A new wrinkle...this is crazy:
An increasingly problematic aspect of free trade agreements (FTAs) is the inclusion of investor-state provisions that essentially allow companies --
typically huge multinationals -- to challenge the policies of signatory governments directly. The initial impulse behind these was to offer some
protection against the arbitrary expropriation of foreign investments by less-than-democratic governments. But now corporations have realised that
they can use the investor-state dispute mechanism to challenge all kinds of legitimate but inconvenient decisions in any signatory nation.
Here's a good example of how this provision is being invoked to contest a refusal by Canadian courts to grant a patent on a drug, as explained on the
Public Citizen site:
Eli Lilly and Company has initiated formal proceedings under the North American Free Trade Agreement (NAFTA) to attack Canada's standards for
granting drug patents, claiming that the denial of a medicine patent is an expropriation of its property rights granted by the agreement. The investor
privileges provisions included in NAFTA and other U.S. "free trade" agreements (FTAs) empower private firms to directly challenge government
policies before foreign tribunals comprised of three private-sector attorneys, claiming that the policies undermine their "expected future profits."
Eli Lilly's move marks the first attempt by a patent-holding pharmaceutical corporation to use U.S. "trade" agreement investor privileges as a tool
to push for greater monopoly patent protections, which increase the cost of medicines for consumers and governments.
Basically Eli Lilly failed to deliver its side of the bargain, since the drug doesn't work very well, so Canada refused to allow the company to
retain a patent that was contingent on it being effective. What's worrying is that the drug company's present action is not just challenging that
decision, but the whole approach that requires drugs to work well enough to deserve a patent -- not unreasonably.
The case will not be heard before any ordinary national or even international court, with all that this implies in terms of transparency and fairness,
but by a very special kind of tribunal:
The tribunals are comprised of three private sector attorneys, unaccountable to any electorate, who rotate between serving as "judges" and bringing
cases for corporations against governments. The tribunals operate behind closed doors, and there are no conflict of interest rules. The tribunalists
are paid by the hour and governments are often ordered to pay for a share of tribunal costs even when cases are dismissed. There is no limit to the
amount of money tribunals can order governments to pay corporations. There are very limited appeal rights.
The entire approach is clearly biased towards companies and against the national governments, so the following facts will come as no surprise:
Under U.S. FTAs and related deals, private investors have already pocketed over $3 billion in taxpayer money via investor-state cases, while more than
$15 billion remains in pending claims.
However, bad as things are currently, they promise to get even worse if the TPP agreement is finalized in line with leaked versions: