IPS writes that “in a world where governments are increasingly subservient to global finance capital, multinationals are gaining ground in the fight against state regulations that aim to protect the environment, public health or social policies.” So for all of those thinking that things are slowly but surely getting better for the environment and human rights this comes a surprise.
It is not a surprise though and it is not new either. A famous case happend last year when Philip Morris took legal actions against the Australian government because the latter wanted to introduce a law for cigarettes to be sold in drab, plain packaging from late next year. Starting from December this year, all cigarettes and other smoking products would have to be sold in simple olive coloured packaging. Health minister Nicola Roxon explains the move with the follwing idea: “plain packaging means that the glamour is gone from smoking and cigarettes are now exposed for what they are: killer products that destroy thousands of Australian families.”
A lot is at stake for Philip Morries and other cigarette companies since other countries look at Australia as an example and think about introducing similar laws in order to reduce the number of smokers and therefore the health bill. Similar stories happen in the US where cigarette companies sued the government for wanting to introduce the well-known graphic warnings.
These cases could possibly cost the governments billions of dollars and mainly serve to awe smaller nations from taking similar steps. Now, the case of the cigarette companies are well-known but there are so many more. “According to the most recent data released by the United Nations Conference on Trade and Development (UNCTAD), the number of lawsuits brought against governments by companies evoking clauses in bilateral investment treaties (BITs) was 450 at the end of 2011.” Many more cases are hidden and not counted in this number. The privatisation of water is a big issue and has especially been exploited for lawsuits in Latin America. Argentina has endured 51 known cases followed by Venezuela and Ecuador (25 and 23).
So far, more cases are decided in favour if states (40%) but a big part of the lawsuits end in settlements (30%) meaning that in 60% of the total cases the companies gain from this kind of action.
Some cases are pretty scary: “For example, in the late 1990s, Mexico was fined 16.7 million dollars for forbidding the U.S.-based company Metalclad from dumping toxic waste in the Guadalcazar County.” Another example is Germany, who was sued for deciding to face out atomic energy.
The biggest problem, however, is pointed out by IPS: “Ironically, BITs (laws protecting the investor) allow companies to sue governments but not vice versa.” Let us just think about the Chevron case. That case is getting even worse now because “Ecuador was forced to pay fines of 78 million dollars to the United States’ oil company Chevron, which claims that the country’s efforts to protect the Amazon from pollution have negatively affected business.” Who pays in the end are not only the government (and therefore the people) but most of all the environment.