Rights And Responsibilities

Sanya Reid Smith

Human Rights

Sanya Reid Smith is Senior Legal Advisor and Policy Analyst, Third world Network.

Many of these trade agreements like the TPP11 are not just about exporting milk and importing computers. For example, only 6 of the 30 chapters of the TPP11 were about exporting and importing stuff. The other 24 chapters were about restricting your regulatory space and policy space, like making medicines more expensive or the ISDS system many people have been talking about. I think this hui is very timely and needed because NZ is not only negotiating free trade agreements, like the RCEP which is why I am in Auckland, but also there are current negotiations at the World Trade Organization. Both of these can harm human rights, the environment, public services and so on. All of these – the bilateral trade and investment treaties and the WTO – need to be rethought, including from a human rights lens.

Sanya’s talk starts at 31 minutes.

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Bill: Human rights are a vitally important question for people, which underpin their democratic rights, their rights at work, their standard of living, equity of treatment, privacy and much else. They are particular important in the face of powerful forces, including large corporations and the policies they tend to support. How do you see the structures of the treaties we are talking about being changed to give these rights primacy.

Sanya: As we heard from Geoff Bertram, many of these trade agreements like the TPP11 are not just about exporting milk and importing computers. For example, only 6 of the 30 chapters of the TPPA11 were about exporting and importing stuff. The other 24 chapters were about restricting your regulatory space and policy space, like making medicines more expensive or the ISDS system many people have been talking about. I think this hui is very timely and needed because NZ is not only negotiating free trade agreements, like the RCEP which is why I am in Auckland, but also there are current negotiations at the World Trade Organization. Both of these can harm human rights, the environment, public services and so on. All of these – the bilateral trade and investment treaties and the WTO – need to be rethought, including from a human rights lens.

It’s also timely because we see some new governments who are more progressive coming into office and they say, ‘oh we’ve fixed it’. Then they do a cosmetic change, like changing the name of the TPP to Comprehensive and Progressive, and they say “job done. All fixed. Nothing to worry about. I’ve put the word ‘progressive’ in the name of the agreement.” Or they have a gender chapter in some of the new trade agreements negotiated by Canada that doesn’t address any of the problems that the trade agreement causes for women. It just says “we love women. Let’s have a committee. All fixed, all done. Women, you now keep quiet, this is all good for you”.

So the question is what would be a really serious change to these agreement to make them better, in the case of what I am looking at for human rights? I just want to briefly mention 4 issues.

The first is that there have been a lot of critiques of these standard trade and investment agreements, like the TPP-11, on human rights, including by 10 special UN rapporteurs on human rights. They said these trade and investment agreements can harm human rights, including the rights to food, education, health, water, culture, environment, labour, indigenous rights and so on.

These UN human rights bodies have given detailed critiques of the trade and investment agreements, including the investment provisions on expropriation that Geoff mentioned, on fair and equitable treatment, repeated concerns about ISDS and the impacts on the environment, food security, affordable medicines, smoking reduction, and so on.

The UN special rapporteur on the rights of indigenous peoples actually said “the outdated belief of governments that they are in a position to guarantee the security of investors via these agreements while ignoring the rights of indigenous peoples must be debunked”. She was very clear about that. These investment provisions have not been proven to attract foreign investment, which is why most governments signed onto them – they think they will get more foreign direct investment (FDI). So if it’s not proven to bring more FDI, where are the benefits to outweigh the costs of ISDS and the investor protection rules in the investment chapters.

The UN special rapporteur on human rights is also concerned about the strong protections for intellectual property rights on medicines that Leena Menghany mentioned in the health session; about UPOV 1991, a treaty that can make seeds 4 times more expensive for farmers and facilitate biopiracy of Maori traditional knowledge; and the cost of textbooks through stronger protections on copyright.

These are not the only provisions in these trade agreements that can harm human rights. You heard about the e-commerce provisions and the impacts they can have on privacy. Even the services rules in these trade agreements can undermine various human rights, and labour rights can be threatened by multiple chapters in agreements currently being negotiated by NZ.

But it’s not just the UN who is raising these concerns. You heard yesterday Dr Slatter mention the letter signed by 221 women’s groups rejecting the WTO’s gender declaration, because it’s a Trojan horse for the new issues and it doesn’t address the existing problems for women in existing WTO rules.

The second issue is, if you are going to have these problematic provisions in trade and investment agreements, you need to have a broad, effective, easy to use exception for human rights and the other issues we have talked about in this hui. We heard in the health session this morning that trade negotiators are effectively trading away people’s lives for more exports. That’s it. You have less affordable medicines and may die from preventable diseases like Hepatitis C or cancer, so that a few more people in your country can export a bit more stuff. People living with HIV Aids have long said ‘don’t trade away our lives’. This is something that is not negotiable in a trade agreement. There should not be provisions that harm the right to health and the right to life.

Because human rights treaties are legally of the same status as a free trade agreement you would think they are equal. But in practice the trade and investment agreements are enforceable. You don’t comply with the ‘trade’ rules, you can be sued at an international tribunal and face tariffs on your exports until you change your law to comply, even if you were doing it to comply with a human rights treaty. In the case of ISDS, the penalty could be billions of dollars in damages. So the human rights treaties, the health treaties like the Framework Convention on Tobacco Control, the environment treaties, the labour treaties are unenforceable. If there is a conflict, your government has to choose between the trade agreement, or complying with the human rights or labour treaty. Which one do you think they are going to comply with?

The UN rapporteur on the rights of indigenous peoples said international investment agreements, for example, must have properly constructed exceptions for the right to regulate. We see that the section of the European Commission responsible for the GDPR privacy laws has proposed in the last couple of months a pretty good exception for privacy that is subjective, and is better to use than the standard, self-cancelling style WTO one that’s in the TPP11. But that’s only for privacy. Not for other human rights like health, or indigenous rights, or education. The EU’s good exception is only for privacy.

If you are going to negotiate these trade and investment agreements then the negotiating process itself should be consistent with human rights. So again the 10 UN special rapporteurs on various human rights said they were concerned about the secret nature of negotiating these treaties. They recommended that all negotiations should be done transparently, with consultation and participation of stakeholders like unions, and consumer groups, and environment groups.

They secondly recommended all the negotiating texts should be published, so civil society and parliamentarians can see what’s in them, can give inputs. This is do-able. This is happening today. The EU publishes their proposals in their free trade agreement negotiations, even with NZ. And they are still able to conclude the negotiations. The same issues we have been discussing are negotiated at the WTO, the World Intellectual Property Organisation (WIPO), where again the proposals are public. And in WIPO, as a civil society organisation, I can walk into the negotiations, sit there, listen to all the governments speak, put my hand up and speak after they have spoken, get all the negotiating texts. They can still conclude deals on the same issues. Yet free trade agreements must somehow be done in secret.

The third thing is the human rights impact assessments. This has been recommended by the UN special rapporteurs on human rights to be done before and after, including for your existing trade agreements. Again, this is do-able. The Thai government managed to do it for their US free trade agreement. If the Thai government can do it, why can’t developed countries do it – not to mention the health impact assessments and environmental impact assessments that others have talked about.

Lastly and briefly, we do need to work out what to do about the existing trade and investment agreements, including those that NZ has signed on to that are problematic for human rights and the other things we have been discussing here. Again the 10 UN rapporteurs on human rights have said we invite governments to revisit their treaties and ensure that they foster or don’t hinder human rights. Some governments are withdrawing from treaties that are problematic, like the investment treaties – South Africa, India, Indonesia, Ecuador are withdrawing. Some fixes can be done multilaterally. Also trying to make ISDS more transparent was done via a multilateral agreement. Other governments are replacing their old agreements with better ones – you could argue the new NAFTA is better in some areas, like it has no ISDS between Canada and the US, but it is worse in some areas, like access to medicines.

Bill: Can you explain some more about the UN Human Rights Committee negotiations for a binding treaty on business and human rights?

Sanya: There are negotiations on a binding UN treaty to make companies liable for human rights violations. It would be good if the new NZ government could support that. The question still is how enforceable that will be compared to a trade or investment treaty. If it’s just like another human rights treaty which is unenforceable and nothing happens to you, then governments that face a choice between complying with that and with a trade and investment agreement they will still go for the latter.

Bill: You were talking about 2 models of protecting rights – one was to beef up protections in agreements and another is that you raise the primacy of the international rights agreements of various sorts. Can you talk about the pros and cons.

Sanya: I think there’s actually three. One is: don’t have the bad rules that cause such problems to human rights and arguably have no benefits, or less benefit compared to the costs. Examples are ISDS or stronger intellectual property protections on medicines when NZ is a net importer of medicines.

The next two options are second best. If you are going to have these bad provisions in some way because somebody’s insisting on them and you have to have a trade agreement with them, because you have to export stuff, then have better exceptions. Jane Kelsey has been working on the kind of best wording. The security exception, for example, which is subjective – whatever the government deems necessary to do, they can do for national security, but the same approach could be taken for environment or human rights or whatever. That’s the wording that’s being used by the EU’s D-G Justice who is responsible for the GDPR in their privacy exception. You could break it down in the way Russel Norman did yesterday: to cover anything you do to comply with NZ’s human rights obligations under treaties, then NZ’s domestic law, then a general exception. There is some question in these trade agreements if refer to some other treaty and not all the countries in the free trade agreement signed that treaty.

Bill: Should there be obligations that corporations have as well as rights?

Sanya:  There was a famous ISDS case in Mexico where there was a Canadian mining company that was very unpopular. People were demonstrating against it. A Canadian company employee went to a demonstrator’s house and shot him dead. The Mexican government said this is a problem, let’s put a temporary stop to the mining activities while we figure out what went on. The Canadian company was going to sue under ISDS for the lost profits it would have made during the time they stopped the mine from operating. In other words, you pay the murderer.

This is because the investor rights, including in the TPP11, are absolute rights. The investor has the right to sue and get damages for their lost profits, no matter what laws they have broken. No matter if Chevron is polluting the Amazon rainforest in Ecuador, no matter if they are the Canadian mining company murdering demonstrators, they always have the right to sue for full compensation for damages. There has been a pushback on this. In 2016 Slovakia and Iran have a new investment treaty which says investors can only sue if they have complied with the domestic law of the host country. They have to come in legally, operate legally, pay their taxes, otherwise they don’t get the rights. This is some of the new models we see – if you are going to have these agreements then at least the foreign companies should comply with domestic law. Otherwise it’s pay the polluter, pay the lawbreaker, because their rights are absolute and they get a scott free pass on all NZ’s regulations and laws.

It may also relate to the e-commerce chapter provisions, which is also about letting your data go out, as we heard. We know from Edward Snowden that when our data is stored in the US the government walks in and downloads gmail, dropbox, whatever else. So if that involves activists their communications are also vulnerable. This is why some countries say we want to store certain sensitive data in our own countries. That depends again on who your government is.

Richard Aston

Consumers

Richard is Chairperson, Consumer New Zealand.

At Consumer NZ we think that trading agreements should have consumers’ interests in the centre of them. They are usually at the fringe of the negotiations. That means a whole chapter on consumer protections and consumer benefit. And at a higher level, the intent of the trade agreement should be framed around what is best for people, consumers and people. The traders, let them make a few dollars on the side, but at the core it should be what’s best for the people of each sovereign country.

Richard’s talk starts at 2 minutes into the video.

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Bill Rosenberg: We are often told these agreements are good for consumers, because they provide choice and cheaper goods, and there’s some truth in that. But consumers also have rights to ensure what they are buying is safe and a good quality and does what it says it does. With cross border services, such as health and finance it becomes even more difficult to ensure that consumers and patients and clients are protected. The use of their personal information and privacy is an increasing issue, which becomes more difficult if the buyers and sellers are separated by thousands of kilometres. How do you see this developing and what should be done to ensure consumers have at least as good protection internationally as at home.

Richard: I come from a consumer perspective, which is quite selfish – what’s the benefit for consumers, outside of the export side of agreements. At Consumer NZ we work closely with our European counterparts. There’s a large umbrella organisation in the EU whom we’ve been talking to, in particular talking about a potential Euro-NZ trade deal. We work together.

Trade – basically we’re for it. We think free trade can be of benefit to consumers and some of the European research shows there are significant benefits. I was reading from the European reports some interesting history about trade. They’ve done studies on Neanderthals and homo sapiens. Neanderthals never traded outside their local areas; homo sapiens did, you can see their tools all over the place. The conclusion is that’s how we survived as a species, we traded a lot. It’s in our DNA to trade. But there’s a fine line between trading and invading. We’ve also done a lot of invading in human history and I think big trade deals have an invasion quality to them as well.

Benefits for consumers? If you are dropping tariffs and trade restrictions, it’s obviously coming through as better prices, a wide range of goods and quality for consumers – that’s good – if that actually happens and the traders pass that benefit on to consumers. We think that trading agreements should have consumers’ interests in the centre of them. They are usually at the fringe of the negotiations. That means a whole chapter on consumer protections and consumer benefit. And at a higher level, the intent of the trade agreement should be framed around what is best for people, consumers and people. The traders, let them make a few dollars on the side, but at the core it should be what’s best for the people of each sovereign country.

That’s our main position. We’re pretty hot at present on country of origin labelling (COOL), which we think should be included in trade agreements. How we regulate that is something I’ll come to. And we’re pretty keen on blockchain to handle that. COOL is where did this product come from, but not only that – what were the standards in making that product, who was enslaved in making that product or not. All that information should be freely available on an accessible basis to consumers, not filtered through regulators and governments whom I do not completely trust.

We have an issue around consumer protection and privacy. Privacy is interesting. We do a lot of surveys of consumers and concern about privacy is about 50-50, pivoting around the 35-40 year-old limit. Under 40 most people don’t give a damn about privacy. “I don’t care what to know what Facebook knows about me. I have no interest.” If you are over 40, older members are concerned that “they know everything about me”. Younger people say “whatever”. It’s kind of a split in consumer interests.

Consumers are more concerned about invasion, which is dodgy business practices on the big global market. That’s where it’s shifting now. We get lots of complaints to the Consumer phone line about people being ripped off on overseas websites. Not the big reputable ones. And there’s no way recourse. I don’t think that a company having an office in NZ makes any difference at all. There need to be really good solid agreements about protecting consumers from this country buying from another country. We are entering into a global business. We would like to see better protection in trading in the digital markets. Another area is telecommunications. Our members complain a lot about roaming charges, getting whizzed by big telecom companies. Why can’t we include that in some of the deals?

Our European friends have done a lot of work on regulatory issues. There is a whole lot of regulations agreed in a trade agreement between 2 sovereign countries. All that stuff happens behind closed doors, by government officials who I’m sceptical about. What do they know about that stuff? We think a regulatory framework should be set up, but it should be outside of the trade agreement – open source, ad hoc organisation and systems where regulations between two countries are a collaborative process, where our regulators are talking a lot to regulators over there and agreeing or not on how to harmonise regulations, on safety standards, consumer protection and enforcement. We think this should be done outside the secrecy of the trading agreement. It should be transparent, open and accessible by the public.

Claire: You spoke about good solid agreements that would preserve consumer rights, and on the other hand some implementation should be done separately, can you explain that a bit more?

Richard:  We think it should just be a trade agreement, as people have mentioned, without all the other stuff that gets shovelled into this bucket and called trade, whether it’s investment or intellectual property. And the regulatory stuff that happens on the outside of the agreement is massive, it’s bigger than the agreement. Regulation is how the reality of a trade agreement is expressed in a country. And that’s all behind closed doors. That’s our biggest issue. The whole trade agreement is secret, and the regulatory stuff inside the trade agreement is done by government officials. We don’t know what it is or why. We don’t even know what the regulations always are, they are sometimes slipped in later. We want an open, transparent process. We don’t know what it is – a framework where regulators on both sides of the agreement can talk to each other outside of politicians and work out how to make this best work for people on both sides of the agreement. That process should be transparent to all, so we can all see on a website that there’s going to be a regulation that comes in now. We do this, so the public can give feedback on it. We want a much more open, public and democratic process around the regulations.

Andrew Chen

Privacy

PhD Candidate, Faculty of Engineering, University of Auckland.

I want to talk a bit about privacy and how we can use international trade to try and help protect our privacy rights. A lot of the threats to privacy in the coming years are going to be enabled by artificial intelligence (AI) and this is going to change the way our data is being moved around and traded that were not considered when our rights were being created. Our rights are simply not fit for purpose in this new landscape. … There are very few nation-state responses or actions. Governments simply don’t know what’s out there now. Law makers are simply unaware of the risks and the opportunities where we can use technology to protect privacy. This is one area where states have been largely reactionary. There is currently a Privacy Bill going through Parliament. It is hoped to pass next year. And it has been characterised as fit for 2013. So it’s going to be out of date on arrival.

Andrews talk starts at 8:30 in the video.

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Bill Rosenberg: Privacy and controlling use of personal information for commercial purposes is increasingly at risk in the digital world. It’s changing very rapidly as the Google’s and Facebooks of the world are increasingly difficult to control. Their interests are also reflected in the trade and investment agreements, particularly the e-commerce chapters. How do you think the digital industry will develop over the next decade or so and how do you think agreements should be structured in the face of this change in order to ensure people’s privacy and control of their lives is protected?

Andrew Chen: I’m a computer systems engineer, and in front of the computer all day developing them – and feeling bad about it sometimes. Just from that perspective I need to provide a balancing perspective to Dr Sims in the last panel. With respect, stuff the blockchain. It’s got a lot of good things, but there are also a lot of bad things, and you can’t just take the good bits, you will also have to take the bad. When you do your research make sure you get both sides of the story.

I want to talk a bit about privacy and how we can use international trade to try and help protect our privacy rights. A lot of the threats to privacy in the coming years are going to be enabled by artificial intelligence (AI) and this is going to change the way our data is being moved around and traded that were not considered when our rights were being created. Our rights are simply not fit for purpose in this new landscape.

Privacy is one of these areas where exposing the downsides of large-scale data collection and trade of that data can create a lot of attention. If we think of the NSA or Cambridge Analytica and Facebook, you get this huge furore after one of these things is exposed, but then most of the mitigation strategies are placed on the individual. So we tell ourselves OK we’ll delete Facebook, or don’t use Google.

But there are very few nation-state responses or actions. Governments simply don’t know what’s out there now. Law makers are simply unaware of the risks and the opportunities where we can use technology to protect privacy. This is one area where states have been largely reactionary. There is currently a Privacy Bill going through Parliament. It is hoped to pass next year. And it has been characterised as fit for 2013. So it’s going to be out of date on arrival. That’s how far back governments are.

And there is a reliance on the lobbyists in this space, and these lobbyists are funded by companies that say things like ‘move fast and break things’. And that’s not really a good strategy. We don’t trust civil engineers to build bridges in this way, yet we’re building this whole new digital infrastructure in this way. Privacy rights are viewed as antithesis to capitalism by these companies, because they get in the way of doing business. More companies are wary of this now. But without that regulation there is no incentive for companies to behave in a way that is going to protect the privacy of individuals.

At the same time, Europe is exporting its privacy standards with the General Data Protection Regulation (GDPR). This has been happening this year. Jane calls it organ harvesting; we call it contagious legislation. States copy each other; they look overseas and say we’ll do the same thing. This can be good if we are copying good protections. What happened with GDPR is it led to a massive scramble of all of these companies around the world saying we need to be GDPR-compliant or we will lose access to the EU market. That’s a huge market so they had to make themselves compliant. That wasn’t because satisfying the GDPR was technically not possible. It was because they didn’t want to. Now there was a need for them to do it they became compliant. For that to happen requires leadership from states. We’ve seen that in the EU; NZ can be a leader in this space and prioritise it and say it’s important to us as well.

Trade agreements can demand performance standards on how trade is conducted. For instance, there are cross border data transfer requirements in a whole lot of the e-commerce chapters in these agreements. It can be weird to think about data transfers as international trade. But there is that exchange of value that can be regulated. In the same way as we reserve the right to look into a car that is being imported, if you bring a software programme into this country then we reserve the right to look into that software code potentially. There are some existing standards but we could go much further to introduce some stronger property rights around data – you owning your own data, and having rights to that data. You can do this with or without the blockchain. Particularly on how multinationals use and trade that data for secondary purposes because data is non-rivalrous. It can be copied, people can use it multiple times. It requires a slightly different set of rules from say a house, a vehicle or other tangible property. The GDPR is an example of how this can be achieved and we can do a lot more. NZ can make it a priority and it should be a priority for all trading nations.

Bill: You talked about GDPR. Could you spell out for people here a bit more about it, as it seems to be significant step forward in protecting privacy. The question raised in my mind is that, in a sense, we are just legislating for privacy in NZ but it’s not fit for the future? What happens if things change. Is GDPR going to be fit for the future/ And how would we develop it if it actually belongs to the EU and is not actually international property. Is that the right way to do these things, to rely on one jurisdictions version of it? For example, the US doesn’t really have any proper rights in this area, it treats it as a kind of a commercial rather than a human right, so there’s big tensions there.

Andrew:  The GDPR came into force from the EU this year. It basically required a lot of things around consent and opting in to participating in certain services and whether you agree to give your data up to certain services. Everyone would have received a bunch of emails saying they had to opt in or opt out of particular services a couple of months ago. There was a big scramble for everyone to get their ducks in a row. It is probably seen as one of the more progressive sets of privacy legislation around the world right now. Everyone else is taking a wait and see approach.

Privacy is an area where there is a pretty good international community, for example an International Association of Privacy Commissioners who all get together to talk about these issues. They tend to say let’s try this out and see what the adverse effects are and then if it’s good we’ll copy it. They are generally trying to make things better.

But there are definitely differing opinions on whether some regulations in GDPR go too far. I personally think it is mostly good, but a lot of people think it goes too far and is stifling innovation. It depends on which side of the fence you sit on, I suppose. Canada, for example, is saying that maybe they are not going to copy and paste the whole GDPR.

There is this concept of adequacy captured inside the EU privacy legislation, which says we will certify certain countries as adequate under our standards. If they are adequate you can do certain types of trade that you can’t do with other countries. NZ currently has had adequacy I think from 2012. That was a big deal because it was seen as good for trade. But at the moment Canada is thinking of not doing that because maybe European standards of adequacy may be too high a bar for them, given their expectations and requirements. They are thinking about whether to try to keep adequacy. Here in NZ it appears we are going to keep trying to maintain it. You could argue that’s because we think privacy is important, or because we want to maintain our trade relationships with Europe, depending maybe on how cynical you are.

Regarding the US – the companies themselves are maintaining the relationships and meeting the EU standards because otherwise they lose the European market. But as a state it’s a mess. I don’t think there’s any comprehensive privacy legislation in the US that makes any sense at this stage and they are going to do their own thing. We’re lucky in NZ where we have principles-based legislation, which means we can take those principles and apply them to a whole bunch of different circumstances. In the US there’s a lot more specific rules that say you can or can’t do that. That means it gets outdated really quickly and they are constantly playing catch-up, and very much influenced by the powerful lobbyists who have a say in how those laws are being constructed.

Bill: Why do you think the new Privacy Act is so weak, and might the EU consider in the new negotiation with NZ that it is not adequate in light of the GDPR?

Andrew:  There are two areas in which I think the new privacy legislation is a bit weak. One is that it doesn’t have some of the rights that are offered under the GDPR, like the right to be forgotten. There are a bunch of rights that are not even included under either of those two pieces of legislation, like the right to not be subject to algorithmic processing if you choose not to be, or the right to retain control over your biometric data, which is stuff that you can’t change about yourself, and the right to have explicit consent over the secondary trade of your data. These are some of the more modern rights that are being discussed but aren’t in any of the legislation.

The second area is around enforcement. We currently have almost no enforcement. The new privacy act will have almost no enforcement. The penalties are really low. The Office of the Privacy Commissioner has a little bit more power, but not nearly enough. This can be contrasted to the GDPR, which has the ability to levy penalties that are up to around 4% of global revenues. That really makes companies wake up when they realise that this is a large amount of money for a Google or Facebook. This shows that we could be trying to do a lot more with our bill here in NZ to really send a message that this is serious and we do care about this.

Would our bill become an issue in maintaining adequacy for the EU? It may be an issue, but I think the current strategy is that we will keep trying to update our legislation. The current aim is to maintain adequacy. So we will be reviewed on a semi-annual basis and it seems we are going to try to maintain our standards to match the EU. The adequacy standards don’t require that we have exactly the same requirements as the GDPR. There are some things we are allowed to not do as a state. It’s the companies that have to comply with the GDPR. So adequacy is a slightly different set of standards from what the GDPR holds companies to.

As an engineer I’d really like you to talk to the people who are making the technology if you are worried about the impacts – the actual developers. Not the managers or the owners, but the actual developers making the technology. That’s because they have a lot of power. In the same way that most of you believe in workers’ rights, the same does exist in technology companies. Earlier this year a bunch of Google employees were pretty upset that Google was agreeing to Department of Defence contracts and they managed to shut that down. Google stopped those contracts due to their employee backlash. So break down the silos. If you are worried about the impacts of technology, talk to the people who are making it.

Dr Geoff Bertram

Corporations

Geoff is Senior Associate Institute for Governance and Policy Studies, Victoria University of Wellington

Trade is trade, no more nor less. It has to be dealt with as trade. Investment is something different and it needs to be dealt with as investment. Corporate rights and duties are simply that – they are the rights and duties of a corporate entity. They are not trade, they are not investment. They are rights and duties. And because the nation remains the repository of most of the things we want to protect against the more malignant bits of the global system then, like it or not, we need to reinstate the nation state as a key defence, but it needs to be a rather reinvented state that we reinsert.

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Bill Rosenberg: Transnational corporations (TNCs) have been major forces behind the trade and investment agreements and are given very influential roles in their design. One of the most controversial aspects of these agreements, investor-state dispute settlement (ISDS), is designed to protect their interests in a quite unprecedented way in historical terms that compromise sovereignty and our judicial systems. But their reach goes further than this. Many people say these powers do not belong in these agreements. What should be the relationship between these agreements and domestic law and what should we be aiming at?

Geoff: I want to talk first about unbundling the Trojan horses and second about “takings”, in other words taking stuff away from people. I want to start with unbundling because I get frustrated at the way the discourse around these agreements calls them trade agreements, when only a minor part of the agreement is actually about trade. All sorts of other stuff has been bundled in on a take-it-or-leave-it basis and it’s really important for a progressive strategy to unbundle, unpick, and deal with the bits separately on their merits and their own terms.

We know that local and transnational corporate interests would like to have their property rights treated as absolute and inviolable and strong provisions written into trade agreements to block the taking of their property by any national government. This extremist assertion of corporate property rights gets wrapped up into trade negotiations. It’s a deliberate strategy that has been going on since the Multilateral Agreement on Investment (MAI) ran into popular opposition in 1998 and was defeated. So precisely the same ideas, the quest for corporate rights and total protection against any taking of property, has now got wrapped into agreements that are sold to you under the heading of free trade.

There are two consequences of that, it seems to me. The most important one is that it discredits the idea of free trade. While there are a lot of really good things about trade, and free trade, and the benefits of exchange, the agreements in which those benefits are packaged up are becoming so discredited that the good stuff is getting lost in the murk that’s created in the assertion of corporate interests.

I think the first step in a progressive strategy is to rescue trade from the embrace of the US-led anti-takings jurisprudence. A Trojan horse is a neat device. It is a beautiful package that looks great, and you drag it in the gates because you are so proud to have it, and nobody mentions to you at the time that inside are forces that will leap out and destroy the state in which you are living and its system of laws and integrity. There’s a lot to be said for the wisdom of ordinary people using common sense who say there may be something hidden in there that we might want to check out before we bring it in. That’s the way we have to think about these agreements. Once they stop being trade agreements, and they have stopped being trade agreements – that’s just the packaging – and start being Trojan horses containing a vast pile of corporate interests, it is very important to unpick the bits.

Trade is trade, no more nor less. It has to be dealt with as trade. Investment is something different and it needs to be dealt with as investment. Corporate rights and duties are simply that – they are the rights and duties of a corporate entity. They are not trade, they are not investment. They are rights and duties. And because the nation remains the repository of most of the things we want to protect against the more malignant bits of the global system then, like it or not, we need to reinstate the nation state as a key defence, but it needs to be a rather reinvented state that we reinsert.

Having said that, I want to talk about government that really looks after the interests that are fundamentally important to human beings in their societies. Corporate rights and duties have to be defined by national law. The whole point about the MAI – there’s quite a nice Wikipedia article on it that says “the MAI sought to establish a new body of universal investment laws to give corporations unconditional rights to engage in financial operations around the world without regard to national laws and citizens’ rights, and gave corporations the right to sue governments if national health, labour, environmental legislation affected their interests.” And the countervailing thing to that is to assert the primacy – for the moment – of national laws.

Coming to “takings”, the principle that one refers back to is that of eminent domain. The sovereign does have the ability to seize the property of individuals and corporations within the national realm. It just means the rights of private property are circumscribed in any nation by the duty of national governments to act for the greater good of their people. At least, that’s the idealistic version. That means that all property and property rights within a sovereign nation are ultimately held and exercised subject to regulation, taxation and possible confiscation. Within the nation, nobody is above the law, including foreign corporates. Being subject to the law of the land does mean being subject to uncompensated losses if the national government imposes such losses. And you hope that they’re acting in the national interest, following due process. Transnational corporations should claim no greater protection than ordinary citizens have and should be given none. ISDS is redundant as well as offensive.

Here is the conundrum. We want to think about takings. There are just takings, and there are unjust takings. A taking is not simply a taking. It comes in different ethical flavours. If we look back to NZ history and the large number of references to the Treaty of Waitangi and the subsequent events, we have had a massive exercise in uncompensated taking by white settler society of assets originally held by the tangata whenua, and we are still working through the consequences of that. So it is no surprise to me that among the interests to step forward to promote the Treaty settlements and talk about the injustices to Maori in this country were quite a number of neoliberal thinkers on the right, the Business Roundtable and so on, who wanted to hide protection of their private corporate property rights behind the shield of sympathy for Maori confiscation.

There are degrees of justice, therefore. The state that does the taking may be acting genuinely for the common good. Or it may be acting for some particular sectional good. It’s really important to stand back philosophically and think about how the power of eminent domain is being utilised, especially when a national state is confronting global capital in the interests of clearing a democratic space in the interests of its citizens.

Let’s suppose we have solved the problem of what the interests of those citizens are. First we need to know that the property rights are justly acquired. Robert Nozick, an icon of the right, makes the distinction between justly and unjustly acquired property, as well as justly and unjustly held property. It’s a really important distinction. And a lot of the rights being claimed by the forces of international capital are not justly acquired or held, if you work from the standpoint of a national community.

So let’s look at some examples of takings under NZ law. The Sentencing Vehicle Confiscation Act 2009 – remember crusher Collins – provides that the courts may seize and order the destruction of the vehicles involved in certain offences. No compensation. It’s a straight out confiscation. If you think about the interests that leapt up and down in enthusiasm about the Crusher Collins programme you will see that property rights are not inviolable; they are subject to due process.

Think about the Fisheries Act 1996, section 207. Fishing vessels that are breaching the exclusive economic zone may be seized without compensation and the captain and crew subject to court proceedings. It’s an uncompensated taking, a completely legitimate taking.

Think of a couple of others, some of them you do and don’t like. One I really don’t like is section 47 of the Energy Companies Act 1992, which expropriated the assets and businesses of the old electricity supply authorities in NZ. It says your assets are hereby seized and transferred to whatever entity the minister thinks would be good to take over. And lo and behold you have the electricity distribution companies which surround us now.

Or the Bank of New Zealand Act 1945 section 3: the government thinks it would be good for us to have a bank, so we hereby announce that all the existing private shareholders will be paid the sum of 2 pounds 5 shillings in cash or government bonds. The BNZ became a government entity and the shareholders who previously owned the bank get cash, or if they don’t want the cash, then government bonds.

These are takings, and they are legitimate takings after due process approved by the Parliament of the land. Whether they are “just” simply because due process has been pursued is a fair question. There you back to the land confiscations of the 19th century, which did have the approval of the Parliament, but you have to worry about the legitimacy of the parliamentary system when those takings were rolling through.

In relation to dealing with international corporate capital, this business of takings is really serious. It does need to be unbundled from trade and dealt with on its merits on the basis of some fairly clear legal thinking. Corporations should be subject to the law of the land and the law of the land should impose duties where appropriate. These agreements can’t change the law.

Bill: You talked about how investment doesn’t have a place in these agreements. Do you have thoughts about what we do about international regulation of investment. Presumably it’s still necessary in some form?

Geoff: You need to have some form of agreed rules. If the MAI had actually been a discussion from the grass roots about how we want to run a world where there is going to be investment flowing across borders it would have had a very different outcome. What we got was a top down imposition of the corporate agenda. Vast popular movements said no. When you had an unbundled, straight up down question of whether we want to do this the answer was ‘no way’. When you get it all bundled up with a lot of rhetoric about the benefits of trade, nobody knows quite how to stop it. You’ve got to get it unbundled. Then you’ve got to be open to the possibility that some international rules on managing investment is not a bad idea. Just do it right.

Bill: That raises the idea that maybe we should be moving more towards multilateral agreements in specialised areas, rather than increasing number of bilateral and plurilateral agreements full of tradeoffs.

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