We Sue You

Companies can now bring governments to court. At who’s expense?

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.

5 thoughts on “We Sue You

  1. You just have to stop and take a look at just how powerful these massive corporations are to start to get a bad feeling in your stomach. You can’t sue them!? Maybe governments can’t, but surely class actions…repeated class actions funded by the general populace could make a dent? I have to admit here something that my husband just pointed out that is very relevant to the Phillip Morris case here in Australia. The government has been making a (literal) killing out of taxing cigarettes/tobacco up until now. I dare say there is a bit of bitterness in this lawsuit where right up to now (and possibly into the future) our government says “smoking kills” publically and takes as much as they can get from the business behind the scenes. Cohabiting with the enemy is going to “out” in the end…

    • Interesting point about the cigarette taxes. Governments definitely don’t act only on behalf of the health of their people but rather because they see smoking as being expensive for the public system. Seeing them trying to reduce the number of smokers is promising though…meaning they don’t care too much about the taxes?!

      • Lol…I doubt that Rahel! I am as sceptical about our government and their new policies as I am about the cigarette lobby groups and big business in general. They will be frowning on smoking whilst still taking the excise taxes and charging more and more for those people addicted to cigarettes and who find it impossible to stop. I have never smoked so can’t comment on how addictive it is but my husband did and gave it up. Its amazing how addictive some of these things are…especially junk food! Now THERE is something that the government should be addressing…that is a massive ticking health time bomb waiting to go off any day soon. Australia has a free health system (unlike the USA) and as such they can’t afford to keep treating the diseases that are starting to become extremely prevelent thanks to bad diet…many MANY more than smoking I would imagine and a massive great headache to attempt to regulate and control. Good luck with that Australian Government! And by the way “How about supporting students a bit more? They are the future of Australia!” (a bit of a gripe with the annual budget and how little they care about struggling students…)

  2. We have reached the era of the Apocalypse. This word simply means the unveiling of corruption that has been hidden. We also live in the era of a kind of brutal interconnectedness. The results are unfolding around us daily. One scandal after another and the dirty tricks of corrupt and selfish individuals in group formation, and attempting to hide behind the security of corporate structures. This is becoming harder and harder for them to achieve. And it is a war. The people who stand for opening the up of the truth are indeed fighting in the war of the Apocalypse. Their weapons are not so much bows and arrows or knives and guns. The new weapons are words, images, keyboards and interconnected networks of like-minded souls. Viva la rEvolution

    • I agree fully… and as narf is saying above: we can do something about this. But first people must be interested and aware…

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