By Aldo Orellana López and Thomas Mc Donagh*
Since the beginning of the new millennium, Latin America has been at the forefront of resistance to the imposition of global and regional free trade policies. The most important victory was the defeat of the Free Trade Area of the Americas (FTAA). It was the most ambitious free trade project in the world to date and was abandoned following the mobilization of civil society throughout the continent. However, recent years have witnessed a new expansion strategy and a new global offensive for the liberalization of trade and investment. The two major initiatives currently underway are the Transatlantic Trade and Investment Partnership between the United States and Europe (TTIP) and the Trans-Pacific Partnership (TPP), which involves some Latin American countries.
In the current context, with the Americas clearly divided between countries promoting free trade and the deregulation of foreign investment on the one hand, and others attempting new forms of integration and increased controls on investments on the other, civil society once again finds itself in the midst of a debate in which it’s important not only to protest, but also to put forward alternative proposals. We feature here a major initiative launched recently by the ‘Working Group on Investment of the Americas’ that seeks to do just that. It’s entitled ‘A Call for the Building of an Alternative Legal Framework to the International Investment Treaties. Favoring the Public Interest while doing away with Transnational Corporate Impunity.’
As part of our series of strategy conversations on campaigns against the investment rules system and corporate power, the Democracy Center contacted two colleagues from ATTAC Argentina to discuss the objectives of this alternative proposal and how it will be used. We spoke to Luciana Ghiotto and Javier Echaide**- two members of the working group that published the proposal.
A Call for Regime Change, A Call for Alliance Building
We began the interview by asking about the origin and the objectives of the initiative. According to Luciana Ghiotto, the initial idea of developing this proposal was part of a cumulative process of work going back over many years, while it evolved into its most recent form at the Global Week of Action against Transnational Corporations in Brussels in 2011.
She said that “one of the main focuses of that event was to address how transnational corporations use the global investment rules system to protect their investments in other countries … and it was decided that there was a need to develop a document by all of the organizations present … “. Ghiotto also notes that “the document is part of a longer-term campaign underway in the Americas and elsewhere. Some of its precedents include the campaign by partner organizations in Mexico, the USA and Canada against NAFTA, the subsequent campaign against the FTAA, and the recent campaign against the ICSID and BITs launched in Asuncion, Paraguay in 2010 during the Social Forum of the Americas.”
The document drafting process has drawn on a number of proposals developed over the years by civil society organizations, social movements, activists and academics. As Luciana Ghiotto says “we attempted to draft the proposal in the broadest and most democratic way possible … and it is not meant to be a closed, definitive document, but rather it will continue to be transformed, receiving contributions and new inputs, new perspectives and proposals. We are already receiving responses from organizations that are interested in being part of the process. We know that internationally there are other groups working in the area of investment, so what we want to do is to connect with these organizations and to develop alliances. ”
Objectives: campaign and advocacy material
As can be seen from the title of the document, the proposal is rooted in the need to dismantle the excessive power that corporations have in the global investment rules regime.
Luciana Ghiotto told us that what they wanted to do was “in the first place, present a detailed analysis…an updated assessment that would allow us to have a common position on how we see the current system. Secondly, the idea was to present an alternative to global investment agreements, a proposal for an alternative system”. She went on: “What we want to achieve with this is to extend the campaign by getting more organizations on board, but also to lobby, the proposal is also suitable for intervention work with governments, to try to intervene in decision-making spaces in which we can present this alternative view.” She continued: “I think it would be a success to achieve this dual effect: on the one hand … that the call is used as campaign material that gets picked up by Latin American and other organizations… but also to intervene at different levels of decision-making, we hope that the call will be used, for example, by some members of parliament and by some international negotiators in Foreign Affairs…”.
Javier Echaide meanwhile told us that the idea is “…to work towards the construction of an alternative framework for the regulation of investment, where there is justice and fair treatment, so that the guarantees that a state gives to a foreign investor do not become privileges for investors at the expense of local communities … that is, so that ordinary people do not end up paying for the extra profits that investors take out of the country… what we need is regulation at international level in order to rebalance the scales…. ”
The document stresses the importance of recovering the regulatory capacity of governments as a key objective. It seeks to build an alternative international investment framework that is based on democratic principles and that prioritizes public interest over private profit. The document contains proposals in this regard that would put human rights and the natural environment before the rights of investors, as well as setting binding obligations for corporations so that they are held responsible for their actions.
The Call specifically lays out a set of principles for the construction of an alternative framework for international investment, including: guidelines for the establishment of a different system for the resolution of disputes between investors and states; the elimination of the concept of “indirect expropriation”; the elimination of sunset clauses in investment agreements; allowing capital controls; lifting the ban on performance requirements; blocking illicit capital flows; prioritizing productive and environmentally friendly investment above speculative investments, among others.
While new frameworks for investment based on these principles are developed, the Call lays out a a common agenda of short- and medium-term action including the following: prevent the signing of new agreements of this nature; carry out audits of the impact of these agreements and of investor-state cases at national level; cancel or denounce BITs and investment chapters of FTAs that have been signed; denounce ICSID and restrict the use of other international tribunals; regulate foreign investment; and submit disputes that may arise to national and local courts.
Messaging And Audiences: Translating a Complex Issue & Connecting with other Struggles
We also spoke to our interviewees about the challenge of “translating” the legal jargon that is often used when speaking of the global investment rules system. It is important to refer to the subject in a language that helps people to understand the effects that international decisions relating to the system have on their lives – help people to ‘join the dots’ so to speak.
In that regard, Javier Echaide maintains that “the Call is intended not just for specialists, but mostly for communities, because they have to realize that things go beyond just their local issues, that transnational corporate power comes with a guarantee… then we can establish a link between acting locally and thinking globally.” The Call also underscores the importance of understanding how the current investment rules system works in order to be able to dismantle it, “if we do not understand how companies are able to come, plunder, pollute and leave, nothing is going to change. We need to understand that companies do what they do because they have guarantees, we need to understand that their rights are now above the rights of the affected communities. So that’s where this Call is aimed- at helping people to know that these rights are not natural, that they are not unchangeable, and showing that they can be disassembled and dismantled; this is precisely what the document is aiming to do: to generate an alternative … in that regard it not just a technical alternative proposal, but it is a fundamentally political call. ”
Echaide also noted that “the Call is specifically on investment for two reasons: first because it is a complex issue and is not sufficiently covered, despite having links with many other issues at regional and local levels … when you fight against a mining company, for example, or any other extractive project, those local groups involved in these struggles may not fully understand what they are facing. Even though they are there on the ground and see the impacts first-hand, they may not understand the effects of what happens in their territories and how it is connected to the bigger picture struggles at international level. And this not only with struggles related to extractive industries, this system provides a number of legally binding safeguards to the model of production and consumption,… these guarantees can be seen in FTAs and BITs.”
Javier Echaide also told us that “what we want is to alert civil society in our hemisphere and beyond, that this excessive protection to foreign investment is a way of transferring public resources into private hands. This means that the cases brought by corporations against states in international courts, end up being paid for by our communities.”
Lessons and Opportunities
One of the first lessons we can draw from the process is on the importance of clear objectives. As outlined by Luciana Ghiotto, the Call has two: using the document as an information and education resource in campaigns, and as a tool to influence decision-making at local and national levels, which, at the end of the day, is where groups have most scope for concrete action. For Ghiotto “the idea is that each organization will now be responsible for promoting the Call in their countries and work areas, bringing it to the attention of different organizations and to the relevant government agencies working on this topic. That is the process. ”
Another lesson, as noted by Javier Echaide, is the importance of reducing the issue to a more popular language and linking it to other areas in order to reach new audiences and broaden the social base that is questioning the system. While these links are not visible, no changes can be achieved. For this it is important to understand that this is not a technical-legal issue, but essentially a political issue, and it affects the daily lives of people in several respects. So it’s important to develop messages in a way that people can identify with, this will help build a common agenda for action.
In terms of target audiences, this simple diagram, based on this and other conversations with activists, illustrates the sectors that we need to engage. At level A are the organizations and individuals who are directly involved in working to change the investments rules system. Level B includes organizations and people who have learned about the effects of the system after they faced specific cases, such as with the case of Pacific Rim v El Salvador, or Philip Morris vs. Uruguay. This includes not only organizations working to change the system itself, but also local communities and activists working on issues like water, the environment or public health who are coming up against the system in their local struggles. Level C includes all organizations that work in areas that may not be involved with the system itself, but that should be aware that this system represents a barrier to the realisation of their goals. Just like the system has come to the attention of groups fighting for an environment free of mining pollution in El Salvador and those struggling against tobacco consumption Uruguay, it is important that groups involved in struggles against Fracking, nuclear energy, climate change etc. realise that the system is a cross-cutting issue that is relevant to their struggles, and that it will not easily allow them to achieve their objectives . Finally, at level D, we have the general public, journalists, academics, etc. Tailoring our messaging strategies to each of these audiences will be crucial for building power.
Making the most of favorable political winds
While facing down this latest offensive by the system in agreements such as the TPP, TTIP, CETA etc. and continuing to insist that our countries denounce ICSID and withdraw their consent from other such tribunals, we should also be aware of changing political winds. As we discussed with Luciana Ghiotto, these can sometimes throw up some unexpected opportunities. According to her “there is a more favorable context at international level to at least discuss the global investment rules regime. Several countries have begun to question the treaties they have signed, including countries that have withdrawn from ICSID, such as Bolivia, Ecuador and Venezuela … and other countries that are beginning to question their existing investment agreements… countries like South Africa, India even Australia, all of which gives a more favorable context for the Call to have a stronger impact.”
These favorable political winds are largely due to the work that has been carried out by civil society organizations worldwide. From the Americas to Europe, Asia and Africa, in cities and in local communities, people are struggling to build proposals to change this global investment system and reverse the enormous power that it gives to corporations. The objective of this proposal is to contribute to the achievement of this change. It’s not an easy task, but as Luciana Ghiotto says, “… the investment regime will not end soon, but the Call is a contribution in that direction …”.
*Aldo Orellana López and Thomas Mc Donagh are researchers at the Democracy Center in Cochabamba, Bolivia where they coordinate the Network for Justice in Global Investment, a project by the Democracy Center and the Institute for Policy Studies in Washington D.C.
**Luciana Ghiotto is a Political Scientist and Doctor of Social Sciences (Universidad de Buenos Aires-UBA) and member of the Hemispheric Social Alliance and of ATTAC Argentina. She is also part of the technical team that is carrying out an audit of BITs in Ecuador.
Javier Echaide is a lawyer (UBA), Doctor of Law (UBA), researcher UBAC&T and university professor. He is a member of the Hemispheric Social Alliance and of ATTAC Argentina. He is also currently a member of CAITISA in Ecuador currently carrying out an audit of BITs signed by that country. www.javierechaide.blogspot.com
NAFTA:North American Free Trade Agreement; ICSID:International Centre for the Settlement of Investment Disputes; BIT:Bilateral Investment Treay
The Working Group on Investment of the Americas is a collective that has been working for several years in different organizations and networks promoting a global trade and investment regime that is based on democracy, social justice and respect for the environment.