A Charter of Rights for TNCs -- MAI
"It is a frightening scenario which forecasts a global economy in which nation states count for little and ordinary voters count for nothing at all. A world where unemployment remains unreasonably high, the division of wealth between rich and poor goes from unfair to outright immoral and a complete meltdown of the monetary system is inevitable." (Paul Hellyer, author of "The Evil Empire—Globalisation's Darker Side" and senior Cabinet Minister in a former Canadian Government.) He was referring to the Multilateral Agreement on Investment (MAI).
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A Charter of Rights for TNCs*
by Anna Pha, The Guardian, Sydney, April 15, 1998
"It is a frightening scenario which forecasts a global economy in which nation states count for little and ordinary voters count for nothing at all. A world where unemployment remains unreasonably high, the division of wealth between rich and poor goes from unfair to outright immoral and a complete meltdown of the monetary system is inevitable." (Paul Hellyer, author of "The Evil Empire—Globalisation's Darker Side" and senior Cabinet Minister in a former Canadian Government.) He was referring to the Multilateral Agreement on Investment (MAI).

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[* TNCs = Trans-National Corporations, i.e., Multinational Corporations]
Member countries of the Organisation for Economic Co-operation and Development (OECD), including Australia, began negotiating an agreement on foreign investment in September 1995, but it was not until a draft agreement was leaked last year that the details became public.
Australia has been involved since the outset, first under Labor and now under the Coalition. Treasury has been negotiating in secret, with the people of Australia, including Parliament, kept in the dark.
"The MAI seeks to introduce that much needed certainty and reliability for investors", said OECD Secretary-General Donald Johnston, not hiding who it is intended to benefit.
"Investors need long-term stability of rules and procedures, guarantees for entry and establishment, equal competitive opportunities and protection of existing investments", the Secretary-General said.
Foreign direct investment is the "driving force of the globalisation process that characterises the modern world economy", says the 1997 World Investment Report (UNCTAD).
Between 1982 and 1994 the total stock of foreign investments increased by 400 per cent, much of that growth is attributed by UNCTAD to the success of investment liberalisation policies. OECD-based corporations accounted for 85 per cent of foreign investments in 1996. (OECD figures). A total of 477 out of 500 of the largest corporations, as listed in Global Fortune, are based in OECD countries. They will be the main beneficiaries of the proposed Multilateral Agreement on Investment.
The efficiency of "market-based" economies depends on "the ease with which firms can enter and exit them", says the UNCTAD report. Ease of entry and exit of TNCs* is one of the central aims of the MAI.
The MAI is basically a charter of rights for transnational corporations (TNCs) as investors and speculators and a set of binding obligations on governments to protect those rights.
"The ability of governments to use investment policy as a tool to promote social, economic and environmental goals WILL BE FORBIDDEN UNDER THE MAI", warns Tony Clarke of the Polaris Institute.

It will do this by three principal means:

  1. All sectors of the economy of every country which becomes a party to the MAI will be opened to foreign investment, while placing strict limits on the ability of elected governments to regulate national economies;
  2. Foreign investments will be protected;
  3. This protection will be enforced.
[* TNCs = Trans-National Corporations, i.e., Multinational Corporations]

Total freedom for TNCs, No rights for others
The MAI provides for the removal of restrictions on foreign investment and measures that discriminate against foreign investment. It is binding on all levels of government—federal, state and local (or regional).
Investment is defined in the broadest terms to include "Every kind of asset owned or controlled, directly or indirectly, by an investor..."
This includes investments in:

National Treatment (NT)
A government which signs up to the MAI will be forced to accord foreign investors "treatment no less favourable than the treatment it accords to its own investors and their investments with respect to the establishment, acquisition, expansion, operation, management, maintenance, use, enjoyment and sale or other disposition of investments."
Governments are prohibited from giving preference to local companies or contractors.
They agree not to discriminate among the investors or investments of different MAI countries. This would prevent governments from singling out individual corporations for special grants or other concessions. It would also prevent discrimination in favour of investors from developing countries or other countries where there is a special relationship.

Govt powers over-ridden
While the OECD and Australian Government speak about the jobs that will be created, the draft MAI contains provisions that prevent governments from taking a range of measures to create jobs.
The clause on "Performance Requirements", says governments shall not "impose, enforce or maintain" requirements on investors or "enforce any commitment or undertaking".
For example, a government cannot impose an obligation on a foreign corporation to use a certain percentage of local content or to hire a given level of local labour, establish research facilities, set up in a particular region, establish regional headquarters in that country or make a long-term commitment.

Governments SHALL NOT INSIST on the export of a given level or percentage of goods and services, or the establishment of joint ventures with domestic partners. There are even restrictions on the ability of governments to insist on the transfer of technology—a widely touted benefit of foreign investment. The MAI assists TNCs in retaining their monopoly over production processes and technology.
The Performance Requirements clause outlaws policies that could result in benefits to domestic economies and job creation. It does nothing to help them.

The section on privatisation does not impose an obligation to privatise only on how to do it.
When governments privatise public enterprises or service provision there will be no restrictions on foreign ownership. This would apply to future sales such as Telstra, water, electricity, airports, Australia Post and to Qantas and the Commonwealth Bank which has been privatised.
The question of whether "special share holding" arrangements for management, employees and the general public, etc, are allowed is not resolved.
When a government puts to tender the handling of social security data, assessment of tax returns, public bus services, management of public hospitals, education programs, etc, it cannot discriminate in favour of domestic or in-house bids from within the public sector.
Forty per cent or more of shares on the Australian stock exchange are already foreign owned—the government could not place any limit on the foreign ownership of Australia in the future.

Public enterprises
Public enterprises and monopolies should act "solely in accordance with commercial considerations" in regard to prices, quality, availability, etc, says the draft MAI.
This could apply to services like medical, hospital, health insurance, education, prisons, policing, gas, electricity, telecommunications, letter delivery, libraries, job placement, and payment of social security benefits.
There is, however, no requirement for TNCs to base their prices on commercial grounds. They are free to sell at a loss to destroy smaller competitors and monopolise markets or to charge high monopoly prices.
Cross-subsidisation is ruled out. The aim is to ensure that big business does not end up subsidising other less profitable sectors such as those to remote and regional areas or for domestic users.
Where the abandonment of cross-subsidisation may not be politically acceptable (e.g. letter delivery), governments are permitted to make grants "to pursue social and other non-economic objectives," meaning taxpayers foot the bill.

Protection of investments
Governments will accord "fair and equitable treatment and full and constant protection and security" to foreign investments. They shall not impair by "unreasonable" (or discriminatory) measures "the operation, management, maintenance, use, enjoyment or disposal of investments".
Even regulations or laws which do not have the intent of discriminating against foreign investors but reduce profitability or investment opportunities could be deemed "unreasonable". Foreign TNCs will have the right to transfer investment capital, profits, loan and other related payments in and out of the country, at will, without delays.
They can do this in a "freely convertible currency", at the market rate of exchange, regardless of the impact that it might have on an economy. It would give speculators greater powers to manipulate currencies and stand over governments.
Governments will not restrict the transfer overseas of information and data for processing by foreign investors.
The rights of foreign speculators to invest in shares, bonds, loans or on the various futures markets will be sacrosanct. With these rights come the right to trade in currencies and move capital across borders at will.
Governments will not be able to take measures to prevent the type of speculation that contributed to the Mexican peso crisis or the more recent currency crises in Thailand, Indonesia and other SE Asian countries.
A progressive government wishing to control its currency or its foreign debt will be savagely punished. Indonesia's economy has been decimated for far less.

"A Contracting Party shall not expropriate or nationalise directly or indirectly" a foreign investment or "take any measure or measures having equivalent effect".
The only exception is where it is for "a purpose which is in the public interest" and on a non-discriminatory basis. "Compensation shall be paid without delay." It must be equivalent to the fair market value prior to expropriation. The compensation can be freely repatriated.
Any change to regulations after a foreign investment has been made or planned which harms profits or has the potential to harm profits could be considered as "expropriation".
A regulation might be introduced for environmental or health and safety reasons but it could still be considered as "expropriation".
Even a taxation measure (e.g. an increase in the corporate tax rate or measures to close a tax loophole) introduced after a foreign investment was made or planned could constitute expropriation if it does not fall within "the bounds of internationally recognised tax policies and practices".
It would be judged by the extent to which taxes of "a similar type and level are used around the world..." This applies to direct and indirect taxes and social security contributions at all levels of government including local government.
The comparison with "internationally recognised tax policies and tax practices" could leave any government daring to break the economic rationalist mould and attempting to force TNCs to pay more taxes facing charges of "expropriation", monetary claims and a binding decision from an international court to change its policy.

No protection for workers
The Preamble contains a clause reaffirming OECD members' commitment to "observance of internationally recognised core labour standards, i.e. freedom of association, the right to organise and bargain collectively, prohibition of forced labour, the elimination of exploitative forms of child labour, and non- discrimination in employment, and noting that the International Labour Organisation is the competent body to set and deal with core labour standards world-wide."
However, the Preamble is not binding and such motherhood statements mean nothing.
But even this is too much for the Australian Government which, together with two other governments, opposed even this reference in the Preamble.
One of the aims of freeing up the movement of TNCs in and out of countries is to create a global labour market in which workers around the world are pitted against each other as capital moves to where it can achieve the highest rates of exploitation.
Living standards, wages, working conditions and social services will be lowered in a "race to the bottom" as governments attack labour rights, lower wages and working conditions to attract investments and make markets more competitive—a process already under way. The attack on the Maritime Union of Australia is just one example.
David Korten (President of the People-Centred Development Forum) writing on the MAI summed it up: "For nations, communities, and individual workers global competition is about competing against every other nation, community and worker in the world for a declining pool of jobs by courting corporate favour.
"It is not about creating new jobs, but rather about redistributing them to those that are willing to give up the most in terms of wages, subsidies, tax breaks, working conditions, and environmental standards. More fundamentally it is about shifting wealth from communities and working people to corporations and shareholders."

No protection for environment
"We will oppose any and all measures to create or even imply binding obligations for governments or business related to the environment or labour", said Abraham Katz, President of the United States Council for International Business.
The US Government (backed by Australia) strongly opposed the inclusion of binding provisions on the environment.
In sharp contrast to the pages of text protecting foreign investments, it takes some hunting to find any references to protecting the environment—and most references are in the non-binding Preamble.
The Preamble claims that the MAI will "contribute to the efficient utilisation of economic resources".
There is a proposal that the Preamble recognise "that investment ... can play a key role in ensuring that economic growth is sustainable, when accompanied by appropriate environmental policies to ensure it takes place in an environmentally sound manner." But even if these sentiments are included they will not be enforceable.
The delegation of one country to the negotiations sought to include in the Preamble a statement "Reaffirming the sovereignty and sovereign rights of States over natural resources within the limits of national jurisdiction." But this has not been accepted.
There is no agreement over whether the non-binding preamble should be implemented "in accordance with international environmental law" or whether it should take precedence over such laws.
The MAI gives TNCs the right to non-renewable natural resources, to the exploitation of minerals, including hydrocarbons, and any other natural resources.
Governments will not be allowed to place obligations on foreign investors on the use of these resources to safeguard future requirements, the environment, etc.
National environmental laws will apply in theory. But, if a law, regardless of why it was introduced, results in "discrimination" against a foreign investor or "unreasonably" impairs the operation, management, use, enjoyment or disposal of investments, then it could run foul of the MAI and result in legal action, compensation, etc.
An international panel will decide what is "unreasonable". A local government with a policy to buy "green" or "ethical" products, might stop using Shell petrol on human rights grounds or refuse to buy timber felled from rain forests for conservation reasons.
It could be sued by Shell or the timber company in an international MAI court and directed to reverse its policy under the secondary boycott provisions of the MAI.
Ethylcorp, a US-based TNC, is using similar NAFTA provisions to claim damages because the Canadian Government banned one of its products. The ban was on health, safety and environmental grounds.
Another US company Metalclad is suing a provincial government in Mexico which refused it permission to operate a plant because it would cause severe pollution.
Under the MAI it would become very difficult for a government to impose any restrictions on foreign corporations that hampered their freedom to invest or restricted their ability to make profits. This would be particularly so where no domestic companies were involved.

The MAI covers all levels of government. It is a "top down and comprehensive agreement", its principles are applicable to "all segments of the economy and to all aspects of the treatment of investors", says Alan Larson, US Department of State and Vice-Chairman of the MAI Negotiating Group.
In the long term there is little that the MAI would leave untouched if its proponents succeed in getting the agreement signed by governments.
It could have serious ramifications for the environment, workers' wages and working conditions, health and safety, job creation, industry development, education, human rights, indigenous rights, consumer rights and standards, culture, education, sport, the future of the public sector, monetary policy, balance of payments, financial stability, the role of government, and democratic rights.
It is harder to imagine what would not be affected.
Once a government signed up, it could not withdraw for a minimum of five years and then the provisions would continue to apply for another 15 years to investments existing when the notice was given. The commitment, therefore, is a 20-year minimum.
Virtually everything is covered by the agreement. There are two types of exceptions:
1. General exceptions
A government may take action considered "necessary for the protection of its essential security interests" and the maintenance of public order. Specific references are made to times of war, emergencies in international relations, arms manufacture and obligations under UN peacekeeping.
Governments may invoke temporary "safeguards" restricting the transfer of money over borders in the event of or threat of serious balance-of-payments and external financial difficulties or where the movement of capital could cause serious difficulties for the operation of monetary or exchange rate policies. But such measures shall be consistent with the aims of the IMF and REQUIRE IMF APPROVAL.
A government can still take prudential measures with respect to financial services, for such purposes as protecting investors, depositors, policy holders and "to ensure the integrity and stability of its financial system".
2.Country specific exceptions
All OECD countries have laws and regulations that do not conform to MAI requirements.
Australia, for example, has restrictions on foreign ownership of the media, prescribed levels of Australian content in TV programs, limitations on foreign ownership of the privatised Commonwealth Bank, the Foreign Investment Review Board's work, cabotage, and land rights for indigenous people. These all contravene the proposed treaty.
There is provision for individual countries to list specific exceptions in a schedule to be attached to the treaty. The schedule would "grandfather" measures that do not conform to National Treatment and Most Favoured Nation Treatment to "prevent the introduction of more restrictive measures" — what's referred to as "standstill".
Governments would not have the right at some time in the future to add to their schedule of exceptions. They would be locked in. If a future progressive government wanted to pursue alternative economic and social policies it would find its hands tied.
The aim is to make deregulation, privatisation and the takeover by TNCs irreversible.
These listed exceptions are not permanent. They would be "rolled back" with governments expected to regularly defend the continuation of those that remained.
The "standstill" and "rollback" provisions are referred to in the agreement as the "ratchet" effect.
This is one of the most contentious areas of the MAI. Some governments oppose rolling everything back, particularly with the growing opposition to the treaty since it was leaked last year.
There is a proposal for a second list of exceptions that might be permanent and open to new additions. This has not been agreed to. Permanent exceptions "might undermine the MAI disciplines", one country argued. The aim is to provide certainty and freedom for TNCs from government intervention.
The Australian Government has released a list of its proposed exceptions. These include: foreign investment policy on media and real estate; fisheries; telecommunications; immigration; privatisation; foreign aid contracts; social services; government grants and subsidies; audio visual; indigenous persons; privatisation; professional and industry standards; and performance contracts.
Treasurer Peter Costello still refuses to say what is covered by each of these or whether other countries have agreed to their inclusion.

Dispute settlement
The Dispute Settlement provisions of the MAI give TNCs another powerful new weapon.
As well as providing measures to settle disputes between states (consultations, conciliation and arbitration), the MAI will provide corporations with the POWER TO DIRECTLY SUE GOVERNMENTS for damages over any alleged breaches of MAI provisions.
On the other hand, there is no right of States or people to sue investors. A foreign-based TNC is under no obligation to the people of the country where it is operating.
An investor may take action concerning any alleged breach of a government's obligations under the treaty which "causes loss or damage to the investor or its investment".
The action may go before a domestic court or an international tribunal WHICH WILL OPERATE UNDER MAI LAWS, not those of the country where the investment was made.
The tribunal's decision "shall be final and binding" and carried out without delay. The decision will be a public document but not the commercial information provided to the hearings.
The TNCs are given powers and rights over nation states and elected governments when it comes to defending their rights and freedom.

What happens to sovereignty, government, democratic rights?
"If we reflected upon the economic, social and ethical ramifications of the MAI, they reveal what is perhaps its most salient feature. It challenges the right of a nation to determine its own economic, social and ethical development", said Dr Chandra Muzaffar, Director of Just World Trust.
Tony Clark of the Polaris Institute says: "This new global constitution, however, is certainly not designed to ensure that the rights and freedoms of the world's people are upheld by democratically elected governments.
"On the contrary, it is a charter of rights and freedoms for corporations only—a charter to be guaranteed by national governments in the interests of profitable transnational investment and competition.
"It is meant to protect and benefit corporations, not citizens. Indeed, through this new global constitution, the rights of citizens and the powers of governments themselves will be largely superseded by those of the transnational corporations.
"In effect, the MAI amounts to a declaration of global corporate rule. As such, it is designed to enhance the political rights, the political power, and the political security of the TNCs on a world-wide scale", says Tony Clark.
A massive transfer of power from the people and their elected governments is already taking place. Society is being robbed of what control it had of its powers, its rights to provide for its members, to protect the environment, regulate economies.
Power goes to the "markets" dominated by the big corporations. The markets have no respect for people, for life, for culture, for nature and take no responsibility for the future.
Individual governments in the OECD countries have for a number of years been implementing the OECD structural adjustment programs which are part and parcel of the MAI. IMF-imposed "packages", regional blocks like NAFTA, the EU and APEC are other means to serve the same aims.
The process has involved lifting trade barriers (quotas, tariffs, etc), privatisation, competition policy, deregulation, cuts to government spending (social services, education, housing, health, etc), floating currencies and interest rates, deregulating the finance sector, and labour market deregulation (attacks on workers' wages and conditions).
All of these policies, like the proposed MAI, involve a transfer of power and wealth from the people to the largest and most powerful corporations.
These policies have resulted in massive profits and a record accumulation of wealth for the biggest corporations. This has been achieved at the expense of workers whose wages, job security, working conditions, and living standards are declining.
Public wealth is being handed over to the private sector through privatisation. The MAI would enable TNCs to snap it up.
The MAI is a move toward outright corporate dictatorship. Governments and the nation state have not yet been rendered powerless and irrelevant but their present powers are being used to protect TNCs and provide a favourable climate for their investments.
They are preparing the way for the destruction of the democratic rights of the people and the sovereignty of nation states.
We have been steadily marching towards a TNC dictatorship through the operation of various international institutions.
The General Agreement on Tariffs and Trade (GATT) was used to remove trade barriers.
The OECD, established by the leading industrialised nations, is a "think tank" for TNC interests and a means to influence governments to accept their policies. It has been largely responsible for the drawing up of the structural adjustment programs followed by Western governments over the last decade or so.
The IMF and the World Bank set in place international financial mechanisms through which the structural adjustment programs were forced on poorer nations while the dominating US corporations exercised power over their economies.
The World Trade Organisation which superseded GATT also provided a mechanism to compel governments to accept TNC dictated policies.
The US attempted to introduce a multilateral agreement on investment during the Uruguay round of GATT talks but was forced to retreat by strong opposition, including from some of the industrialised nations.
The OECD was then given the task of drafting an agreement on investment—the MAI—for later adoption by the WTO.
The MAI, if ever accepted and implemented by governments, would put in place the final plank in the world-wide domination of the TNCs. It is the next main component of a process associated with economic rationalism towards what the OECD calls "rolling back the state".
Only the 29 industrialised countries have been invited to take part in the negotiation of the MAI. All developing countries were excluded. The view of US authorities was that they would get a stronger treaty if negotiations were restricted to OECD countries -- the countries whose TNCs stood to benefit the most.
Once the MAI is signed and put in place by major governments others would be forced by political, economic and if necessary military coercion to fall into line.
Smaller, less developed countries would find themselves under considerable pressure if they wanted foreign investments. They would have no say whatsoever in the provisions of the Agreement.

TNC takeover already under way
The MAI should be seen in context with other government policies of privatisation, "small government" and deregulation. The plans already being implemented under OECD direction by many governments are part and parcel of the TNC takeover. The MAI is the "end-game" which would cement in place TNC control on a global scale.
Governments at all levels are contracting out the work of government and selling off public assets. Bit by bit the assets and running of government and the public sector are being handed over to the private sector.
Whether it be property, communications, information technology, data processing, education, legal services, health services, prisons, policing, administration, transport, maintenance work, postal services, emergency services, water, electricity, libraries, parks, housing—there are no limits to what can be taken over by the private sector. In practice that means the TNCs.
The MAI does not in itself make it obligatory to sell off public assets or contract out work. Governments are already doing that in line with OECD structural adjustment policies adopted years ago. Once the decision has been taken to sell or contract out a service or asset, then the MAI would come into play.
The MAI offers foreign-owned corporations (and foreign individuals) the same rights as Australian ones. In other words privatisation puts Australia on the market and the MAI opens the way for it to be taken over by foreign TNCs.
TNCs are not only to be given the same rights to purchase assets and contract for services but also to receive the same government subsidies and assistance that Australian investors might receive.
They could even have greater rights as the government could not place demands on them to use local content or labour or other restrictions that could be attached to a contract with an Australian company.
It would not be possible for governments attempting a program of regional development and job creation to give preference to local businesses or link grants or subsidies to the employment of a certain number of apprentices or guarantees of training.
Contracting out in itself raises serious questions such as privacy, security, accountability. Everything is shrouded in secrecy—the infamous "commercial in confidence" cover-up.
Under this cover there is unlimited scope for corruption, overcharging, and abandonment of quality. Transparency is required of governments but not when it comes to TNCs.
The thought of TNCs taking over the running of government and the public service is frightening enough. It would be even more alarming if governments were prevented from placing conditions on the corporations taking over. The MAI would do just that.
While seemingly economic in character, the takeover under way has serious social, cultural and political ramifications. The economic rationalist policies of deregulation, privatisation and "small government" involve a transfer of not only the common wealth but also many of the powers and functions of government.
Eventually, governments as we know them, will cease to exist.
They will become at best administrations run by and for the TNCs. The right to elect and throw out a government will have little meaning. Governments will have little power to implement policies in the interests of the people.

Over-rides international law
"The MAI elevates the rights of investors far above those of governments, local communities, citizens, workers and the environment. The MAI will severely undermine even the meagre progress made towards sustainable development since the Rio Earth Summit in 1992", says the statement issued by NGOs from around the world in Paris in October 1997.
"The MAI fails to incorporate any of the several relevant international agreements such as the Rio Declaration; Agenda 21; UN Guidelines for Consumer Protection (1985); the UNCTAD Set of Multilaterally Agreed Principles for the control of Restrictive Business Practices (1981); and the HABITAT Global Plan of Action."
It runs roughshod over the OECD's own Guidelines for Multilateral Enterprises 1976.

Stopping the MAI
The drafting of the MAI was scheduled to be completed in May 1997. There were strong objections and disagreements among the governments concerned and its conclusion was delayed until May this year.
Last year the secret negotiations and the terms of the proposed agreement were leaked to the world, resulting in a mass movement of outrage and opposition and the formation of an international network to stop the MAI.
It is now reported that the mass protest movement and the many disagreements between OECD member countries have forced a further postponement.
As this series of articles is published by The Guardian it is rumoured that the US is pressuring other OECD governments to sign up for the main principles incorporated in the MAI.
Signing the agreement is voluntary. So even if the negotiating process were completed Australia does not have to sign. The wealthier states are in a stronger position to refuse.
It is urgent that the Australian Government be pressured not to sign even a partial document. The MAI should be made an election issue.

NGO declaration
A joint NGO statement (October 27, 1997) representing development, environment and consumer groups from around the world described the MAI as a "damaging agreement which should not proceed in its current form, if at all."
"There is an obvious need for multilateral regulation of investments in view of the scale of social and environmental disruption created by the increasing mobility of capital. However the intention of the MAI is not to regulate investments but to regulate governments.
"The MAI elevates the rights of investors far above those of governments, local communities, citizens, workers and the environment.
"The MAI contains no binding, enforceable obligations for corporate conduct concerning the environment, labour standards and anti-competitive behaviour.
"The MAI gives foreign investors exclusive standing under a legally binding agreement to attack legitimate regulations designed to protect the environment, safeguard public health, uphold the rights of employees, and promote fair competition."
"The MAI is explicitly designed to make it easier for investors to move capital, including production facilities, from one country to another despite evidence that increased capital mobility disproportionately benefits multinational corporation at the expense of most of the world's peoples."
The Australian Council of Trade Unions says in its statement on the MAI that "The problem is not barriers to mobility, but rather the fact that capital has too much freedom to move and too great an ability to avoid responsibilities to society.
"We believe that there should be international regulation of investment issues and do not accept the basis of the proposed treaty which regulates governments and not multinational corporations."

NGO demands
The NGO statement calls for the suspension of MAI negotiations and an independent and comprehensive assessment of the social, environmental and development impact of the MAI with full public participation.
Any agreement should:

Specific interest groups have been lobbying governments to list exceptions to protect local industries, the environment, labour rights, culture, indigenous people's rights, and to retain control over natural resources and economic development.
Governments have listed numerous exceptions in areas where the MAI runs counter to existing laws and government policy. Canada, for example, has 26 pages of "exceptions".
The Australian Government claims that it will "lodge all exceptions required to protect current policies and ensure that no current policy is overridden or subsumed ..."
If it really meant that and could really do it, and other governments did likewise, it would render the treaty meaningless. The World Development Movement, a British NGO, examined the probable effects of the MAI on US legislative powers. It found that hundreds of state and local government laws would be ruled out.
In response, it was proposed that the US negotiator seek exemption for all of these non-conforming laws.
While the US administration might wish to protect its own sovereignty, it does not feel the same way about the rights of the people of other nations. The US has criticised the long lists of exceptions submitted by some countries.
One way in which the MAI could be defeated is by forcing governments to increase their lists of exceptions.
The demands of the NGOs and others campaigning against the MAI give a good foundation for popular demands to be placed on governments.

Defeating the MAI
Differences between negotiating parties seem to be widening as governments respond to international and domestic pressures.
However, governments that attempt to oppose the MAI could face considerable pressure from the financial markets. The further the process of deregulation and opening up of economies goes, the greater the power of the financial markets becomes and the less control or ability governments have to determine affairs.
The sovereignty of nation states is under threat as never before. The role of the state, and with it the ability of the people to have some say in the direction of events, is more and more limited.
Each step demanded of countries (floating currencies, lifting controls on capital flows, etc), gives the financial markets greater powers and the means to force the next steps in opening up their economies to TNC domination.

Internal differences
There are many and growing differences between governments over the tightness of the agreement, the extent of exceptions, how these might be agreed upon and phased out.
Another issue is the relationship between the MAI and the European Union and other regional agreements. Will the favoured treatment given to regional partners in the EU be permitted once the MAI is in force?
There have been major debates about the extent to which government subsidies and assistance and deregulation should be included in the agreement.
Other highly contentious issues are labour and environmental standards, cultural industries and whether exceptions can be permanent.
One of the most urgent tasks is to spread information about the MAI and build the movement against it. STOP MAI groups have been formed around Australia. (See previous page for who to contact.) Campaigns demanding the inclusion of strong provisions on these questions and the addition of as many exceptions as possible and for permanent exceptions could widen the differences and help bring the agreement down under its own weight.

MAI at work
Some examples of what the MAI (1) could mean in practice:

(1)The above are indicative of what might occur. The final position would depend on what areas, laws and regulations the government includes in its list of "exceptions" and whether it would be possible to make any exemptions permanent.

EU European Union
IMF International Monetary Fund
MAI Multilateral Agreement on Investment
MFN Most Favoured Nation
NAFTA North American Free Trade Agreement
NT National Treatment
OECD Organisation for Economic Co-operation and Development
TNC Transnational Corporation
WTO World Trade Organisation

1. "Background on Multilateral Agreement on Investment", published by AidWatch, PO Box 652, Woollahra, NSW 2025; ph: (02) 9387 5210; fax: (02) 9386 1497; email: aidwatch@pegasus.com.au
2. "Licence to Loot—the MAI and How to Stop It", published by Friends of the Earth, $6 incl. p& p.
3. "Disciplining Governments? What the MAI would mean for Australia" by Pat Ranald, published by Evatt Foundation & NSW Public Sector Research Centre. Ph: (02) 9385 3241; Fax: (02) 9385 3059.
email: psrc@unsw.edu.au
@E10.5 = Web sites:
Stop MAI: http://www.avid.net.au/stopmai/
OECD: http://www.oecd.org/daf/cmis/mai/maind

NSW: James Goodman, PO Box 937, Glebe, NSW 2037; Ph: 02 9514 2714 (w), 02 9692 8838 (h); Fax: 02 9514 2332; Email: james.goodman@uts.edu.au
Queensland: c/- Migrants Workers' Health Centre, 223 Logan Rd, Buranda, Qld 4102; Ph: 07 3217 3142; Fax: 07 3217 3028; Email: R.Sanders@ens.gu.edu.au
South Australia: John Hermann, PO Box 505 Modbury, SA 5092; Ph: 08 8264 4282; Email: hermann@dove.net.au
Victoria: Alan Griffiths, Ph: 03 9380 6414; Email: jtaitl@pgrad.unimelb.edu.au
Western Australia: Dion Giles, Email: dgiles@chem.murdoch.edu.au

Anna Pha, The Guardian, 65 Campbell Street, Surry Hills, NSW, 2010.   Phone: (02) 9212.6855   Fax: (02) 9281.5795   Email: guardian@peg.apc.org   Webpage: http://www.peg.apc.org/~guardian
The Guardian, Sydney, New South Wales, Australia, April 15, 1998

[* TNCs = Trans-National Corporations, i.e., Multinational Corporations]

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