A new pro-corporate tier to Australia's government and judiciary

The newly signed Trans-Pacific Partnership (TPP) includes a chapter that marks a turning point in the diminution of democratic sovereignty in Australia. Why is this?

A main reason is that the TPP for the first time allows powerful US corporations to sue federal and possibly state Australian governments before a panel of investment arbitrators whenever such corporations feel their investments in this country have been impeded by our democratically enacted laws and policies.

'Investments' under the TPP is very broadly defined and can include intellectual property.

We've been assured that social services, creative arts and decisions of Foreign Investment Review Board cannot be challenged, that non-discriminatory regulatory actions on health and the environment cannot be challenged by this mechanism as indirect appropriations except in 'rare' circumstances (not defined), that hearings will be open to the public and Australia can issue interpretations that must be followed (but without appeal if they are not).

There are no reciprocal TPP rights of our government to sue those corporations if, for example, they pollute or degrade our environment. There is no right of appeal, no obligation on those investment arbitrators to follow any body of precedent, let alone the norms on international law.

Such investment arbitrators have never found against a US corporation. Damages awards must be paid, otherwise trade sanctions apply and credit ratings are downgraded.

Why has our government agreed to this? The system of Investor State Dispute Settlement (ISDS) arose when investors needed protection from nationalisation in developing nations that lacked a strong rule of law. In the 1990s the US expanded ISDS rights for its corporations to Mexico and Canada, then unsuccessfully tried to make them global in a single treaty. That failed.

Australian PM John Howard kept ISDS out of the AUSFTA.

Now, the introduction of ISDS at the behest of US corporations into Australia raises stark policy issues for our societal virtues. How can, for example, Australia maintain justice, equity and environmental sustainability as dominant policy concerns if we allow powerful, cashed-up corporations to have the final say on what legislation we can pass?

What can be done?

Doing nothing in effect means we have acquiesced in a new wave of corporate colonisation. This will have major negative impacts on quality of life throughout our society.

If Australia's High Court follows the US Supreme Court's position enunciated last year, we may be required to apply the rulings of investment arbitrators without reexamining the merits.

This raises further profound questions about erosion of the Constitutional constraints on judicial power in Australia. The TPP's ISDS rights also will allow corporate lobbyists to push for wages and conditions to be eroded as they impede corporate investments.

Education, health, postal, communications, defence and correctional services likewise should be privatised because that enhances shareholder income.

Corporations will be allowed to minimise tax because that increases the value of their investments.

Corporations must be permitted without restriction to fund election campaigns and to restrict whistleblowers who use computers to reveal fraud as that also enhances their investments.

If however an Australian government chooses to oppose this corporate colonisation process, what practical steps can be taken in the short and long term?

First, it should initiate economic surveys on just what benefits our society is getting from deals such as the TPP to counterbalance their deleterious impacts. If such research shows little positive effects, then progressive governments should suspend ISDS obligations under the deal. When foreign corporations invest in Australia it should be written into their contracts that this is our government's position.

Second, the European Union is proposing that investment arbitrators be prohibited from acting as advocates in investment related cases during their tenure as judges and that an investment appeals court be created. This does not go far enough.

The process of investment arbitration should be made coherent with international law. Investment arbitrators under the TPP should be required to be serving judges drawn from the respective highest courts of the TPP nations. They should be required to take into account the wider legal and policy context of laws being challenged by the corporations.

States should be allowed to use the ISDS system to sue corporations whose activities, for example, are alleged to have a major negative impact on public health or the environment. Appeals should be allowed from ISDS tribunals to organisations such as the International Court of Justice (ICJ).

Third, an international treaty should link trade sanctions with reform in corporations law. Such reforms could clarify that corporations are not entitled to the same legal protections as real people.

It could require corporations to be 'married' to an approved public good as a condition of yearly registration. It could require corporations pay an acceptable minimum of tax on capital while operating in a nation. It could allow the introduction of very low global tax on financial transactions.

It could provide a transference of funds form such a tax to support global distribution at the community level of  third wave renewable energy and food technologies such as global artificial photosynthesis (GAP). Such technology will allow every human-made structure on the earth's surface to make hydrogen by using sunlight to split water but also ammonia fuel and fertiliser by absorbing atmospheric nitrogen and fertiliser biochar through atmospheric carbon dioxide reduction. It will facilitate a profound ethical shift as human beings collectively try to 'pay their own way' in terms of supporting the global ecosystem and leave behind corporate colonisation strategies such as those involving ISDS in the TPP.