Blueprint for a Screwed-Up World: An International Summit in Cancun Next Month Could Transfer Even More Power from Democratic Governments to Big Corporations

By Retallack, Simon | New Statesman (1996), August 25, 2003 | Go to article overview

Blueprint for a Screwed-Up World: An International Summit in Cancun Next Month Could Transfer Even More Power from Democratic Governments to Big Corporations


Retallack, Simon, New Statesman (1996)


Picture this. A world government is created with big business in charge. When any national or local government hits corporate profits by passing a law to protect the environment or public health, this world government can impose huge financial penalties until the law is removed. Too preposterous to be true? The fantasy of paranoid, emotionally unstable greenies? Or perhaps just another mad idea from one of those neoconservative policy wonks with friends in the White House?

Wrong. This vision of how the world should be run is all too likely to become reality--and with the support of the British government. At the World Trade Organisation summit in Cancun, Mexico, starting on 10 September, the EU will try to use its leverage as the planet's largest trading bloc to expand the rights of corporations in an unprecedented way. The negotiations will be led by the European Commissioner for Trade, Pascal Lamy--and the UK Secretary of State for Trade and Industry, Patricia Hewitt, will be right behind him.

At the top of their list of demands is the innocuous-sounding agreement on investment. The transnational corporations and their lobby groups want what the investment chapter of the North American Free Trade Agreement (Nafta) provides for North American corporations, but on a global scale. Were this to happen, the British government would no longer be able to prevent a foreign corporation setting up in the UK, no matter how bad its environmental or social record. New laws designed to improve environmental, health or labour standards could be interpreted, if they reduced corporate profits, as an "expropriation" of foreign investment, and thus prohibited. Corporations could go to special closed-door tribunals to claim compensation, paid by UK taxpayers, if these rules were breached.

The people of Canada, Mexico and the US have lived under exactly these rules for the past nine years. When the Canadian government banned a fuel additive in 1996, which Prime Minister Jean Chretien described as a "dangerous neurotoxin", the US-based Ethyl Corporation sued for compensation. It argued that the ban constituted an "expropriation" of Ethyl's Canadian investments. Merely by introducing and debating the bill in parliament, it claimed, the Canadians had harmed Ethyl's global reputation, thereby expropriating part of its future profits. Lawyers advised the government that it would lose, and so it lifted the ban and gave Ethyl $13m and an apology. Canadians breathe in the results of this decision every time they step outside.

Likewise, the Mexican government had to pay the US waste-disposal company Metalclad $15.6m. This was because the municipal government responsible for Guadalcazar refused to allow Metalclad to open a new toxic-waste facility on a site that is highly vulnerable to groundwater contamination.

In 2000, a US company, SD Myers, sued the Canadian government for profits lost from a ban on PCBs, hazardous chemicals found to cause cancer and to harm development and reproduction in humans. A Nafta tribunal ruled in the company's favour.

Many other cases brought by corporations against environmental and health laws in North America are pending. The US bulk-water trading company Sun Belt is suing the Canadian government because the provincial government of British Columbia banned water exports. The Canadian corporation Methanex is suing the US government because California is phasing out the gasoline additive MTBE, a potential human carcinogen, which is said to have contaminated groundwater supplies. The US Crompton Corporation is suing the Canadian government for introducing restrictions on the use of another possible carcinogen, the pesticide lindane.

If the corporate lobbyists have their way--and the European Commission, with British support, seems determined that they shall--we too will have to live in such a screwed-up world. In effect, if we want the government to improve the quality of air, water, food, or working conditions, ministers will be forced either to pay off corporations with millions of pounds of our money or to change the law until it suits the corporations. …

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