the story. Nobody actually believes that the AIIB is going to be some benevolent people’s lending institution, along the lines of Keynes’ rejected Bretton Woods proposals. Unfortunately, it would take a worldwide catastrophe and a global concentration of priorities on the level of World War II to even narrowly jar open that window again. Instead, the AIIB will be a China-centric international lending body, which will ultimately serve Chinese interests and Chinese dominance in the region. Lest we forget that self-interest is still the crux of the logic of capitalism.

Nor does to say that developing nations will benefit from lender competition and choice inherently mean that international human rights will share in this benefit. Even in the absence of an AIIB, China has shown a pretty cold calculus when it comes to with whom it does business. We might question whether we want some particular regimes to be given unrestricted access to capital and the infrastructure that solidifies their political power. Whatever largely unutilized sway the World Bank might have had in attaching rights-focused strings to their lending packages is about to be rendered moot by a competitor with an outright blind regard for their clients’ conduct in the world. China’s own human rights record, especially in terms of rights-focused development, leaves a lot to be desired. This should worry us, even if we admit that the demonstrated concerns of the United States were always more rhetorical than substantive. Likewise, when it comes to the type of industrial development we would like to see in the world. China is perhaps one of the few modern powers with a more reprehensible global warming attitude than that of the United States. Again, we have reason to lament so much lost potential throughout the World Bank’s monopoly era.

But these concerns, while real and worthy, should not be mistaken for the actual concerns of U.S. efforts to stop the AIIB. Sure, they’re being cited by the Obama administration, who is espousing the high lending standards of our precious World Bank. But in reality, this is just nation-states behaving as nation-states do. The AIIB will increase Chinese influence in Asia, and U.S. influence will diminish there in the process. Perhaps this whole question boils down to whether that development is something you would like or not like to see in the world. Surely, there are arguments to be made for both sides.

BANKING FOR HUMAN RIGHTS?

So, what to take away, then? The recent shifts in the IMF and World Bank’s own policies are certainly positive developments, and regardless of how much these shifts correlate with the AIIB’s founding, they should be celebrated as such. If the Washington Institutions were to follow through with these changes—here, a corrective jubilee would be a great start—perhaps there is some core competency to be carved out in this newly competitive space. Perhaps something along the lines of a truly sustainable development lending institution—the (sigh) Whole Foods of public international finance—is on the way. A quality-focused differentiation strategy could separate Washington from the AIIB: a system where debtors opt for, perhaps even pay slightly more for, lending packages that will grant them diplomatic kudos in exchange for their adherence to the radically different priorities of a reformed Washington Consensus: lending and development that plays particular attention to environmental and human rights concerns. This would allow global development along lines that the US would ostensibly like to see in the world, while simultaneously curbing China’s rising influence in a positive manner. Maybe. Perhaps, on the other hand, the unfettered access of rogue regimes to Chinese capital will blow up in the faces of the AIIB, thereby teaching the whole world some warm and fuzzy lesson in the process. Taking from current events elsewhere, Iran’s strained investments in Syria, for example, could prove instructive.

Or, perhaps the most we can hope for, is that the coexistence of the World Bank and the AIIB provides some constrained and relatively safe space for the U.S. to come to terms with the rise of Chinese hegemony in the region, in a manner that protects the interests of both nations and promotes mutual cooperation among them. In short, “a case for accommodation, not confrontation.” Such a development would be welcome for the future of international human rights in any return to a bipolarized world. If parallels may be drawn to the Cold War, using the rise of the AIIB to foster accommodation and cooperation, rather than a coming century of US-Chinese hostility, might be doing the whole world a favor. If the United States cannot prevent the ascent of Chinese predominance, then perhaps we can at least gracefully bow out of regional hegemony in a manner that positively influences China’s future in Asia. Perhaps in doing so, the United States can in some small way live up to its rhetorical human rights promise. Put differently: perhaps Keynes’ wisdom at Bretton Woods was at least partially premised on that, at the time, Great Britain knew a thing or two about the twilight of empire. Whatever comes next, maybe our own practices will share in this wisdom.

To cross your fingers is one thing. To hold your breath is another.

Chris Beall is a Staff Writer for Rights Wire.

The views expressed in this post remain those of the individual author and are not reflective of the official position of the Leitner Center for International Law and Justice, Fordham Law School, Fordham University or any other organization.

Photo credit: Richard Schneider/Creative Commons