Shitbirds Of A Feather Flock Together: ICE Signs $274,000 Contract With Clearview

from the voted-Most-Hateable-for-two-years-running! dept

ICE continues to not care what anyone thinks of it. Its tactics over the past few years have turned it into one of the federal government's most infamous monsters, thanks to its separation of families, caging of children, unfettered surveillance of undocumented immigrants, its fake university sting created to punish students trying to remain in the country legally, its sudden rescinding of COVID-related distance learning guidelines solely for the purpose of punishing students trying to remain in the country legally… well, you get the picture.

Perhaps it's fitting ICE is buying tech from a company that appears unconcerned that most of the public hates it. Clearview -- the facial recognition software that matches uploaded facial images with billions of images scraped from the open web -- is one of the latest additions to ICE's surveillance tech arsenal.

Immigration and Customs Enforcement (ICE) signed a contract with facial recognition company Clearview AI this week for “mission support,” government contracting records show (as first spotted by the tech accountability nonprofit Tech Inquiry). The purchase order for $224,000 describes “clearview licenses” and lists “ICE mission support dallas” as the contracting office.

That its new partner is being sued in multiple states (including a suit filed by the Vermont Attorney General) doesn't appear to concern ICE, which is itself often on the receiving end of lawsuits. Clearview may be making good on its promise to pull out of the private market and sell only to government agencies, but that just means it will be only governments using unproven AI and scraped images to pursue investigations and arrest people.

Clearview's statement to The Verge about its contract with ICE makes it appear this is all about the children:

“Clearview AI’s agreement is with Homeland Security Investigations (HSI), which uses our technology for their Child Exploitation Unit and ongoing criminal investigations,” Clearview AI CEO Hoan Ton-That said in an emailed statement to The Verge. “Clearview AI has enabled HSI to rescue children across the country from sexual abuse and exploitation.”

Clearview leans on the children here, but the statement says a couple of other interesting things I'm sure Ton-That would rather slide by unnoticed. First: "and ongoing criminal investigations." ICE considers every undocumented immigrant to be a criminal, which means the agency is going to use this software to track down people in the US for committing the civil violation of staying in the country without the proper paperwork. ICE has not been able to find enough dangerous immigrants to make the administration's public statements about rampaging hordes of bad hombres come true, so it has decided to go after everyone, including students here on visas.

Second, Clearview claims it has "enabled" HSI to "rescue children across the country." I'd say we'd just have to take its word on this but we certainly don't have to take its word on this because it's said things like this in the past only for the named law enforcement agency to contradict Clearview's claims when asked for comment. That may be what Clearview hopes its partnership with ICE/HSI will do, but it's difficult to believe the recently signed contract has already produced results or that ICE/HSI are really using this mostly to fight child sexual exploitation rather than just uploading photos of brown people and hoping for hits.

Either way, we can safely conclude both partners here suck. ICE is bad and keeps getting worse, and Clearview isn't ever going to improve and is presumably still scraping sites for "content" it can sell to its customers.

Filed Under: dhs, facial recognition, for the children, hsi, ics, surveillance
Companies: clearview, clearview ai

Top Court Rules CETA's Lipstick-On-A-Pig Version Of Corporate Sovereignty Is Compatible With EU Law

from the it-may-be-legal,-but-is-it-moral? dept

Techdirt readers with good memories may recall the long saga of the EU-Canada Comprehensive Economic and Trade Agreement (CETA). One important moment was when Canada agreed to use the EU's proposed replacement for corporate sovereignty, the Investor Court System (ICS). Both are versions of so-called "investor-state dispute settlement" (ISDS), which allows companies to sue countries for alleged losses caused by government decisions. Although ICS was devised in order to blunt the growing criticism of traditional ISDS, it amounts to little more than lipstick on a pig. It still gives foreign investors unique legal privileges not possessed by local companies. However, as part of the deal to persuade the Belgian region of Wallonia not to veto CETA, the EU agreed to allow Belgium to ask the region's top court to rule on whether the new ICS was compatible with EU law.

As is usual in such referrals, one of the top legal advisers of the Court of the Justice of the European Union (CJEU) offered a preliminary opinion. In this case, Advocate General Yves Bot found that the ICS was compatible with EU law. The main CJEU has now issued its own judgment (pdf), essentially agreeing with Bot on every point. The key ruling is that, according to the CJEU, the ICS won't be able to overturn EU decisions:

the CETA contains provisions that deprive those [ICS] tribunals of any power to call into question the choices that have been democratically made within a Party to that agreement in relation to, inter alia, the level of protection of public order or public safety, the protection of public morals, the protection of health and life of humans and animals or the preservation of food safety, protection of plants and the environment, welfare at work, product safety, consumer protection or, equally, fundamental rights. Consequently, that agreement does not adversely affect the autonomy of the EU legal order.

That seems a little naive. It may be true, from a strictly legal point of view, but it ignores the reality of the situation. Even if the ICS cannot force an EU Member State to amend its laws, or change its decisions, it can impose fines for the "losses" an investor may suffer because of those moves. In such cases, a government may decide that it would rather repeal the law or cancel its decision than pay hundreds of millions of euros in fines. Even the threat of losing may be enough to convince governments to back down -- exactly as has happened many times with traditional ISDS. However, the Stop ISDS campaign points out:

The case against ISDS (or its rebranded version ICS) has never been primarily a legal one. It is a moral one.

ISDS allows multinational companies access to an obscure, parallel justice system closed to the rest of us. Calling it a court system for the 1% would be generous. It is really a court system for the 0.01%.

ISDS has allowed corporate interests to trump those of the public time and time again. Countries have been threatened for passing pollution regulations, approving health and safety measures and for hitting the pause button on fracking. It has been used to defend land grabs, environmental destruction and lock in privatisation of key public services.

None of these arguments depend on the opinion of the ECJ. The moral case is as strong as ever -- ISDS must go.

That's not a hopeless aspiration. As Techdirt reported earlier this year, the EU has already announced that corporate sovereignty claims can no longer be brought over internal EU matters. Meanwhile, the US seems to be cooling on the idea. So while the ICS has been blessed by the CJEU, it may be that corporate sovereignty is on the way out anyway.

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Filed Under: canada, ceta, cjeu, corporate sovereignty, ics, investor court system, isds

Top German Judges Slam EU Plans To Create Global Court To Enforce Corporate Sovereignty

from the let's-just-make-up-the-laws-as-we-go-along dept

A few weeks ago, we wrote how many -- even the US Trade Representative, Robert Lighthizer -- seem to think it's time for corporate sovereignty, also called "investor-state dispute settlement" (ISDS), to go. For some reason the European Commission disagrees. As Techdirt readers may recall, after receiving a bloody nose in a public consultation about corporate sovereignty, the Commission announced to great fanfare that it was "replacing" ISDS with something called the Investment Court System (ICS). In fact, this amounted to little more than putting lipstick on the ISDS pig, since ICS suffered from the same fundamental flaw: it gave companies unique rights to sue countries in a supra-national court. The EU is still plugging away at the ICS idea, and it now wants to go further by creating a truly global corporate sovereignty system enforced by a new Multilateral Investment Court (pdf), an initiative formally launched a couple of months ago:

the [EU's] approach since 2015 has been to institutionalise the system for the resolution of investment disputes in EU trade and investment agreements through the inclusion of the Investment Court System (ICS). However, due to its bilateral nature, the ICS cannot fully address all the aforementioned problems. Moreover, the inclusion of ICSs in [EU] agreements has costs in terms of administrative complexity and budgetary impact.

The multilateral investment court initiative aims at setting up a framework for the resolution of international investment disputes that is permanent, independent and legitimate; predictable in delivering consistent case-law; allowing for an appeal of decisions; cost-effective; transparent and efficient proceedings and allowing for third party interventions (including for example interested environmental or labour organisations).

When the ICS was first proposed, the German Association of Judges, which Wikipedia describes as "the largest professional organization of judges and public prosecutors in Germany", ripped it to shreds. The same august body has just meted out similar treatment to the Multilateral Investment Court, and has asked the German government "to deny the European Commission the required mandate to negotiate the establishment of a Multinational Investment Court (MIC)."

The document, originally in German, and available in an unofficial translation by EuroMinds Linguistics (pdf), contains a devastating analysis of the MIC and its flaws. For example, it points out that international investment protection law is characterized by a "lack of substantive law principles". That is, there are no global investment laws that the MIC could apply when deciding cases. The MIC would effectively be making it up as it went along. The German Association of Judges points out why the situation would be even worse for the MIC than for the ICS or ISDS tribunals:

Because of [the arbitration courts'] position, they can override decisions of national administrations and courts in favour of an investor. This exercise of power, exercised by an arbitral tribunal, has thus far been limited to the enforcement of individual arbitral awards. However, it would be considerably strengthened if the arbitral tribunals were upgraded to an MIC with permanent jurisdiction, which would operate under an international convention. Together with the investment protection agreements, as part of European law, the MIC Convention will be recognised by international law and can thus bind national courts. This will make the MIC a standard-setting organization.

In other words, the MIC would be able to create what amount to global laws, without any democratic input or scrutiny. The document also explains -- as many have before -- why special investor courts are unnecessary:

The protection of individual goods, including those of investors, is the daily work of the judges of all judicial courts and instances. In principle, these rights can also be claimed by foreign investors.

...

the best investor protection is a functioning, uncorrupted administration and jurisdiction and a democratic legislative process. It is the task of every investor to determine this; they can avoid investments in countries that do not fulfil these standards. If they, nonetheless, take the risk, no special protection is necessary.

Obvious really.

Recognizing that the German government and European Commission will probably try to go ahead with the MIC initiative anyway, the German Association of Judges makes a number of sensible suggestions for improving the idea, and limiting the possible damage. However, the real solution would be for the EU to join other, wiser nations and abolish the system completely.

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Filed Under: corporate soveregnty, eu, ics, isds, trade agreements

New FCC Boss Decides It's Cool If Phone Monopolies Want To Rip Off Inmate Families

from the man-of-the-people dept

For decades, inmate calling service (ICS) telcos have charged inmates and their families upwards of $14 per minute for phone calls without anybody giving much of a damn. Because these folks are in prison, and as we all know everybody in prison is always guilty, drumming up sympathy to convert into political momentum had proven difficult. But after decades of activism, the FCC intervened in 2013 and again in 2015, voting to cap the amount companies can charge the incarcerated for intrastate phone calls. This resulted in a firestorm of complaints from these companies, which not only get to rip off inmates, but have all too cozy and often not particularly legal relationships with law enforcement.

One of the more vocal ICS outfits, Securus, quickly sued the FCC, going so far at one point as to claim that inmates would riot if the company wasn't allowed to continue overcharging inmates and their families. Securus, Global Tel*Link and other providers challenged the FCC's intrastate rate caps in the US Court of Appeals for the DC Circuit, claiming the agency lacked the adequate authority to set caps and that the rates were too low. And for the last several years, the FCC had been working to defend its actions in court.

That all changed last month, when Donald Trump pegged Ajit Pai to head the FCC. Pai and former Commissioner Mike O'Rielly had consistently voted against defending inmates from monopoly overcharging. And just days after giving a speech in which he professed his selfless dedication to closing the digital divide, Pai effectively decided to pull the rug out from underneath FCC Deputy General Counsel David Gossett, who had been defending the FCC's action in court. In a brief filed by Gossett last week (pdf), he notes that he was ordered to no longer defend the FCC's intrastate calling cap:

"As a result of these changes in membership, the two Commissioners who dissented from the Order under review—on the grounds that, in specific respects, it exceeds the agency’s lawful authority—now comprise a majority of the Commission," Gossett wrote. Gossett is thus no longer authorized to defend the FCC's previous contention that it "has the authority to cap intrastate rates for inmate calling services" and cannot defend the FCC's assertion that it "lawfully considered industry-wide averages in setting the rate caps contained in the Order," he wrote."

Despite Pai suddenly undermining the agency's own lawyers, all is not lost quite yet:

"Gossett said he will continue to defend other parts of the commission's October 2015 order, which also lowered the price of interstate calls, those that cross state lines. Despite the FCC's various losses, a 2013 decision to set interim rate caps of 21¢ to 25¢ per minute for interstate calls has survived court challenges...The FCC's decision to stop defending the full order hurts the case for maintaining rate caps on intrastate calls in which both parties are in the same state, but it doesn't completely kill the case. The FCC is ceding 10 minutes of its allotted argument time to attorney Andrew Schwartzman, who is defending the rate caps on behalf of prisoners' rights groups."

It's worth reiterating that voice services these days cost very little to actually provide. Also keep in mind that Securus and other such companies are part of a dangerously cozy and captive market, where prisons get paid upwards of $460 million annually in "concession fees" (read: kickbacks) to score exclusive, lucrative prison contracts. In this comically absurd environment, the service pricing and quality are just about what you'd expect. Government oversight of these businesses have been virtually non-existent, in part thanks to accusations that these companies have allowed some law enforcement to monitor what should be privileged attorney client communications.

The fact that making it easier to rip off inmates was new boss Pai's first move in office should tell you plenty about just how far his dedication to "closing the digital divide" is going to go. That's before you realize that Pai's other early actions have involved preventing 9 pre-approved ISPs from helping the poor, killing an FCC plan to bring competition and cheaper rates to the cable box, and killing all FCC Net neutrality enforcement moving forward. With friends like these...

Filed Under: ajit pai, fcc, ics, inmate calling service, phone calls, prisoners
Companies: global tel*link, securus

EU-Canada Trade Deal Dodges Belgian Veto For Now, But Faces Multiple Legal Challenges

from the just-buying-some-time dept

A few days ago we described how the Belgian region of Wallonia was holding up the official signing of the EU-Canada trade deal, CETA, in part because of the corporate sovereignty chapter it contains. Not surprisingly, given the high-profile embarrassment this caused -- Canada's prime minister, Justin Trudeau, was forced to cancel his planned trip to Europe at the last minute -- the Walloon politicians have been under intense pressure to change their minds in return for some concessions. This they have now done, and a document has been published spelling out the nature of the deal they have obtained (currently only available in French and Dutch). The Council of Canadians suggests that the EU has not solved the problem, just bought some time:

The proposed compromise would give any region of Belgium the right to walk out during any part of the ratification process [which is still required, even after CETA has been signed]. Four Belgian Parliaments (the Walloon region, the French community, the German community, and the Francophone community commission of the Brussels Capital region) have made it clear that they will never ratify the Investment Court System (ICS) -- the provision that allows foreign investors to sue governments -- in its current form.

Wallonia's minister-president, Paul Magnette, came away with something else, too:

Magnette had also raised objections to the proposed court system for settling disputes between foreign investors and governments.

One concession he won means Belgium would be able to go to the European court of justice to determine whether the new investor-state special tribunals are compatible with EU law.

That's potentially big. Back in 2015, lawyers from the environmental group ClientEarth carried out an analysis of the corporate sovereignty approach -- both the older investor-state dispute settlement (ISDS) and the re-branded ICS -- and found that:

ISDS mechanisms would set up an arbitration system outside of, but binding on, the EU judicial system. Such mechanisms would introduce an additional judicial relief within the EU legal order that is independent of the EU courts. It would, in effect, be a system that would enable foreign investors to sideline the EU courts and resort to claims that are not available to domestic investors.

EU law, and settled case-law of the European Court of Justice (ECJ), suggest that such a system of external judicial control may be incompatible with the EU legal order because it would (1) undermine the autonomy of the EU legal order and the powers of the EU courts in particular and (2) negatively affect the completion of the internal market, and more specifically the EU competition rules.

Of course, some will dismiss that as simply the biased opinion of an activist organization. It's harder to ignore the views of 100 law professors from across Europe, who agree with ClientEarth, or the warning of the UN rights expert, Alfred de Zayas, not to sign the "flawed" CETA treaty, as he calls it. And "biased" certainly won't be something anyone could ever say about an ISDS ruling from the Court of Justice of the European Union (CJEU), the EU's highest court, which will be definitive once it is handed down. It will also apply to any trade deal that includes corporate sovereignty, such as TAFTA/TTIP, which is why Magnette's last-minute haggling turns out to be so important. One hint of how the CJEU might view matters is provided by the following:

ClientEarth recently launched a lawsuit against the Commission, because it refused to disclose official analysis of whether ISDS and ICS are legal. The Commission said sharing the legal reflections would undermine its negotiating position in trade agreements.

It's hard to see how an analysis that found ISDS and ICS were legal would weaken the EU's negotiating position. And it would surely be in the European Commission's interest to convince everyone that corporate sovereignty is, indeed, legal by releasing analyses supporting that view. So the fact the EU refuses to release them would naturally suggest that there is a problem somewhere, which presumably the CJEU will reveal when it comes to examine the issue.

Although the most important, the referral to the CJEU is not the only legal challenge that CETA is facing. There's one in Canada, too:

Canada's longest-serving member of the Queen’s privy Council, the Honourable Paul Hellyer, P.C., along with two co-plaintiffs, Ann Emmett and George Crowell, both prominent members of the Committee on Monetary and Economic Reform ("COMER"), launched a constitutional challenge against the much-maligned Canada-Europe Trade Agreement ("CETA"), at the Federal Court of Canada today.

Here's what they hope to obtain:

In addition to seeking several declarations, to clarify the Constitutional authority of the Executive branch of government to do this, the Plaintiff's also seek interim injunctions to prevent the federal government from signing, ratifying and implementing the CETA.

Finally, it's worth noting that there is also a constitutional challenge to CETA in Germany. On that front, the following happened a couple of weeks ago:

In its judgment pronounced today, the Second Senate of the Federal Constitutional Court rejected several applications for a preliminary injunction directed against the approval by the German representative in the Council of the European Union of the signing, the concluding and the provisional application of the Comprehensive Economic and Trade Agreement (CETA), which the Council of the European Union is expected to decide upon on 18 October 2016.

However, that's not as bad as it might seem at first sight. First, Germany's constitutional court imposed some quite stringent constraints on the German government. The most important of these is that the official signing of CETA will not cause the entire text to be applied provisionally, as the European Commission had originally hoped. Instead, some parts must wait until all 28 member states ratify the deal through votes in their national parliaments. That's going to take quite a while -- perhaps years -- and there's no guarantee that every country will ultimately ratify CETA. The corporate sovereignty provisions are one of the elements that will not come into force until after full ratification, something also agreed with Magnette. This means it's quite likely that the CJEU will hand down its verdict on the legality or otherwise of ICS before that, possibly killing it forever.

The other important point about the German constitutional court's decision is that it only rejected a request for a preliminary injunction, which it deemed unnecessary. The German court's full consideration of whether CETA is constitutional or not continues. The European Commission may have postponed the Wallonian problem but there are plenty of others on both sides of the Atlantic that could still stop CETA, and definitively.

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Filed Under: belgium, canada, ceta, cjeu, corporate sovereignty, eu, eu law, human rights, ics, isds

Corporate Sovereignty Helps To Bring EU-Canada Trade Deal To Brink Of Collapse

from the politically-toxic dept

The trade deal between the EU and Canada, known as CETA -- the Comprehensive Economic and Trade Agreement -- is remarkable for the fact that it has still not been signed and ratified, even though its completion was "celebrated" over two years ago. That's partly because of growing resistance to the inclusion of a corporate sovereignty chapter -- also known as investor-state dispute settlement (ISDS). In an attempt to head that off, the European Commission persuaded Canada to swap out vanilla ISDS for a new, "improved" version called the Investor Court System (ICS). As Techdirt noted before, this is really just putting lipstick on the pig, and doesn't change the fact that companies are being given unique privileges to sue a country for alleged harm to their investments using special tribunals, as well as in national courts.

CETA has faced other problems, notably from Bulgaria, Romania and Belgium. The first two said they wouldn't sign because of Canada's refusal to lift visa requirements for their citizens. That blackmail seems to have paid off. The Sofia Globe reports that Canada has agreed to remove the visa requirements from December 2017, and Bulgaria and Romania now say that they will sign CETA.

That leaves Belgium, or more precisely, the French-speaking Belgian region of Wallonia, which, as we noted back in April, was not happy with CETA. A couple of weeks ago, the Walloon parliament confirmed that it would refuse to give its permission for the central government to sign CETA in its name (original in French). Because of the way the Belgian political system works, that meant that Belgium would not be able to sign CETA on October 27, as the European Commission had originally hoped.

That, in its turn, meant that the European Union as a whole would not be able to sign CETA on that day. That's because back in July, European Commission president Jean-Claude Juncker agreed to treat CETA as a so-called "mixed agreement," a deal that must be ratified by all of the EU member states' national assemblies, as well as by the bloc. If Belgium can't do that because of Wallonia, CETA is blocked.

As you might imagine, the Walloons have come under intense pressure to change their mind, from just about the entire EU and Canadian political establishment. Last Friday, Wallonia's Minister-President Paul Magnette told the regional parliament that he still refused to allow Belgium to sign, despite that pressure. As well as being worried about the impact of Canada's agricultural products on Walloon farmers, Magnette singled out corporate sovereignty as a particular worry for him and his colleagues.

The fact that CETA's ISDS/ICS remains the most problematic area can be seen from a fascinating CETA document (pdf) that was recently leaked. It's called the "Joint Interpretative Declaration on the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and its Member States," and is an attempt to offer additional guarantees that are enough to convince Magnette and other CETA skeptics to allow its signing and ratification:

This interpretative declaration aims to provide a clear and unambiguous statement of what Canada and the European Union and its Member States agreed in a number of CETA provisions that have been the object of public debate and concerns. This includes, in particular, the impact of CETA on the ability of governments to regulate in the public interest, as well as the provisions on investment protection and dispute resolution, and on sustainable development, labour rights and environmental protection.

The section on Investment Protection is by far the longest, reflecting the seriousness of the problems there. Here's a key paragraph:

CETA clarifies that governments may change their laws, regardless of whether this may negatively affect an investment or investor's expectations of profits. Furthermore, CETA clarifies that any compensation due to an investor will be based on an objective determination by the Tribunal and will not be greater than the loss suffered by the investor.

As that demonstrates, there is nothing new in the declaration. Nobody is claiming that CETA will stop governments changing their laws, just that the massive fines that can be imposed by supra-national tribunals are likely to discourage them from doing so. Similarly, claiming that those fines will be "based on an objective determination by the Tribunal and will not be greater than the loss suffered by the investor" simply confirms the untrammelled power of the tribunal to impose whatever fine it thinks is appropriate.

As of this weekend, Magnette was still holding out for more guarantees. He has said that he is not against CETA in principle, but does want improvements to it, which offers the European Commission a way out of this crisis that they will surely try to seize. If the interpretative declaration is changed sufficiently, Magnette may be willing to give permission to Belgium to sign.

However, there's another factor. In the face of the continuing problems on the EU side, the Canadians seem to be close to calling the whole thing off. As the Guardian reported:

A landmark trade deal between the European Union and Canada is in meltdown, after Canada's trade minister walked out of talks with the Belgian regional parliament that has been blocking the deal.

The Canadian trade minister, Chrystia Freeland, was on the verge of tears on Friday as she announced the "end and the failure" of talks with the Walloon government.

However the head of the European parliament said late on Friday he would hold emergency talks in a bid to save the deal.

As that indicates, EU politicians are still trying to patch things up, but it's unlikely that Canada will be willing to make yet more concessions to satisfy Magnette. For his part, he said on Sunday night that he was "disappointed" with the Commission's latest attempt to convince him to accept CETA's ISDS (original in French). In any case, it looks increasingly likely that CETA will not be signed on October 27, and that Canada's prime minister, Justin Trudeau, will not be traveling to Europe to do so, which would be a huge diplomatic embarrassment for the European Commission. Corporate sovereignty may not be the only reason CETA is falling apart, but it is certainly one of the main ones. The twists and turns of the Walloon saga confirm just how politically toxic it has become.

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Filed Under: belgium, canada, ceta, corporate sovereignty, eu, ics, isds

Prison Telco Claims Prisoners Will Riot If Company Can't Keep Overcharging Inmate Families

from the amoral-majority dept

For many, many years interstate inmate calling service (ICS) companies have charged inmates and their families upwards of $14 per minute for phone calls. Because these folks are in prison, and as we all know everybody in prison is guilty, drumming up sympathy to convert into political momentum had proven difficult. But after decades of activism the FCC intervened last year, voting to cap the amount companies can charge the incarcerated. According to the FCC's updated rules, ICS companies can no longer charge more than twenty-two cents per minute -- depending on the size of the prison. Caps were also placed on the fees companies could charge those trying to pay these already bloated bills.

The companies profiting off of ripping off the incarcerated have unsurprisingly been fighting the FCC's proposal tooth and nail in the courts. Global Tel*Link (GTL) and Securus Technologies managed to win a partial stay earlier this month (pdf) that put the FCC's per minute price caps on hold until a lawsuit against the FCC is decided. FCC lawyers have argued (pdf) the stay still lets them apply older (2013) interim price caps on interstate calls to intrastate calls until the case is settled.

In response, Securus Technologies CEO Richard Smith filed an emergency motion in federal appeals court last week (pdf) in which he tried to basically claim that if the FCC moves to prevent inmates from getting ripped off, prisoners will riot:

"This chaos and confusion about what is the correct intrastate calling rate—and the only answer is that there is no federally mandated intrastate calling rate after the Court's March 7 Order which stayed all new rates—will carry over into correctional facilities themselves. Inmates will be angry if they believe that Securus is charging the wrong rates. There could be damage to Securus phones and equipment, as well as a threat to overall security and corrections personnel including inmates within the facilities. Having been in this industry for eight years, I have experience with jail unrest and I know that issues with the phones can trigger it."

In other words, if inmates that have been ripped off for decades suddenly believe they'll be facing lower rates -- and Securus keeps charging the higher rates -- they'll riot. While it's incredibly sweet of the company to be so concerned with prisoner safety, it's odd that Securus wasn't all that concerned with inmates rioting earlier, given these companies have been charging Mercedes prices for what's arguably a Yugo-grade product for the better part of a generation.

Keep in mind that voice services these days cost very little to actually provide. Also keep in mind that Securus and other such companies are part of a dangerously cozy and captive market, where prisons get paid upwards of $460 million annually in "concession fees" (read: kickbacks) to score exclusive, lucrative prison contracts. As a result, the service pricing and quality are just about what you'd expect. And as a hack of Securus late last year revealed, these contracts appear to involve helping government record potentially privileged attorney client conversations (Securus just settled a 2014 Texas case claiming precisely this).

So again, ripping off consumers for years? Ok. Working in concert with government to record privileged communications? Fine. Croynistic, monopoly control over a (literally) captive audience resulting in abysmal service? Sure! Trying to prevent inmate families from having to take out a second mortgage to speak to their loved ones? Inevitable riots, safety first!

Filed Under: fcc, ics, inmate calling service, phone calls, prisons, richard smith
Companies: global tel*link, securus technologies

Canada Agrees To Use EU's 'Lipstick On A Pig' Version Of Corporate Sovereignty For CETA

from the clever-cosmetic-changes dept

Last September, Techdirt reported on the EU's plan to replace the highly-controversial corporate sovereignty provisions in TAFTA/TTIP -- the "investor-state dispute settlement" (ISDS) chapter -- with something it called the "Investor Court System" (ICS). As we reported then, even if ICS addressed all the problems of ISDS -- spoiler alert: it certainly doesn't -- there was a huge backdoor in the form of CETA, the trade deal between the EU and Canada. If CETA includes old-style corporate sovereignty provisions, US companies with subsidiaries in Canada will be able to use CETA to by-pass TAFTA/TTIP's new ICS system completely, and sue EU nations using ISDS with all its widely-recognized faults. In fact, Bernd Lange, the MEP with responsibility for making recommendations on how the European Parliament (EP) should vote on international trade matters, said at the time that he would not support CETA if it included ISDS.

The arrival of a new government in Canada while CETA is still undergoing "legal scrubbing" -- checking and tweaking the exact wording -- has given the European Commission the opportunity to re-negotiate the corporate sovereignty chapter in CETA, even though it rather sneakily claimed it couldn't do that. But it turns out it could, and did, in a move that is likely to have important repercussions:

The European Commission and the Canadian Government have agreed to include a new approach on investment protection and investment dispute settlement in the EU-Canada Comprehensive Economic and Trade Agreement (CETA).

The negotiations on a free trade deal between the European Union and Canada were concluded in 2014 with a reformed investment dispute settlement system, notably with full transparency of proceedings and clear and unambiguous investment protection standards.

Following the legal revision of the text, the agreement now reached goes even further. All the main elements of the EU's new approach on investment, as outlined in the EU's TTIP proposal of November 2015 and contained in the recently concluded EU-Vietnam free trade agreement, have been included in the finalised CETA text.

This represents a clear break from the old Investor to State Dispute Settlement (ISDS) approach and demonstrates the shared determination of the EU and Canada to replace the current ISDS system with a new dispute settlement mechanism and move towards establishing a permanent multilateral investment court. This revised CETA text is also a clear signal of the EU’s intent to include this new proposal on investment in its negotiations with all partners.

By persuading Canada to accept the ICS instead of a marginally-updated ISDS, the European Commission can claim to have addressed Lange's concerns. Indeed, his party, the Socialists and Democrats (S&D), rushed out a press release that tries to claim credit for the move:

The Socialists and Democrats in the European Parliament welcome the announcement made today by the European Commission and the Canadian government on the changes in the trade agreement between the EU and Canada (CETA) so as to include the S&D demands.

What matters here is not who did what, but that the S&D are now unlikely to block CETA because of the corporate sovereignty provision. With broad S&D support, CETA stands a better chance of being ratified by the European Parliament sometime later this year.

However, even with ICS in CETA, the European Commission still faces an uphill battle convincing the US that it too should agree to replace the old-style corporate sovereignty in TAFTA/TTIP. Last week, during the 12th round of the TTIP negotiations, the EU formally proposed its ICS alternative (pdf), but we don't yet know what the official US response will be. Unofficial comments suggest that it is lukewarm about the idea. Since some powerful US business lobbies seem unhappy with the ICS approach, Canada's decision to accept it in CETA may paradoxically stiffen US resistance to the idea in TAFTA/TTIP. And without ICS, Lange's S&D could decide they have to vote against the deal if and when it comes up for ratification in the European Parliament.

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Filed Under: canada, ceta, corporate soveriegnty, eu, ics, investor court system, isds, trade

Six Key Flaws In The EU's Proposed 'New' Corporate Sovereignty Court

from the only-six? dept

A few months back, Techdirt wrote about the European Commission's proposal to replace the traditional corporate sovereignty system -- generally known as "investor-state dispute settlement " (ISDS) -- with what it called the "Investment Court System" (ICS). That seemed to us little more than a re-branding exercise; now an international investment law scholar has weighed in on the issue with his own, rather more expert opinion. Gus Van Harten is Associate Professor at York University in Canada. According to his biography, he's written a book proposing:

the establishment of an international investment court to ensure independence and accountability in the international adjudication of regulatory disputes between states and investors.

Despite that -- or maybe because of that -- Van Harten is none too impressed with the European Commission's plans, as the title of his new paper makes clear: "Key flaws in the European Commission’s proposals for foreign investor protection in TTIP". He singles out six in particular.

1. ISDS is alive in the EC's proposals

As Techdirt noted back in September, ICS isn't really very different from ISDS. Van Harten points out one aspect of corporate sovereignty tribunals that really has no place in any "new and improved" approach:

ICS "judges" would continue to have a financial interest in future claims because they are still paid a (lucrative) daily fee in a context where only one side -- foreign investors -- can bring claims, they would continue to operate under the usual ISDS arbitration rules, they would not have to meet the requirements for judicial appointment in any country, and they would not even be barred from working on the side as ISDS arbitrators. I am prompted to say that, if ISDS is "dead", as some officials have claimed, then the EC’s ICS proposal reminds me of a zombie movie.

The second flaw:

2. The case still has not been made for foreign investor protection in the TTIP

Van Harten writes:

Any proposal to give special privileges or public subsidies to any economic actor -- here, the largest and wealthiest in the world -- calls for a strong justification based on clear evidence of the public benefit. The absence of such a justification and evidence has been a serious omission in the EC's proposals for foreign investor protection from the very start.

The third serious flaw is similarly without any justification on the part of the European Commission:

3. The EC's proposals are fundamentally imbalanced

That's because it gives investors huge privileges without any corresponding responsibilities. Van Harten has a practical suggestion for remedying that:

The EC should establish actionable responsibilities for foreign investors by allowing a host country or affected third party, such as a trade union or a local community, to bring a claim (or, more modestly, a counter-claim) against a foreign investor in the very same process that is used to enforce foreign investor protections. That is a basic test for evaluating balance in the EC's proposals.

The fourth flaw concerns one of the main claimed improvements of ICS over ISDS:

4. The EC's proposals put poison pills into the "right to regulate"

The European Commission has made much of the fact that its new ICS will enshrine the "right to regulate." In his paper, Van Santen explores in detail exactly why that claim is mere window-dressing. He even goes so far as to say:

These textual details greatly undermine the EC's proposal on the right to regulate and the right to change the legal and regulatory framework. Indeed, they suggest that the EC is pretending to protect the right to regulate, while leaving catches in the text that return us to the usual concerns about ISDS.

The fifth flaw concerns a point that many have made about ISDS in the context of TTIP:

5. The EC's proposal remains disrespectful of domestic institutions, including domestic and European courts

Here's why:

The EC's proposal is still premised on an assumption that EU and US courts are so flawed that foreign investors should be able to bring an ISDS claim without having to demonstrate that it would be unreasonable for the foreign investor to seek relief first in the courts

As well as being an insult to these rather well-developed legal systems, and the people who work in them, it also has some serious negative consequences:

Foreign investors can choose to avoid the [domestic] courts, they can turn back from the courts at any point to pursue ISDS instead, and they can use ISDS to seek compensation for a court's decisions at any level.

In other words, ICS gives investors the best of all possible worlds, while the rest of us:

must deal with the usual risks of democracy and regulation in the usual ways: by taking part in the democratic process, by buying insurance, by bargaining for strong dispute settlement clauses in their contracts with government, or by relying -- like everyone else -- on the [domestic] courts.

Finally, Van Harten points out that if the European Commission wants to fix a system it admits is broken, it seems to be going about things in the wrong way:

6. If the EC is serious about an international investment court, why is it proposing to expand ISDS in the TTIP?

He means a real international investment court, not the ICS, which is far from being that.

while the EC has signalled that it will work toward an fullblown international court to replace ISDS, if this is the goal then the EC’s sequencing appears backwards. Logically, the EC should be pushing to transform existing treaties so that ISDS is replaced with an international court before the EC goes to the U.S. with its proposals. In past, the U.S. government has not welcomed the idea of new international courts. The fact that the EC has done the opposite -- by floating a version of ISDS with the U.S. before pursuing a proper court with other countries -- seems to undermine the EC's credibility on the issue of an international investment court.

Van Harten's paper is particularly valuable at a time when the European Commission is trying hard to propagate the idea that the problem of corporate sovereignty in TAFTA/TTIP is now "solved" by its ICS proposal. Van Harten's analysis shows that is very far from the case, and that corporate sovereignty remains one of the most problematic aspects of a deal that is itself highly problematic.

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Filed Under: corporate sovereignty, europe, european commission, gus van harten, ics, isds, tafta, tpp, ttip

Business Whines That Even EU's Mild, Unsatisfactory Reform Of Corporate Sovereignty Goes Too Far

from the preserving-privileges dept

Last month Techdirt wrote about the attempt by the European Commission to deflect the growing EU resistance to the inclusion of a corporate sovereignty chapter in TAFTA/TTIP by turning it into a more formal Investment Court System (ICS). We pointed out some major problems with the proposal, and noted that the US Chamber of Commerce had already rejected the idea out of hand. We now have a response from BusinessEurope, one of the main lobbying organizations in the EU with 40 members in 34 countries. As Politico.eu reports, BusinessEurope is not impressed, and the reasons it gives are highly revealing.

[Luisa Santos, director for international relations at BusinessEurope] said that the provision [in the proposed ICS] that requires investors bringing an arbitration case to pay for all the expenses related to the case if they lose will scare off small businesses. Moreover, the mechanism for appeals will likely be used extensively, leading to long and costly trials.

On the matter of costs, a document put together by the European Commission on arbitration costs (pdf) includes the fact that:

Research by the OECD indicates that the average legal and arbitration costs for a claimant are around $8 million.

That average figure means that very few small businesses could contemplate bringing an investor-state dispute settlement (ISDS) case under the current system, so the move to ICS is unlikely to make any difference here. As for the criticism that the appeals process will be "used extensively", governments are only going to take on even more costs if they think that the rulings of the ICS are unfair or the awards disproportionate, and that is precisely why the appeal system is there -- to allow unfair and exaggerated awards to be challenged.

Santos also contended that the provision on countries appointing the judges would discriminate against the business community.

Leaving aside whether that is actually the case or not -- and why should it be? -- the comment overlooks a far more profound unfairness at the heart of both ISDS and ICS. This is the fact that only companies can bring cases, never the nations, which means that a country can never win a case: the best it can hope for is not to lose. That is a very real discrimination against the public, which always foots the bill when companies are successful in their claims against states, but never gets to enjoy corresponding awards against companies, because none is ever made. Finally, Politico.eu reports the following concern:

[Santos] slammed Malmström's plan to tighten the rules for cases of "indirect expropriation," in which a business claims compensation for an indirect lowering of investment values, such as through new environment or health regulations. Although the commissioner wants to avoid the abuse of such claims, the new EU rules are so strict that "in reality it won't be possible for any investor to be compensated," Santos said.

To its credit, the European Commission has published its proposed text for TAFTA/TTIP's investment chapter (pdf) in full. Here's the key passage limiting claims for indirect expropriation:

For greater certainty, except in the rare circumstance when the impact of a measure or series of measures is so severe in light of its purpose that it appears manifestly excessive, non-discriminatory measures of a Party that are designed and applied to protect legitimate public welfare objectives, such as the protection of public health, safety, environment or public morals, social or consumer protection or promotion and protection of cultural diversity do not constitute indirect expropriations.

As that makes clear, the intent is to prevent claims against measures that promote public welfare objectives -- and even then, exceptions can be made. So BusinessEurope's comments seem to mean that it thinks investors should still have the right to bring claims against all measures that are designed to promote public health, or to protect the environment -- in other words, precisely those kinds of legal actions that make corporate sovereignty provisions such a threat to society.

BusinessEurope's rejection of the ICS idea, which involves some very mild tweaks to the investor-state dispute process, demonstrates neatly that what it really wants is the old ISDS system, with all its egregious flaws, and its tilted playing-field that gives deep-pocketed corporations a powerful tool for intimidating sovereign governments, and interfering with democracy itself.

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Filed Under: corporate sovereignty, eu, ics, isds, tafta, ttip
Companies: businesseurope, chamber of commerce