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Interview :: Environment
A Partial Privatization of Justice
18 May 2015
On, Richard Trumka of the AFL-CIO warns that the TTIP is a secret tribunal where only foreign investors can sue. The TTIP represents a crisis for democracy and the constitutional state where corporate lawyers serve as judges and decisions are irrevocable. Labor and environmental regulations can be chilled or invalidated as takings or indirect expropriations

Frank Bsirske rejects special corporate rights to sue in the TTIP agreement

[This interview published on 3/13/2014 is translated from the German on the Internet, . Frank Bsirske is the chairperson of the German Verdi service union.]

A few days ago three EU delegates of the German Greens published a confidential EU document “Guidelines for Negotiations on the Transatlantic Trade- and Investment Partnership between the European Union and the United States of America.” [1] Many good intentions and little that is really threatening can be discovered in the guidelines. But why is there secrecy about the negotiations on the free trade agreement TTIP [2]?, Sven Giegold asks. “When a broad mandate is kept strictly secret, will the delegates elected by us be silent about the documents?” The sections on investment protection and the right to sue should be published and discussed; everything else remains behind closed doors [EU commission yields a little to criticism on free trade agreements (3)]. Yesterday 90 representatives of organizations presented their desires. On Friday there will be a press conference with the chief negotiators John Clancy (EU) and Anne Eisenhauer (US).

For months the TTIP agreement with the US was presented in a largely trivializing way. This changed recently. A few days ago an influential politician of the CSU, financial minister Markus Soder, declared the agreement would represent a change of the “basic character of the EU.” Do you share that judgment?

Frank Bsirske: In fact, public discussion has recently changed with another view of what happened. The complete non-transparency of the process certainly played an important part. Now and then there is annoyance and irritation about the black box-character of these discussions where hundreds of corporate lobbyists participated. Otherwise the command of secrecy was in effect. This calming is not surprising. Sensitivity increases for individual components of the negotiations, particularly the Investor-State arbitration procedures which include a special jurisdiction for the interests of big business. The momentous price of a serious loss of sovereignty and restricting democratic creative ability is increasingly recognized in society.

The EU mandate, the negotiation commission to the EU commission, is still a secret paper today.

Frank Bsirske: The black box begins when people do not know what goals are negotiated and when the conditions to be observed are not clear. The uneasiness that is triggered is not surprising. The fact that there is no readiness for publication points to a strong interest to keep what happens there non-transparent. This is not acceptable.

The arbitrators in Investor-State lawsuits will have very far-reaching effects. Three corporate jurists – ultimately – will order compensation payments in the billions. Doesn’t that amount to a partial privatization of justice?

Frank Bsirske: Yes, a partial privatization of justice or a special jurisdiction for the profit interest of companies and a restriction of democratic sovereignty and organization of social relations is on the horizon. We must focus on where these processes are underway.

Vattenfall filed a lawsuit against the Federal Republic of Germany for 3.7 billion Euros compensation before an arbitration court in Washington on account of the political resolution on the nuclear exit. A French business is suing the Egyptian state because of the higher legal minimum wage. A Canadian oil- and gas company Lone Pine through its American subsidiary is suing Canada on the basis of the NAFTA agreement (free trade agreement between Canada, US and Mexico) on account of a regional moratorium on fracking in the region of Quebec. Chevron, one of these oil oligopolies, filed suit against Ecuador because of a judgment in Ecuador that obligates Chevron to compensations because of environmental damage in the Amazon. Philip Morris sues Australia and Uruguay because of regu9lations on cigarette advertising and labeling of health dangers. All this shows what is underway and what restrictions on the democratic organization of our societies will occur.

Basically taxpayers should compensate for potentially lost profits on account of political resolutions. This is unacceptable. Skepticism toward these components of the free trade agreement is increasing.

You make this very clear with your example. A state that wants to better protect the health of its citizens should pay fines. Companies argue with the term “indirect expropriation.” Who expropriates whom? In reality, taxpayers are expropriated.

Frank Bsirske: Yes, taxpayers are made liable for restricting business profit possibilities on account of measures serving health protection. How insane!

Karel de Gucht, EU trade commissioner, seems to have yielded somewhat. He ordered a suspension or time-out of three months on the special right to sue. Is that enough to keep the theme out of the elections for the EU parliament?

Frank Bsirske: With this pause for reflection, skeptics who reject this arbitration process should reflect and be convinced of the obviousness of this kind of investor protection. The direction in which these negotiations are driven should be changed.

Chlorinated chicken and hormone beef are dropped by the negotiators… The main goal is to harmonize norms. We can expect European standards to be lowered if the two great economic blocks have different standards.

Frank Brisske: You are right. So-called non-tariff trade barriers are primary, the adjustment of regulations and standards, liberalization of the service sector, the public job creation system and the aforementioned investor rights. These themes include chemical guidelines, standards for data protection, foods and environment protection where European regulations are more far-reaching than the US regulations. The question is on what level standards will be standardized. From my view, standardization must occur on the highest level as to consumer protection and environment protection. Everything else is trivial. Standards could be leveled here to a high degree. The extent to which the promised effects will occur is unclear where verbal tranquilizers are offered. A dangerous mixture is concocted. The European commission and politicians in Germany, the decision-makers in the government and the coalition are obliged to clear promises and essentials. If doubt arises here, the negotiations should be stopped and broken off because the dangers far outweigh the possible advantages.

Unions are impacted when worker rights gained over decades are now suddenly under review. Up to today the US has only acknowledged two of the eight core labor norms of the International Labor Organization. Pressure will come from the US to reduce labor laws or worker co-determination.

Frank Bsirske: Yes, freedom of association and rights of unions are restricted in the US. The extent to which this will be a theme of negotiations with the Americans by the EU commission is uncertain. Acknowledging the ILO core labor norms will not be a condition for the new agreement any more than observance of the target country principle, a commitment to the formula equal pay for equal work.

Great dangers threaten in another area that is hardly discussed in the general public, vital community necessities. What dangers do you see here?

Frank Bsirske: Non-tariff trade barriers will be removed, rules making market access difficult for business. How should the public procurement system be organized? Which areas should have the subsidiarity decision-making authority for the community? Should the most economical suppliers be given concessions? Will sewage disposal, waste disposal, education- and health services remain services in the public interest or will they be integrated?

This involves working conditions and quality of services and not only community self-government. Community authorities and their top associations defend the principle of subsidiarity so they can decide whether to carry out the services themselves or open them to the market. No restrictions of community self-government should occur in certain areas where the need for services in the public interest.

Frank Bsirske: The initiative “water is a human right” was very successful. This was the first European citizen initiative that fulfilled the necessary conditions. There were 1.7 million signatures of engaged citizens.

… Enormously high hurdles are not normally overcome…

Frank Bsirske: A very high hurdle exists because many countries must be included and minimum numbers of signatures must be gathered in the respective countries. Many people understand water as a human right. Marketing should be rejected for vital public necessities. Marketing could occur through the backdoor of a free trade agreement with the US.

The advantages are minimal and the disadvantages and sovereignty-limitations would be accepted.

Tens of thousands of jobs in rural farming are in danger. This arouses the covetousness of the agro-industry as we know from the US.

Frank Bsirske: Yes, removal of trade barriers could put the ecological small farming in Europe under the pressure of big agriculture from the US. That would not be in the ecological or economic interest of people in Europe. A legitimate protective interest for rural agriculture exists here.

You listed a whole series of disadvantages. Some German institutes predict 180,000 jobs. How reliable are these forecasts?

Frank Bsirske: The dimensions are important: 180,000 additional jobs in Germany in the next 10 to 20 years. The number is smaller in the annual total. Additional growth for the EU up to 2017 will be 0.5% and 0.4% for the US. These are the most minimal effects; the promises clearly shrivel.

Lower prices are emphasized. However experiences with free trade agreements have shows very often that such environed lower prices do not occur. Forecasts on the growth of real national income point to an increase between 0.27% and 0.48% by the year 2027 – a time period of 15 years. Let’s be honest. All this is based on very optimistic assumptions. In any case, this is not a reason to accept the disadvantages and sovereignty-limitations that are involved with this kind of trade liberalization.


Without the general public noticing, another trade agreement was negotiated in all secrecy, the trade agreement with Canada CETA (Comprehensive Economic Trade Agreement). Barroso and Canadian Prime Minister Harper announced this agreement was already completed. Jurists are harmonizing the sections. The CETA agreement allows American businesses with subsidiaries in Canada to use arbitrators from private corporate law offices to claim their special rights to sue states.

Frank Bsirske: Lone Pine, a Canadian oil- and gas business, is trying to do this through a US subsidiary. Ratification of the agreement is not the end of the negotiation… Anyone who sees this Investor-State arbitration procedure as an encroachment on sovereignty should not agree to the agreement. That is my hope and expectation for our delegates when an agreement that institutionalizes this kind of special jurisdiction in favor of private businesses is up for ratification.

Is that only your expectation and the expectation of Verdi or does it go beyond to other areas of the German union alliance?

Frank Bsirske: We discussed this in the German DGB union and took a common amicable position on this question. Rejecting such arbitration procedures and special jurisdiction is a necessary prerequisite for such an agreement like the demand to standardize on the highest level, the demand for the authority of the target country principle and the claim for transparency of a negotiation process. If one of these essentials is not guaranteed, the negotiations must be stopped or broken off.

That will be very hard to carry out with an 80-percent majority in the German Bundestag…

Frank Bsirske: We see in the papers from the German environmental ministry that ever larger circles are worried including many delegates on the national and European planes. A rejection front is developing that is absolutely necessary and justified in view of the non-transparency of the negotiation process.

There will also obviously be losers with this agreement, the developing countries. This is clearly stated in the Bertelsmann study on the TTIP agreement. A decline of per capital income of 4.0 or 4.1% is predicted for countries like Botswana and Mozambique. Won’t that promote discord in the world?

Frank Bsirske: Such forecasts speak for themselves and against these agreements.

Gus Van Harten, "Comments on the European Commission's Approach to Investor-State Settlement in CETA and TTIP," July 3, 2014, 55 pages\_Comments-id2466688.pdf

John Hilary, “TTIP: Charter for Deregulation, Attack on Jobs and End to Democracy,” February 2015, 58 pp

Scott Sinclair, "Investor-State Dispute Settlement," July 2014, 20 pp\_center\_for\_policy\_alt...

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