Counting down to next week’s ‘home stretch’, The Economist says the Trans-Pacific Partnership (TPP) looms as the most important free-trade agreement in years. “If completed, it will be the largest regional trade deal ever, with its members accounting for nearly 40 per cent of the world economy.”
It also poses significant risks for environment and health, says Dr Peter Tait, convenor of the Environmental Health Special Interest Group of the Public Health Association of Australia, in this article below.
Peter W Tait writes:
When negotiators sit down next week in Hawaii to finalise details of the TransPacific Partnership Agreement (TPPA) they need to take a broader outlook on the health implications of this secretive trade treaty. Not only are there very real potential direct effects on health and health care around food labelling, tobacco and alcohol control, and access to affordable medicines (see TPPA Health Impact Assessment), there are possible serious issues around environmental and biodiversity protection that can have long lasting indirect health consequences. The WTO advocates that trade policy needs to work together with environment policy in order to protect the environment.
Despite proposed (but not accepted) assurances that national policies safeguarding welfare and the environment be included (WikiLeaks draft Investment chapter, Article II.15), history suggests that corporations behave otherwise. WikiLeaks analysis concludes these regulations are meaningless because the language ensures any regulation does not conflict with the basic thrust of the Agreement.
There are two means whereby the TPPA can impair environmental protection. Firstly is the general failure of the agreement to accord sufficient weight to environmental protection. More importantly there is the Investor-State Dispute Settlement (ISDS) mechanism. The ISDS mechanism provides a legal instrument for foreign investors to contest decisions by national governments that they believe impinge on their investments. This is used.
A couple of examples illustrate how international corporations do this. Firstly, the El Salvador government attempted to protect the quality of their water supply from the effects of cyanide based gold mining by American based Pac Rim Cayman. Pac Rim Cayman began proceedings, but they sold the lease and the case to Australian company OceanaGold. OceanaGold is seeking US$300 million in compensation for lost income from the Salvadoran government, unless mining is permitted to proceed. Secondly, Canadian Lone Pine Corporation is suing the Canadian government for US$250 million over Quebec’s moratorium on fracking. More recently, Bilcon sued the Canadian government (using the NAFTA ISDS rules) for taking community values into account when accepting the recommendation from an EIS on a mining operation that lead to rejection of the application, and won because the NAFTA tribunal disagreed with the Canadian government’s interpretation of its own laws. Finally nine US investors are suing Costa Rica for seeking to protect endangered sea turtles in a national park.
By 2012, 32 ISDS cases involving environmental issues had been initiated. Of these, two were settled in favour of the country with payouts of US$3 million and US$7.5 million by corporations, and seven in favour of the company who brought the action. The mean determination was US$25.6 million (ranging from US$2-122 million; median US$ 13 million), which is prohibitively expensive for small nations. The magnitude of claims for damages ranged from US$5.6 million to US$13.5 billion (Tienhaara, K. 2012. Table of Foreign Investor-State Cases and Claims Related to the Environment (unpublished, on file with author)). The costs and aggravation for countries of managing an ISDS case may engender ‘regulatory chill’ wherein environmental and health protection regulation is not undertaken.
Jane Kelsey outlines how many of the chapters within the TPPA may affect the environment. For instance, the investment section may permit challenges to maintaining environmental standards (to attract investors); the customs section may be used prevent differential tariffs on electric vehicles; and the subsidies and countervailing measures part, to prevent measures to promote clean energy production.
I recognise trade is one factor that, under certain conditions, can promote prosperity in a nation or community, and which, if the benefits are shared equitably, can positively affect health. In turn international trade flourishes when thriving national and regional economies exchange in a fair and equitable manner. At the same time, every national economy depends fundamentally on the natural environment which is the foundation of our capacity to sustain ourselves by providing good quality air, fresh water, fertile soil, forests and biodiversity, tidying up our wastes, and providing aesthetic and spiritual sustenance. This is why the environment is a transcendent health determinant.
Therefore anything in the TPPA which impairs a nation’s capacity to safeguard its environment has potential to undermine the public’s health. Growing food to feed local communities and providing a surplus for trade cannot happen without the ecosystem services provided by healthy environments. Although sounding banal, it is nonetheless axiomatic, that without the environment there is no community, and hence no economy.
Australia is an ecologically fragile continent and all governments in Australia must retain the right to regulate to protect our environment and ecosystems. Unless the treaty text specifically grants the government the power to veto corporate actions when they contravene national interest, then we risk having our sovereignty and our capacity to protect ourselves and our Pacific neighbours undermined.
Further, at this end of the 21st century, every international treaty needs to clearly articulate how it contributes to environmental conservation and greenhouse gas abatement. Specific mechanisms to achieve these aims, clear performance indicators, and enforceable strong penalties for non-compliance need to be incorporated in the agreement. Whereas markets have the capacity to provide a cost effective response, to date the market has failed spectacularly to lead to reduce greenhouse gas emissions and protect the environment. Markets need recognisable goal posts. These need to be stipulated in the TPPA terms.
So I exhort those hammering out the deals next week in Hawaii to remember that our economy depends on our ecosystem, and that depends on countries being able to regulate to protect it. Not only are there direct implications for health in the treaty provisions, but the larger scale need to protect the environment as a health determinant is equally important.
Peter Tait is an adjunct senior lecturer at the ANU Medical School, and Convener of the Public Health Association of Australia, Ecology and Environment Special Interest Group