Maryknoll Office for Global Concerns

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Road to Paris: Trade deals must protect climate

As countries prepare for the climate negotiations in Paris in December, some experts have called attention to the need for including safeguards to protect nations’ actions to address climate change from legal challenges by trade partners. Without this legal protection, many of the initiatives to decrease climate emissions or to adapt to a changing environment could be overturned by lawsuits. The following article was published in the November-December 2015 NewsNotes.

The Maryknoll Office for Global Concerns continues to bring attention to the dangers posed by international trade and investment agreements, from threatening food safety and security, to making medicines less accessible, to fueling violence. One of our greatest concerns is the right awarded to private corporations to sue national governments over public policies that hamper a corporation’s profit-making potential. These cases are heard in a special, extra-judicial court housed in the World Bank which advises investor-state dispute settlements (ISDS). These settlements have significantly impeded governments’ ability to create and implement public health and safety laws, environmental protections, and a host of other important legislation. If the international trade tribunal decides that a government policy adversely affects a foreign corporation’s profit making, the government can be penalized.

A group of UN special rapporteurs who are international human rights experts recently released a statement expressing concern that trade and investment agreements  “are likely to have a number of retrogressive effects on the protection and promotion of human rights, by lowering the threshold of health protection, food safety, and labor standards, by catering to the business interests of pharmaceutical monopolies and extending intellectual property protection.” They emphasized the threat of ISDS actions, noting that “States have been penalized for adopting regulations, for example to protect the environment, food security, access to generic and essential medicines, and reduction of smoking… or raising the minimum wage.” 

A new report by investment law expert Gus Van Harten offers the following language to be added to the Paris agreement to cover all existing and future trade and investment treaties:

“This Article applies to any measure adopted by a Party to this Agreement and relating to the objective of stabilizing greenhouse gas concentrations in the atmosphere at a level that would prevent dangerous anthropogenic interference with the climate system or relating to any of the principles or commitments contained in Articles 3 and 4 of the United Nations Framework Convention on Climate Change of 1992.

“Such a measure shall not be subject to any existing or future treaty of a Party to the extent that it allows for investor-state dispute settlement unless the treaty states specifically and precisely, with express reference to this Article and this Agreement, that this Article is overridden. For greater certainty, in the absence of such a reference in a future treaty between two or more Parties, the future treaty is presumed to include in full and without qualification the first three paragraphs of this Article.

“Any dispute over the scope or application of this Article shall be referred to, and fall within, the sole and exclusive jurisdiction of [specific body and process pursuant to the multilateral climate change agreement]. For greater certainty, no investor-state dispute settlement tribunal, arbitrator, body, or process has jurisdiction over any dispute related to the scope or application of this Article. 

“The Parties shall not agree to any future treaty that allows for investor-state dispute settlement unless the future treaty incorporates in full and without qualification the language of the first three paragraphs of this Article. The Parties shall make best efforts to renegotiate any existing treaty with a non-Party that allows for investor-state dispute settlement in order to ensure that the existing treaty incorporates in full and without qualification the language of the first three paragraphs of this Article.”

“If negotiators in Paris, representing nearly 200 countries, do not address this issue, it will be impossible to change each trade and investment treaty individually to protect government initiatives addressing climate change. The UN Conference on Trade and Development reports there are more than 3,200 ISDS agreements functioning today with another created, on average, every other week.”

This is an essential issue for all who want to see a robust commitment in Paris to reducing carbon emissions. No matter how strong the pledges, they can easily be weakened by ISDS lawsuits or even threats of lawsuits, as many small nations do not have the resources to defend themselves adequately in expensive court processes.