TOBACCO GIANT Philip Morris is suing Ireland for attempting to introduce plain-packaging for cigarettes. The move has caused outrage in Ireland, and rightfully so. We’re not the first country that Philip Morris’ army of lawyers has targeted in this way. It is a tactic we see repeated around the world by big business interests, who want to block or frustrate “burdensome” progressive law-making by any means available to them.
The tools available for Philip Morris in Ireland’s case are the national courts, where at least public scrutiny, judicial independence and fair and equitable access to justice are guaranteed. But this may soon change with the proposed EU-US trade deal, the Transatlantic Trade and Investment Partnership (TTIP).
Under the proposed deal, an obscure mechanism could make the threat of lawsuits, and potentially huge payouts to companies, a regular feature in Ireland’s law-making processes. Known as ‘Investor-State Dispute Settlement’ or ISDS, the mechanism allows foreign companies to bypass national courts and take claims against countries for their perceived loss of current or future earnings, as a result of new laws.
Countries being sued by companies
In Australia, Philip Morris lost its court battle on new cigarette laws, but then used ISDS to sue Australia once again via a Hong Kong subsidiary. The case is ongoing, and despite little information it is thought they’re looking for billions in compensation. We know that Germany is facing a €4.7 billion euro ISDS claim brought by a Swedish energy company, for deciding to phase out nuclear energy after the Fukushima disaster. The French Veolia group used ISDS to sue Egypt for raising the minimum wage in 2012.
The largest known settlement paid out by an EU country was Poland, which was forced to pay €2 billion to Eureko, an insurance giant, after it decided not to privatise public insurance in August 2005. TTIP expands foreign investors access to ISDS tenfold, with an estimated 75,000 EU and US subsidiaries gaining the right to sue governments under TTIP.
Strengthening the hands of already powerful corporations
Our government’s right to regulate is under threat if the EU-US deal is passed, and it could have real monetary costs for cash-strapped Ireland. Even the threat of being sued can cause a “chilling effect” on governments’ willingness to make new laws. Would Ireland really be inclined to bring in new financial or social regulations if there is a risk of being sued for billions by the many US multinationals based in Ireland?
Currently we are unique in being the only EU country that has not signed an investment treaty that includes an ISDS mechanism. However, Minister for Trade Richard Bruton was one of 14 EU trade ministers who penned a letter to the EU Trade Commissioner last October, requesting that ISDS be included in TTIP, despite opposition from countries like France, Germany and Austria.
We know the US has told EU negotiators that the exclusion of ISDS would be a deal-breaker. Our strong ties with the US, and our government’s continuous ringing endorsements of TTIP to date, may account for Bruton’s willingness to provide his signature.
Criticism is pouring in from concerned citizens
Recent polls suggest that Ireland has one of the highest support levels for the agreement. Yet the more people understand what it contains, the less they like what they hear. The Irish Farmers Association warns that the beef industry is set to suffer substantially from cheap and substandard imports of US meat.
Our universities have warned it will undermine our public education services. The Irish Medical Organisation has also said that mechanisms like ISDS would “weaken existing or future regulations and policies that protect public health”, just as in the case of plain packaging for cigarette packs now.
A recent John Oliver ‘Last Week Tonight’ episode exposed for many the shadowy abuses of trade pacts by companies like Philip Morris. While ordinary Irish citizens might be surprised by their actions, we can’t allow it to become the new normal. Already the TTIP agenda has been rigged in favour of the most powerful corporations at the expense of the public good.
The battle is raging in Brussels, over ISDS in particular, and MEPs are due to vote on TTIP on June 9. It would do our representatives well to hear the anger directed at the actions of Philip Morris in Ireland, and to think how much worse it would be under the EU-US trade deal.
Simon Mc Keagney, TTIP Campaigner, Greens/EFA Group, European Parliament. For more info see: www.TTIP2015.eu