Governments must have the flexibility to say 'no' to fracking and other environmentally destructive practices without trade rules getting in the way.
A really important news story - one that should be getting lots of coverage in the US because of its huge financial and environmental implications - is instead getting the silent treatment from corporate media.
A massive trade deal called the Trans-Pacific Partnership (TPP) is almost completely flying under the media radar in the US.
This trade deal includes a provision that basically gives multinational corporations the ability to sue national governments over environmental or other regulations and policies they don't like. As a result, US taxpayers could be on the hook for potentially billions of dollars in payouts and legal fees. You'd think that might be worth at least some media coverage.
But according to Media Matters for America, the TPP hasn't been mentioned at all by ABC, CBS, and NBC during the 17-month period from August 2013 to February 2015. During that same period, Fox News and CNN each mentioned the TPP trade deal once.
As Truth Out puts it, "The mainstream media's complete and utter silence on one of the biggest stories of the year, maybe even the decade, is shocking but not all that surprising." That's because they and their corporate advertisers and backers want the TPP to be ratified.
Corporate coup d'etat
The Trans-Pacific Partnership contains something called 'investor-state dispute settlement' (ISDS) - a controversial trade-dispute mechanism now being included in most secretly-negotiated trade deals.
ISDS allows multinational corporations and investors to sue countries over policy or regulations that hinder their future profits. These lawsuits are secretly tried in special 'arbitration tribunals' - courts that are basically privately run by the corporate sector, with the lawyers and judges selected from a few corporate law firms.
In February 2014, Public Citizen said of ISDS: "Because the mechanism elevates private firms and investors to the same status as sovereign governments, it amounts to a privatization of the justice system."
This blatant hijacking of the justice system for the sake of investors and multinational corporations was first instituted in the North American Free Trade Agreement (NAFTA) twenty years ago.
It subsequently worked out so well for the corporate sector that now ISDS is being included in almost every bilateral and regional trade agreement across the planet, including TPP, the Canada-European Union Comprehensive Economic and Trade Agreement (CETA), and the US-EU Transatlantic Trade and Investment Partnership (TTIP).
These agreements are being negotiated in secret. The implications, especially for the environment and the public, are dire.
Profiting from injustice
In 2012, Brussels-based Corporate Europe Observatory and Amsterdam-based Transnational Institute put out a major investigative report about ISDS and the secretive 'arbitration tribunals' called 'Profiting From Injustice: How Law Firms, Arbitrators and Financiers Are Fueling an Investment Arbitration Boom'.
The report found that even if governments win at these tribunals, they may still be liable for multi-million-dollar legal bills accrued by defending themselves against frivolous corporate lawsuits. Lawyers can charge as much as $1,000 an hour to work on these cases, and fighting a case can cost a government as much as $8 million in legal fees.
The co-author of the report, Pia Eberhardt has stated: "International investment treaties are a powerful corporate weapon to rein in government and make taxpayers pay for business losses ... Policy-makers who sign such treaties are handcuffing themselves and their successors for decades to come." These trade and/or investment deals are usually locked in for twenty years or more.
The TPP has been negotiated in secret since 2008 and has been called "NAFTA on steroids." The Nation has called it "in effect, a corporate coup d'etat" because of the ISDS mechanism embedded in the deal.
In order to see how ISDS works against the environment and the public, we need only look at what's been called "the poster child" of ISDS - Lone Pine Resources' $250 million NAFTA lawsuit filed against Canada in 2012 because the Quebec provincial government issued a moratorium against fracking. As of February 2015, that Lone Pine NAFTA lawsuit is being fast-tracked and the outcome is being watched around the world.
The Council of Canadians - a large NGO that has long opposed ISDS trade deals and other issues - has said that if Canada settles the case before ISDS arbitration commences, or if Canada loses the case, "it will crack the world open to fracking."
Indeed, these crappy trade deals would crack the world open to just about anything the multinational corporations want - because if they can't get a government regulation jettisoned, then under ISDS they can simply sue for lost future profits.
Such lawsuits can slowly drain the coffers of any national government, while lining the pockets of lawyers and fattening the corporate bottom-line.
Fracking and the moratorium
Hydraulic fracturing (fracking) is the controversial shale oil/gas industry technique by which massive amounts of water, sand, and chemicals are pumped deep underground into shale rock to shatter the rock and release the oil or natural gas into the well core.
For years the controversial practice has been linked to water over-use and contamination, air pollution, adverse health effects, earthquake swarms, and other environmental effects.
By the Spring of 2010, the issues around fracking were becoming well-known in Quebec, and a number of environmental groups began lobbying for the Quebec government to limit shale gas exploration and development in the province.
In November of that year, Quebec's Minister of Natural Resources announced a proposed moratorium on shale gas development in the St. Lawrence River, where Lone Pine Resources (and other companies) were intending to use horizontal drilling and fracking to access gas deposits underneath the river.
Given that the area is prime agricultural land and the source of drinking water for thousands of farmers and landowners, public opposition to fracking continued to grow in Quebec. In May 2011, the provincial government introduced legislation (Bill 18) that proposed to revoke all drilling rights and permits along a portion of the St. Lawrence River. That bill became law in June 2011.
Months later, in May 2013, the Quebec government introduced another piece of legislation (Bill 37) that proposed a moratorium on all shale gas exploration in the lowlands along the St. Lawrence.
Up until September of 2010, Lone Pine Resources had been a wholly owned subsidiary of a US company called Forest Oil Corporation. But in September 2010, Lone Pine Resources became incorporated under the laws of the State of Delaware.
And after the completion of an initial public offering (IPO) on 1st June 2011, the company became a stand-alone corporate entity, with its headquarters in Calgary (as Lone Pine Resources Canada Ltd.) and its incorporation in Delaware (as Lone Pine Resources Inc.).
The Delaware loophole
According to a 2012 New York Times investigation by Leslie Wayne, "it takes less than an hour to incorporate a company in Delaware", and by getting this legal address, companies have hopes of "minimizing taxes, skirting regulations, plying friendly courts, or, when needed, covering their tracks."
In the case of Lone Pine Resources, the Delaware incorporation was apparently important to the eventual filing of the NAFTA claim, which the company did in November 2012. Under NAFTA's investor-state dispute settlement mechanism (called Chapter 11), only US or Mexican companies can sue Canada.
Lone Pine claims that it had spent millions of dollars on the project and that Quebec was acting "arbitrary" and "capricious" in revoking its right to horizontal-drill and frack under the St. Lawrence River.
As the Council of Canadians campaigners wrote in May 2013, "of all the companies affected by Quebec's restrictions on fracking, only one firm had the guts to threaten to file a NAFTA (North American Free Trade Agreement) lawsuit against Canada unless the province backed down.
"Only one is pretending to be a US firm in order to skirt Canadian courts and access NAFTA's strange and excessive investor protections. Only this one firm is asking Canada to pay it $250 million in compensation for being deprived of its ‘right' to frack. Yes, we're talking about Lone Pine. The company's NAFTA lawsuit is not just big news in Canada but it has sparked international outrage."
In 2013, thousands of people petitioned Lone Pine Resources to drop its NAFTA lawsuit. As Ilana Solomon of Sierra Club (US) said, "Governments must have the flexibility to say 'no' to fracking and other environmentally destructive practices without trade rules getting in the way."
Pierre-Yves Serinet, coordinator of the Quebec Network on Continental Integration, called the lawsuit "scandalous" and said,
"These provisions of such free trade agreements are direct attacks on the sovereign right of the Quebec government to govern for the welfare of its population. It's astonishing that the negotiations between Canada and the European Union [on CETA] follow the same blueprint. Time has come to end the excessive powers to multinationals."
Stopping the deals
The Trans-Pacific Partnership (TPP) similarly stacks the deck against the public and the environment with its ISDS mechanism. As the Sierra Club (US) has noted, corporations headquartered in the 12 or more nations signing on to the TPP would be able to sue the US over energy and other policies that protect local communities.
In an article called 'Does Fracking Make You Queasy? So Will the Trans-Pacific Trade Pact', the Sierra Club (US) used the example of Japan, a potential TPP signatory:
"More than 6,000 Japanese corporations have operations in the United States - many in the oil, gas, and mining industries - and each could challenge new U.S. laws and policies designed to protect our air and water.
They could easily follow the example of a US energy firm that recently filed its notice of intent to sue Canada over Quebec's moratorium on fracking using similar investment rules. The energy firm was essentially asking Canadians to forfeit their clean air and water for its own profits."
But as news gets out about Lone Pine and the other similar ISDS lawsuits conducted under NAFTA provisions, many countries are taking notice - after hard work by activists.
Canada's David Suzuki has written that by 2012, several countries - including Australia, South Africa, India, Ecuador, Bolivia, Venezuela - are simply refusing to sign trade and investment deals that include the ISDS mechanism.
By early February 2015, the CETA trade deal was potentially unravelling because of the ISDS. And if the CETA fails, then the similar US-EU trade deal (TTIP) and others (TPP) would also likely be in jeopardy.
Both Germany and France have indicated that they want to reopen CETA in order to change the ISDS provisions contained in it, even though the negotiations were completed in October 2013. Various reports have noted that Denmark, Luxembourg, the Netherlands, Sweden, Austria, Belgium, Italy and Greece are also all concerned about the investor-state dispute provision.
They are recognizing that these ISDS trade deals mean their own regulatory decisions would be under attack and that to protect their own citizens, they might have to pay out millions at those secret arbitration tribunals.
The corporate media would prefer that people know nothing about these trade deals. Thanks to the alternative press, that is rapidly changing.
Joyce Nelson is an award-winning Canadian freelance writer/researcher working on her sixth book.
This article was originally published by CounterPunch.