COMMON
RESOURCES
Invesor-sae rade dispues urn democracy on is head by making governmens more responsive o he prois o oreign companies han o he healh and saey o heir own ciizens. The Norh American Free Trade Agreemen (NAFTA) was he irs rade deal o include he invesor-sae dispue provi-sions.
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Ever since, he righ o oreign companies o challenge local governmens has been a hallmark o U.S. rade policy.
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A oreign company ha has “invesed” in a rading parner’s counry can sue or damages a an inernaional ribunal i i alleges ha a law or regulaion akes away is abiliy o earn expeced prois in ha counry.
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For example, i a oreign irm is harmed because a new environmenal law curbs polluion rom he irm’s plans, i could sue o recoup he los prois rom reducing is emissions or cleaning up is acories. Sae or local laws ha banned or even jus delayed he conrover-sial pracice o hydraulic racuring (racking) or naural gas could be a risk, as could sae effors o require labeling o oods made wih geneically engineered ingrediens. Companies already aggressively lobby Congress and he execuive branch agencies o limi oversigh and o block es-senial consumer and environmenal saeguards.
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Someimes companies even resor o local cours o preven regulaions rom going ino effec.
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The corporae ree rade invesor-sae provisions allow oreign companies o simply sue a counry, sae or localiy, challenging he laws o hese regions i he companies’ million-dollar lobbying effors don’ succeed in he poliical and regulaory arena. These suis are becoming more common, wih a record number o cases iled in 2012.
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Since NAFTA was signed in 1993, more han 500 cases had been iled as o he end o 2012.
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And here are many surprising places where hese cases are waged.
Philip Morris in Australia
In 2011, Ausralia passed a public healh law o discourage smoking by requiring he use o uniorm cigarete packaging o eliminae some o he branding and adverising ha is common on cigarete packs.
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All obacco sold in Ausralia would come in a plain, dark brown package, and 75 percen o he package would conain healh warnings, wih only he remainder allow-ing or he promoion o brand names and varians.
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For U.S. obacco company Philip Morris, he new Ausralian law mean ha he money he company had invesed in markeing is cigaretes was less effecive. The cigarete maker argued ha he branding isel was he core o he cigarete business.
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In recogniion o is “loss,” Philip Morris sued Aus-ralia.
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The cigarete maker lobbied he Ausralian parliamen o preven his sensible public healh law rom being passed, bankrolling a lobbying campaign agains he law.
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Afer losing in he legislaure, Philip Morris challenged he law in Ausra-lia’s high cour bu los here, oo.
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Having ailed in is previous atemps o sop his law, Philip Morris is now rying o overurn his public healh law using invesor-sae provisions in a rade pac beween Ausralia and Hong Kong.
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The invesor-sae challenge eliminaes all hose
Fast Tracking Corporate Power:
Investor-State Dispute Resolution and the TPP
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he Trans-Pacific Parnership (TPP) rade deal includes litle-known provisions ha allow companies o challenge as illegal rade barriers any governmen policies ha purporedly infringe on he companies’ profis. The conenious “invesor-sae dispue resoluion” allows a corporaion o sue federal, sae and local governmens if i believes ha a law or regulaion will negaively affec is botom line. Foreign companies or invesors could challenge regulaory safeguards ha proec our families, our communiies and our air and waer a a global rade ribunal ha could overurn he rule and award he invesor moneary damages.