I want to be able to sue you for a bundle every time you annoy me. That's why I am campaigning to create a new type of court, the Krotor Court.
If you piss me off, I will drag your ass into Krotor Court where the sky is the limit. Krotor Court can award me every penny you have as a judgment. The decisions and awards of Krotor Court cannot be appealed to any other court, not even our Supreme Court. Its decisions are absolute and final.
Krotor Court will be composed of three judges per case. I pick one, you pick another, and we both agree on the third judge. Did I mention that the available judges will be people who are board members or former executives in my friends' companies? And they may be judging as kind of a sabbatical now, hoping to get invited back to a highly paid position in one of our companies again. But don't worry, that won't affect their judgment at all. Really, trust me on that.
Best of all, it's my own personal court. You see, you can't file a suit against me in Krotor Court. I am the only one who gets to file suits (against you, of course). If I win, you have to pay me a wheelbarrowful of money. If you "win" against my suit, it just means that you get to slink away feeling lucky this time; Krotor Court cannot ever award you a monetary judgment against me.
Krotor Court is so well designed to serve my interests that I won't even need to use it often. If I see you getting ready to have a party, I will just tell you that if I hear so much as one annoying peep from you and your guests, I will haul your butt into Krotor Court. If you're thinking about remodeling, you'd better ask me first because if I object to your changes, you'll be in the courtroom faster than you can blink. By now, you know that if your kids play on my lawn, you'll need a top notch lawyer, pronto.
Remember, I can't lose in Krotor Court. And you can't win. Ever.
Am I an insanely selfish egomaniacal bastard? Find out below the curlicue.
Krotor Court may be a warped figment of my imagination but it has a real world counterpart: Investor-State Dispute Settlement, or ISDS. It's a provision or mechanism found in NAFTA, CAFTA, and other modern international trade agreements. It is assuredly going to be part of the Trans Pacific Partnership (TPP) and the proposed US-European Union trade agreement currently being negotiated.
To do a presto-change-o and transform Krotor Court to ISDS, all we need to do is change "Krotor" to any global corporation and "you" to any signatory nation of TPP. Many of us here on DK are aware of, and concerned about, ISDS as an extra-national extra-judicial body, not subject to appeal to any court in the world, much less our own courts.
But almost nobody addresses one of the most odious attributes of ISDS: it is a 100% one-sided racket. Only corporations may initiate a claim (against sovereign nations) through ISDS.
That's right. A nation cannot sue a corporation via ISDS. A labor union cannot do it. An environmental group cannot do it. ISDS does one thing and one thing only: it lets corporations sue countries for supposed damages (i.e., loss of future profits they anticipated). No matter what negligent or downright evil actions a corporation takes, nobody can ever ever ever initiate a claim against that corporation via ISDS. It is a private, secretive, non-judicial, extra-national court dedicated to the exclusive use of global corporations.
And a corporation can never lose in ISDS. The tribunal may reject its claim but that means it is no worse off than before it initiated it, because the arbitrators cannot award the "winning" nation a monetary judgment against the corporation.
On the other hand, a nation can never win. As we saw above, "winning" simply means the tribunal will not force the sued nation to pay damages to the corporation. Losing, though, can be devastating since there is no limit to the damages the arbitrators can award. It could mean bankrupting a country entirely, forcing it into default and penury.
It's really a viciously clever "heads-I-win, tails-you-lose" scheme set up to benefit corporations at the expense of the nations where they do business.
So what is the rationale they use to justify this inequitable and immoral flimflam? Usually, the TPP propagandists say it is to ensure "fairness" because many countries do not have impartial, uncorrupt judicial systems.
That's the same coin-toss scam all over again. Multinationals happily subvert justice and use the existent corruption when it works on their behalf. It's only when they fear that they can't outright buy the results they want that they whine about the perversity of corrupt judges and the need for an international tribunal to supersede national legal structures. Take a gander at Fortune magazine's article about it: Not just Wal-Mart: Dozens of U.S. companies face bribery suspicions.
The Obama administration pinky-swears that ISDS in TPP will be new and improved: they say third-parties like labor unions, privacy advocates, and environmentalists can file supporting (or dissenting) briefs with the tribunal.
Big fucking deal.
Honest improvement would be giving equal access to such groups. You know, like letting them file charges against Megapolluters International because they dumped toxic waste in the river. Or against Slavemasters Limited because they use 10 year olds for 14 hour shifts in their running shoe sweatshops and pay them less than a dollar a day. Or against Global Pirates Mining because they bribed the ex-dictator to sell them hundreds of millions of dollars of mineral rights in exchange for a ski chalet in St. Moritz.
But no, they can just file a pitiful little note, probably to be tossed in the trash, in cases filed by the corporations against a host nation. That's too pathetic to even pretend it's a sop to our sensibilities.
If the administration, the multinationals, and other TPP governments were concerned about injustice and corruption in the judiciary, they would extend their extra-national legal system to permit public interest organizations to initiate claims against multinationals on behalf of the citizenry. But they won't. Because they don't give a rat's ass about that. They just want cover to enjoy their own one-sided scheme for profiteering at the public's expense.
ISDS lets companies externalize the risks of their investments. That means if things go well, they reap the profits. If things go wrong, they use ISDS to wring money from the public treasury of the nation where they invested. Either way, it's win-win if you're a global corporation.
If you're just a regular citizen, especially in a developing country barely sustaining itself, well, it sucks to be you.
* A long con or big con is a scam that unfolds over several days or weeks and involves a team of swindlers, as well as props, sets, extras, costumes, and scripted lines. [Wikipedia]
Fri May 15, 2015 at 8:44 AM PT: I originally wrote this diary as a one-off article to point out just one similarity between the TPP and classic swindles. As I thought about it more, I realized how well the "long con" structure describes the TPP's content and negotiation process. So I decided to develop it into a series of articles exploring each point of similarity.
Had I known what I would ultimately do, I undoubtedly would have approached this first diary differently and focused on an explanation of ISDS' role as it would be in a typical long con. I will do that now for the benefit of any readers new to the series or anyone who revisits this page.
ISDS serves as the Outside Authority player in a long con. That is someone who lends a (false) veneer of respectability and legitimacy to the scam. For example, in a stock certificate swindle, perhaps the con artist arranges for the mark to meet him at a bank so that the bank president can verify the validity of the certificates. Of course, it works out that the mark arrives just as the scammer is concluding his meeting with the bank president. It appears that the two have a friendly but earnest relationship and the grifter shows the the mark the document just signed and sealed by the banker attesting to their value and authenticity.
Naturally, it was all a sham. The scammer arrived early and managed to get into the banker's office on a pretext; perhaps he tried to sell the banker (non-existent) encyclopedias or offered better and cheaper (non-existent) janitorial services. Whatever the pretext, he engaged the banker until the mark walked in and noticed him and the banker exchanging some kind of papers. The pretext papers disappeared into his briefcase, the two shook hands in farewell, and different papers emerged from the briefcase to show the mark: the phony documents of authenticity.
In this case, the banker was an innocent dupe completely uninvolved in the con. At other times, an event will be staged starring an Outside Authority who is really a member of the grift team.
In all cases, the point is to demonstrate to the mark that everything is completely on the up-and-up, legally sound, and controlled by fair standards. In all cases, that of course is misdirection and deception.
ISDS looks like a serious, bonafide process to ensure fairness and justice for all. As we've seen above, nothing could be further from the truth. ISDS is just another aspect of the long con.
Like many elements of the scam, ISDS can serve more than one purpose. Not only does it give the gravitas of an Outside Authority, it can continue to run decades after the con is signed and sealed, providing a lucrative way for the grifters to continue bleeding the public treasury.
The Long Con of the TPP |
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The Trans Pacific Partnership trade agreement has all the elements of a "long con", an elaborately staged swindle whose goal is to steal the assets of the mark (the victim of the scam). This series explains how the TPP actually is a long con and we, the American public, are the targeted mark.
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Stay tuned for the next installment: The Convincer |