17-21 July, Nairobi, Kenya
Considering the recent avalanche of claims against our countries in courts of arbitration,
we say ENOUGH ALREADY!
We, the organizations and civil society networks that sign this declaration, express our rejection of the increasing power of transnational companies, supported by various free trade and investment agreements that have been negotiated and signed in the Americas, which will increase with the Trans-Pacific Partnership (TPP), the Transatlantic Trade and Investment Partnership (TTIP), the EU-Canada Comprehensive Economic and Trade Agreement, as well as the Trade in Services Agreement (TISA). We hold that these agreements only consolidate the power of corporations across the world and in particular in signatory countries, undermining both the rights of people and environmental conservation efforts.
At present, most countries in our hemisphere, from Canada to Argentina, are being exponentially targeted with multimillion dollar claims from corporations which arise from the enactment of regulations designed in the public interest or in support of the environment. This illustrates the damaging effects that the system of investment protection and international arbitration has on national legislation.
Corporate power has taken shape in an international legal system which confers it with omnipotent and abusive rights and which guarantees it impunity. This is embodied in the inclusion of investor-state dispute settlement clauses, which allow investors to fall back on the international arbitration system than of national courts. Thus, investors make claims against sovereign states for millions of dollars in secret and private arbitration “tribunals” (the World Bank´s ICSID, the ICC and the SCC, among others) which operate outside the reach of local law. Opposing this, governments and citizens have no legal counterweight and no higher international authorities before which to launch proceedings when transnational company activities violate human and environmental rights or interfere with public policies which serve the common good.
Free trade and investment treaties undermine states´ ability to regulate: their rules are not consistent with human rights and environmental protection and do not respect the sovereign right of countries to implement responsible public policies. BITs contain clauses which limit the capacity of receiving governments to act in support of sustainable economic development, to protect the environment and public health, to defend their countries from financial crises and to privilege human rights. This has become evident in high-profile cases such as the claim with Philip Morris placed against Uruguay in respect of a health protection policy, arguing that it violated the investment´s intellectual property, a right incorporated in the Uruguay-Switzerland investment treaty.
Likewise, extractive sector corporations, such as those in petroleum and mining, take enormous advantage of these treaties. Following one of the largest verdicts in history, Ecuador is being obliged to pay USD1 billion plus interest to the United States corporation, Occidental Petroleum (Oxy), for canceling an operating contract in 2006. The same country is required to pay USD700 million to Chevron, also a US company.
More recently, an avalanche of claims has been received from the destructive extractive sector, challenging public policies which aim to converse the environment and protect the rights of communities. Some examples include:
- Pacific Rim versus El Salvador: El Salvador, which is the most water-stressed country in the continent, decided against granting the company a license to mine for gold because the company did not meet environmental requirements. The claim is for more than USD250 million.
- Crystallex versus Venezuela: Venezuela suspended this Canadian company´s permit for the Las Cristinas mining project because of environmental concerns, especially following protests by the indigenous population of the Imataca Forest Reserve. In April 2016 the ICSID ruled that Venezuela compensate the company in the amount of USD1.386 billion.
- Renco Group versus Peru and Bear Creek versus Peru: The North American company Renco placed a claim against Peru in 2011 for USD800 million because the government revoked its permit to operate a smelter for highly contaminating metals in La Oroya, one of the most polluted sites in the world. The Canadian mining company Bear Creek claimed USD1.2 million from Peru because in 2011 the State rescinded the contract to operate the Santa Ana mining project, following environmental protection protests which led to the deaths of several people.
- Infinito Gold versus Costa Rica: The Canadian company claimed USD94 million for having been impeded from continuing to exploit an open pit mine (the Crucitas project). The mining permit had been signed by the State in 2008 and was revoked in 2010 after a court found irregularities and influence peddling in the permits. The same court ordered the company to compensate for environmental damage (the felling of protected forests). Following this verdict, the company sued the State through the ICSID. The company sold all its assets in the country, preventing payment of the environmental damage compensation. In 2015, the Infinito Gold executives resigned because of the sharp fall in share value and the risk of bankruptcy. In spite of the company´s circumstances, the ICSID maintains the claim against Costa Rica active.
- Dominion Minerals versus Panama: The North America company sued Panama for USD268 million for the withdrawal of a mining license because of the rejection of its operation by an indigenous group and for environmental protection.
- TransCanada versus United States: The Canadian company has announced that it will sue the United States for USD15 billion because of the decision by President Barack Obama to reject the Keystone XL Pipeline System after giving in to the pressure and an overwhelming rejection by the population.
- Lone Pine versus Canada and Bilcon versus Canada: The North American company has claimed USD 118 million from Canada for a preventive moratorium on fracking enacted by Quebec Province. Canada has also been sued by the North American Bilcon because of environmental impact studies which indicated that a quarry and marine terminal construction project in an ecologically sensitive coastal zone was not sustainable. The US company is claiming USD300 million in compensation.
- Glencore vs. Colombia: Colombia has faced a claim in 2016 by the Swiss mining company Glencore. The company asked for the reduction of the payment of royalties, which was rejected by the State, who also started the revision of the contract. Glencore considered this act as a change of rules and an expropriation, and so filed a claim against Colombia under the rules of the Colombia-Switzerland BIT. Colombia is also facing the menace of new claims by other three mining companies: Eco Oro Minerals (Canada), Cosigo Resources (Canada) and Tobie Mining and Energy Inc. (USA).
These cases are all examples. Claims by investors against states have exploded in the last two decades: from a total of three known cases under treaties in 1995, to 696 known cases today. In 2015 alone, 70 new cases were presented through the investor-Estate dispute settlement mechanism. To that point, countries from the Americas collectively represented 35% of the claims made by investors registered by the ICSID. Argentina, Mexico, Ecuador and Venezuela have been sued the most frequently.
It is important to stress that States always lose in the international arbitration system, because the claims cost millions of dollars in expenses associated with the defense and the process. Even though in some cases the arbitration panels do not find against the State, the suit implies excessive costs in the contracting of firms of lawyers, which can charge up to USD300 per hour for their advice. Peru is carrying USD50 million in the contracting of two firms of US lawyers for its defense against the four claims of which it is the subject; Ecuador spent more than USD100 million in its defense and in arbitration costs; for its part, El Salvador has spent more than USD12 million just to defend itself against the miner Pacific Rim. These astronomical amounts could have been used for the most urgent public expenditures, instead of being allocated to cover the costs of the suits. On the other hand, where the verdicts have gone against the State, the claims represent astronomical amounts which become new forms of external debt. The recent announcement by the Government of Argentina that it will advance payment of nine claims by companies through the ICSID with bonds payable in 2024 is an example.
At the same time, Bolivia, Ecuador and Venezuela have left ICSID and have begun a process of denouncing some of their investment treaties. Nevertheless, they will continue to receive claims from investors who are protected under sunset clauses of the investment treaties. This shows that these treaties are above sovereign state decisions, since they allow investors to continue presenting claims for a residual period which in many cases is over 10 years.
Therefore, the power of transnational corporations must be dismantled as a matter of urgency. This need to regulate corporate power comes not only from social movements, but also from various governments, parliaments and even international organizations. Likewise, it is essential that there be a binding international code for transnational companies (and other business companies) which obliges them to respect human rights and equips those affected and States with mechanisms and institutions of enforcement.
We demand that all governments of our hemisphere:
- Immediately address our claim for establishing alternative systems for dispute resolution, in which Investor-State clauses are annulled, affected communities and citizens are included and in which disputes raised by investors are dealt with by national courts and according to the laws of the receiving country.
- Abolish the privileges for foreign investors under these free trade and investment treaties and guarantee States the space to implement responsible public policies.
- Generate new rules for investors in which human rights are paramount and the environmental protection is guaranteed above the rights of investors.
- ENOUGH ALREADY OF CORPORATE CLAIMS AGAINST OUR PEOPLES
- ACROSS THE CONTINENT, WE SAY NO TO FTAS
- WE REJECT THE TPP, TISA, TTIP AND CETA
Continental Investment Working Group
ATTAC – Argentina
Democracy Center – Bolivia
Centro de Derechos Económicos y Sociales (CDES) – Ecuador
Comisión Nacional de Enlace (CNE) – Costa Rica
Ecuador Decide – Ecuador
Latin American Institute for an Alternative Society and an Alternative Law (ILSA) – Colombia
Instituto EQUIT, Gênero, Economia e Cidadania Global – Brasil
Institute for Policy Studies (IPS) – United States
REDES / Friends of the Earth – Uruguay
Red Latinoamericana sobre Deuda, Desarrollo y Derechos (LATINDADD)
Red Mexicana de Acción contra el Libre Comercio (RMALC) – Mexico
Réseau québécois sur l´integration continentale (RQIC) – Quebec
Asamblea “Argentina mejor sin TLC” – Argentina
Asociación Nacional de Industriales de Transformación (ANIT) – México
Asociación Latinoamericana de Medicina Social (ALAMES) – Ecuador
BASE Investigaciones Sociales (BASE IS) – Paraguay
CADTM – AYNA (Comité para la Abolición de las Deudas Ilegítimas – Abya Yala /Nuestra América)
Campaña “Chile Mejor sin TPP” – Chile
Centro de Estudios del Trabajo – Colombia
Centro de Estudios para el Cambio Social (CECS) – Argentina
Colectivo Viento Sur – Chile
Comisión Nacional de los Derechos Humanos – República Dominicana
Common Frontiers – Canadá
Confederación de Nacionalidades Indígenas del Ecuador (CONAIE) – Ecuador
Confederación de Nacionalidades Indígenas de la Amazonía Ecuatoriana (CONFENIAE) – Ecuador
Convergencia México mejor sin TPP – México
Escuela Sindical Nuestra América (ESNA)
Etica en los Bosques – Chile
Federación Judicial Argentina (FJA) – Argentina
Federazione Organismi Cristiani di Servizio Internazionale Volontario (FOCSIV) – Italia
Food First Information and Action Network (FIAN) – México
Foro Salud Pública – Ecuador
Fundación de estudios para la aplicación del derecho (FESPAD) – El Salvador
Instituto de Estudios y Formación (IEF)- Central de los Trabajadores Argentinos Autónoma – Argentina
Mesa Nacional frente a la Minería Metálica – El Salvador
Observatorio Latinoamericano de Conflictos Ambientales (OLCA) – Chile
Plataforma de Defensa del Haití para el Desarrollo Alternativo (PAPDA) – Haití
Rede Brasileira pela Integraçao dos Povos (REBRIP) – Brasil
Red de Ambientalistas Comunitarios (RACDES) – El Salvador
Red de Acción en Plaguicidas y sus Alternativas para América Latina (RAPAL) – Chile
Red Nacional Género y Economía (REDGE) – México
Secretaría de Derechos Humanos – Central de los Trabajadores Argentinos Autónoma – Argentina
SERR – Estados Unidos
Siglo XXIII – El Salvador
Transnational Institute (TNI) – Amsterdam
Unión de Afectados por Texaco (UDAPT) – Ecuador