TransCanada Goes Legal On US Government Over The Rejection Of Keystone; Will It Wake Obama To The Problems Of Corporate Sovereignty?
from the wake-up dept
Over the last few years, there's been a big controversy over the Keystone XL pipeline project, a massive planned project to build an oil pipeline from Canada to the US that many folks had been protesting, and which (after years and years of debate), President Obama finally rejected a few months back. That's not a topic that we've really covered here, other than a single mention when we questioned why the FBI had spied on activists protesting the potential pipeline.However, things got... interesting yesterday, as TransCanada initiated a corporate sovereignty claim against the US government over the rejection of the project. As we've been explaining, corporate sovereignty provisions in trade agreements (usually officially called "investor state dispute settlement" or "ISDS" -- in part because it's so boring many people ignore what it's really about) provide a way for foreign companies to effectively "sue" foreign governments over regulations they dislike -- including regulations that negatively impact "expected profits."
Even worse, it's not a real "court" that deals with these things, but a tribunal of folks, some of whom may have other dealings with the companies.
One of the most egregious examples of this is the ongoing corporate sovereignty claim made by drug maker Eli Lilly against the government of Canada, demanding $500 million, because Canadian patent laws rejected two Eli Lilly patents for not really doing anything new. Eli Lilly claimed that this "expropriated" its expected profit, and thus initiated a claim.
President Obama has been waving off concerns about corporate sovereignty/ISDS for a while now, noting that it's rarely been used against the US government, and that the US government had so far won all such claims. That's true. But, this is a big one -- and it might not end the same way. TransCanada is demanding $15 billion, claiming this is the "lost value" due to the rejection of the plan. And including these provisions in giant new agreements like the TPP (with Pacific rim countries) and TTIP (with Europe) will mean opening the floodgates.
Think about how crazy this is: Any time a company "invests" in plans to do something, that are later made impossible (or difficult) due to a regulatory decision, the (foreign) companies can basically demand payment. That puts a massive burden on any attempt to regulate anything in regards to how corporations act, even if new information has come to light, or people have recognized how existing regulations are problematic. These provisions will make it nearly impossible to even contemplate fixing copyright or patent laws, because companies will just make claims arguing that such changes destroy "expected" profits.
And now, big time champion of corporate sovereignty/ISDS, President Obama, is facing an ISDS claim that could cost American taxpayers $15 billion. Just for deciding that a giant oil pipeline isn't a good idea. Why would any country ever willingly submit itself to such conditions?
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Filed Under: corporate sovereignty, isds, keystone, keystone xl, nafta, tpp, ttip
Companies: transcanada
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No
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Because we are lead by a bunch of
F#$%^ING MORONS
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Re:
FTFY. They are not stupid. Just corrupt.
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Re: Re:
FTFY. They are not stupid. They're not necessarily corrupt. But corrupt or not, they aren't giving (enough) thought to the consequences of their actions.
I'll remind you that even when legislators do give thought to the consequences, there are plenty of people out there willing to twist the wording of the law to fit their own agenda.
And they aren't all spooks. Claims can be made about deregulation (IE getting rid of laws) and consequences thereof. Even a well thought out law can have unintended consequences and perverse incentives. So in a way, we're damned if we do, and damned if we don't.
Corruption is easy to point out, though: money is speech, and legislators tend to hear the loudest voices.
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FTFY
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This isn't good but what does it matter?
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Re: This isn't good but what does it matter?
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Re: This isn't good but what does it matter?
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You are looking at the next big thing for what were once known as patent trolls because this is where the big money is. They will no longer consider a few million as anything but nickle and dime. What's a couple of million against billions?
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Earlier: "Bush won't face this. He'll be out of office by the time it gets going. He'll sign his little pet trade bill and march off into the distance without a care of what it does."
(The fight over Keystone predates Obama's presidency. So does NAFTA. So do TPP negotiations, if that's what you refer to him signing.)
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So... no hope of any change?
Bush = Obama
Obama = Bush
Its funny how much each side likes to bitch about the other side while their side does the same fucking thing!
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Imagine if W had not been put in place, would US soldiers be in the middle east? Granted, the market crash would still have happened but I doubt the prolonged Iraq war would have been initiated.
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Typical government
Because we don't care about other governments / countries, as long as we benefit.
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https://en.wikipedia.org/wiki/Canada%E2%80%93United_States_softwood_lumber_dispute
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We Can Seize the Canadian Holdings of US Corps
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- The Port Hawkesbury mill in Nova Scotia goes under thanks to the downturn in the industry. (Less glossy flyers and magazines, thanks to the internet.)
- The Nova Scotia government steps in because jobs, and pays to keep the mill in ready condition for a buyer.
- The new buyer is found a year later. The government agrees to subsidize the operation to the tune of $124 million over 10 years.
- Meanwhile over in Quebec, Resolute Forest Products shuts down the 126-year-old Laurentide mill. Naturally, they blame the continued existence of the Nova Scotia plant.
- Never mind the downturn in the market in general. Which had recently sank AbitibiBowater, which then became Resolute Forest Products with the assistance of lots of Canadian government money.
- Never mind that the Canadian mills are having trouble competing thanks to Americans mills getting $8 Billion in tax credits.
- And never mind that Resolute Forest Products is a Canadian company based in Montreal. Show foreign investment, and you can sue your own government under ISDS rules.
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My killer idea for cashing in on the ISDS
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China has embraced capitalism. The US has embraced mass domestic spying, become a torture state, armed its police with military weapons and made them unaccountable, and made those who control the money exempt from legal penalties. ISDS gives investors final word over public safety, environmental issues and more. Corporations are allowed unlimited election spending.
Rather than the Cold War's Mutual Assured Destruction, China and the US have found middle ground with authoritarian capitalism.
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We expected our porn was going to make millions, copyright trolling.
We expected our tobacco imports would make millions, they forced us to show the real dangers.
We expected that this tiny change to our pharmaceutical would let us lock the price in at 1000x the cost.
We expected, so you owe it to us.
When are we going to stop allowing the teenager mentality to rule over everyone?
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At that point, the babies will be put in the corner.
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Zero sum
This should round out to 0$
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Hey Canada,
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Re: Hey Canada,
However they do have a long list of ISDS issues - American investors suing Canada - which you can turn and shove by yourself.
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Re: Re: Hey Canada,
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Re: Hey Canada,
"Coke makes kids fat" F%ck off America.
Transcanada is a corporation. Ownership is most likely multinational....
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Re: Hey Canada,
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This pipeline and corporate soverignty
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Re: This pipeline and corporate soverignty
If so why?
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Just quit it!
I keep reading here how Obama and the Dems are corporate puppets and that isn't true. The Dems are for the little guy and everyone knows that, especially the media. So for anyone to say otherwise is ludicrous. So please, just quit it.
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Re: Just quit it!
Since past actions would disprove such a notion, if you relied on the past to expect what the future will bring.
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Re: Just quit it!
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The most amazing part of this story
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Re: The most amazing part of this story
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It is probably just a tax thing.
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The pipeline would NEVER be profitable if it was built today
Before oil prices fell even more, a number of news analysts pointed out that TransCanada would be losing $10 for each barrel of oil they sold at market value from the tar sands. Given how oil prices have fallen even more since then, they'd no doubt be losing even more money per barrel at today's prices.
The fact is, we've known about oil in tar sands for many decades. No one's actually drilled for it until the last decade because it wasn't economically viable to extract it.
Yes oil prices will go up enough eventually to allow keystone to be profitable. But that will likely take years if you look at oil analysts current projections on oil prices. So TransCanada can hardly say they were guaranteed $15 billion in profits from the pipeline.
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Re: The pipeline would NEVER be profitable if it was built today
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Re: Re: The pipeline would NEVER be profitable if it was built today
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Re:
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new plan...
2. Make plans to build the US Canal, a waterway directly through the US to ship goods from California to New York at much lower cost than other freight methods.
3. Sue US in ISDS when they won't allow me to build a canal through the middle of the country.
4. PROFIT... cha ching.
Nobody said the plans had to be viable or even possible. Other options would be to plan to build a space elevator from the top of the empire state building, building a matter teleportation device in the middle of DC, I mean there are just so many plans that would generate me billions and billions of dollars if the US would just let me do them, but since they won't I'll just sue and make billions from the ISDS tribunal.
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Re: new plan...
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Do I have your vote?
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political maneuvering
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Exploitation 101
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Re: Exploitation 101
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I could be wrong, but probably not.
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Still Perplexed
- Is it "corporate sovereignty" or "government accountability"? I see little difference between enforcing government promises and those made by individuals or corporations.
- That these agreements can make it expensive or difficult to democratically pass legislation or regulations is beside the point. The country, through its leaders, bound the government to a course of action. Why should it not pay for violating those promises?
- We make the U.S. government pay for violating its promises (including most contractual promises) via the Administrative Procedures Act all the time. Or, similarly, what do you consider suing for violations of civil liberties?
- "Expected profits" are the default form of damages in Anglo-American contract law. It is designed to put the party suffering from the breach of contract in the position she would be in absent the breach. This mode of calculations encourages "efficient breach" of contract.
- Per above, if it efficient for the U.S. to "breach" a contract due to policy preferences/new information, it should do so. And can do so. If it pays for breaking its promises.
- If the politicians are corrupt, having legislation or regulations overrode by international arbitration isn't counter-democratic but rather ambivalent to democracy.
- Most attacks on international arbitration methodology apply to all treaties. Compare the power of an international commercial arbitration tribunal with the ICJ. Maybe you like neither.
I've taken part in ICSID disputes. Protecting basic contract rights, and forcing the state (via taxpayers) to pay when breaching those contracts merely inflicts accountability on governments--much as we want in most other areas.
Of course, if you think governments should be able to break contracts (what about the social contract?) with impunity, "corporate sovereignty" is indeed a problem.
I'm not sure why Mike is on the other side of this policy item, although I see why one could hold the position.
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