TransCanada Shows How the TPP Will Threaten Climate

It seems clear that President Barack Obama has truly picked up his game when it comes to protecting the environment: CAFE fuel economy standards, the Clean Power Plan, climate negotiations with China that clearly opened things up for COP21, and now halting all coal leases on federal lands.

But one key legislative initiative that he seems particularly keen on stands out like a smokestack in a nature sanctuary — the Trans Pacific Partnership or TPP.

I know the president believes that if we don’t set the agenda on Pacific trade, the Chinese will. If they do, the thinking goes, all the things we care about -- like protecting wages and the environment -- will be far worse off. I get that, and it could very well be true. But what I don’t get is why President Obama allowed multinational corporations to essentially write the deal in total secrecy.

I look forward to the day when the words “business-friendly” don’t strike fear in my heart. And I do believe we are moving closer to that point, as more and more businesses are beginning to expand their scope to encompass the broader context that they, their suppliers and their customers all operate in. But we clearly are not there yet, not by a long shot, and this agreement pretty much proves it.

The document is broad and sweeping and more than 2,000 pages long. I would be very surprised if more than a handful of people have read it in its entirety. But however much good news might be contained in those pages, there is an item in Chapter 28, under the heading 'Dispute Settlement,' that I find particularly troubling. The provision calls for “the establishment [of] a dispute settlement panel tasked with determining whether a party has failed to comply with its obligations under the Agreement.” The panels will consist of “three objective international trade and subject matter experts,” appointed by the disputing parties. The dispute process further allows for “trade retaliation.”

Let’s look at an example of how this could play out. Two months after the Obama administration rejected the Keystone XL pipeline, TransCanada took advantage of the dispute mechanism in NAFTA, which the TPP provision is modeled after, to sue the U.S. government for $15 billion under the retaliation provision -- claiming that U.S. environmental policy has hurt its business. The case will be decided by a private three-member panel, one of whom will be selected by TransCanada. The second panelist will be selected by the U.S., and the third member will be selected by the two initial members. If the U.S. picks an “international trade and subject matter expert” who happens to be an industry insider, then we know how this will go.

To be clear, this lawsuit will not and cannot reverse the Keystone decision. However, the threat of suits like this will certainly bring pressure to bear on future decisions of this sort.

While NAFTA only grants this power to a relatively small number of corporations, the TPP would open it up to more than 9,000 corporations, including some Japanese and Australian oil companies that are drilling in the Gulf of Mexico. If the U.S. were to curtail drilling there for environmental reasons (something that would make a lot of sense, by the way), what would stop these companies from suing us as TransCanada has?

Other examples have already occurred. Turning the tables under NAFTA, when Quebec banned fracking under the St. Lawrence River, the U.S. oil firm Lone Pine Resources sued the Canadian government.

Another recent example has deprived U.S. consumers of country-of-origin labeling on the meat they buy in the grocery store. This was the result of lawsuit brought against the U.S. by countries which felt that consumers’ knowledge that they were the source of their meat would adversely impact their sales (something to do with a Mad Cow outbreak, perhaps?). The USDA complied by removing the labeling requirement in order to protect American exports to those countries.

Other examples include the Swedish energy giant Vattenfall suing Germany over their decision to phase out nuclear power, and Chevron using this type of tribunal in an attempt to evade the multibillion-dollar lawsuit over oil spill-related damages it is responsible for in Ecuador.

To put it simply, in a world where large companies are dealing with extremely dangerous products and materials, there needs to be accountability no matter how much money is at stake. This dispute mechanism was clearly inserted into the TPP agreement by companies in an effort to avoid any such accountability. At a time when the future of this and many other species lies in the balance, actions by a few powerful companies could make all the difference. This mechanism gives them the means to tip the balance against all the rest of us, in the interest of their short-term profit, without consequence, and it is simply unacceptable.

As David Korten has said, we can only have stability in our society if the power of government, business and the people are roughly in balance. The power of multi-national corporations in recent years has grown to point where they are now writing the laws, leaving few checks and balances remaining on their actions. This proposed agreement would strip away much of the little that remains.

Image credit: Flickr/Deepwater Horizon Response