What you need to know
Imagine a world where Taiwan could not legally challenge multinationals like RCA for its deadly pollution of Taoyuan. Such is the world augured by the CPTPP.
Do you care about the land, environment, and health of workers and citizens in Taiwan? If so, you should be fearful of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership, also known as the TPP-11 or the CPTPP, which the government is pushing to join. Before we strive to join the trade agreement, we should gain a working knowledge of what it contains.
The CPTPP contains something called Investor State Dispute Settlements (ISDS), which are extrajudicial arbitration courts exclusively designed for, and exclusively used by, multinational corporations. Once a country’s government signs and recognizes an investment partnership agreement containing a provision for ISDS tribunals, jurisdiction over disputes involving multinational corporations of contracting countries is transferred from the country’s judicial system to the hands of ISDS courts, which operate separately from the state.
In other words, when multinational corporations become embroiled in legal disputes involving environmental pollution, labor exploitation, or consumer disputes, Taiwan’s sovereign and independent judicial system retains absolutely zero jurisdiction. The legal status of ISDS courts, as defined by Chapter 9 of the CPTPP treaty, is above that of a sovereign state.
The court is ostensibly designed to give multinational corporations a space for smooth international arbitration without the involvement of multiple judicial interventions. However, in past ISDS tribunals, judges responsible for arbitration have often been enterprise lawyers friendly with the multinational corporations whose behavior they are tasked with regulating.
This is not a dystopian sci-fi scenario. This is very real.
But ISDS courts do not simply remove jurisdiction over corporate arbitration from the hands of a contracting state’s court system. Multinational corporations can even assert a court in a country receiving an investment “illegally hears” cases and counterattack by demanding compensation. This would be equivalent to Taiwan being forced to pay compensation to RCA, the American company recently required to pay compensation for causing industrial pollution at its Taoyuan plant, which led to at least 78 deaths, because its courts had “illegally heard” the RCA case.
By pushing to join the CPTPP, Taiwan is voluntarily walking into this trap. This is not a dystopian sci-fi scenario. This is very real. In fact, the consequences of giving free reign to ISDS courts can be observed by looking at what happened in Ecuador just over one month ago.
In early September, an international tribunal in The Hague ruled that Ecuador did not have the power to issue a US$9.5 billion judgement against Chevron Corp. and its subsidiary Texaco for causing environmental damage in an Ecuadorian village.
In a world without extrajudicial tribunals, punishment and consequence for polluters would be a self-evident truth. The 2011 Ecuadorian judgment, which granted a massive financial outlay to indigenous residents of the northeastern village of Lago Agrio, should have been seen as justice served for a campaign of pollution and insufficient cleanup efforts which began when Texaco started drilling for oil in the area in the 1960s.
In 2013, however, Chevron filed a suit to an international tribunal, asserting that a 1995 trade partnership agreement with the United States removed jurisdiction from the Ecuadorian judicial system. Five years later, the international court ruled in favor of Chevron, agreeing that Ecuadorian courts had overstepped, accusing them of corruption, and leaving the people of Ecuador liable to pay an as-yet-undetermined compensation sum to Chevron.
This example shows why multinational corporations are so fond of ISDS courts in investment partnership agreements, pushing to include them via lobbying when states negotiate trade pacts.
The CPTPP fully embraces such a design.
Imagine it RCA filed suit with an international tribunal, stacked with friendly judges, that overruled Taiwan’s Supreme Court and ordered taxpayers to pay compensation to RCA for its financial losses. The CPTPP would bring such a future directly to Taiwan’s doorstep.
Even if slight adjustments are made, the principle of having extrajudicial courts override the Taiwanese judicial system would be upheld in the CPTPP.
Should Taiwan really strive to join an investment partnership agreement with substantial, long-term impacts on sovereignty and democracy? Imagine it RCA filed suit with an international tribunal, stacked with friendly judges, that overruled Taiwan’s Supreme Court and ordered taxpayers to pay compensation to RCA for its financial losses. The CPTPP would bring such a future directly to Taiwan’s doorstep.
What happened in Ecuador should serve as a warning for Taiwanese citizens who care about their land, environment, and democracy. The CPTPP, shady and mysterious in all the wrong places, is bound to strike directly through the heart of Taiwan’s judicial sovereignty.
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This article originally appeared on the Chinese-language Taiwan edition of The News Lens. The original can be found here.
Translator: Lin Ying-jen
Editor: Nick Aspinwall (@Nick1Aspinwall)
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