Brussels’s lobbying bonanza Pia Eberhardt, Lora Verheecke and Kenneth Haar are political activists and campaigners for Corporate Europe Observatory, a non-profit research and campaign group based in Brussels An estimated 20,000 to 30,000 professional lobbyists roam the corridors of the EU capital Brussels, 70% representing big business. Brussels is home to more than 500 transnational corporation offices, over 1,000 industry associations and hundreds of consultancies. Many of their staff used to work in EU institutions, know who and how to lobby, and have enormous resources at their disposal. The financial industry, for example, spent more than €120 million per year on lobbying around the EU's efforts to regulate the financial sector in the wake of the 2008 crisis – outspending other interest groups by a factor of more than 30. At that time, there were 1,700 financial sector lobbyists working in Brussels, four for every one financial civil servant. Moreover, the most powerful sections of the EU institutions seem eager to put themselves at the disposal of corporations, not least the civil servants of the European Commission that negotiate EU trade agreements. The talks on the proposed EU-US TTIP (Transatlantic Trade and Investment Partnership) agreement have shown this very clearly and could offer business lobbyists even more tools and leverage to tangle up, delay, sue for compensation for, and even cancel, regulations that hamper profits. Excessive rights for foreign investors – a key element in the proposed TTIP – will significantly expand big business power. The idea is to grant EU investors in the US, and US investors in the EU, far-reaching rights to attack decisions made by parliaments, governments and even courts. To claim these rights, investors would have access to a parallel legal system which is exclusively available to them: via so called investor-state dispute settlement (ISDS), they can bypass local courts and sue states directly in private international tribunals. Around the world, companies are already using similar rights in trade and investment agreements to claim compensation for perfectly legitimate government policies to protect health, the environment and other public interests – because they claim these policies have the indirect effect of undermining corporate profits. For example, tobacco giant Philip Morris is demanding US$2 billion from Uruguay over health warnings on cigarette packets; Swedish polluter Vattenfall is seeking €4.7 billion from Germany following a democratic decision to phase out nuclear energy; and Canadian company Lone Pine is suing Canada via a US-subsidiary for CAN$250 million after the Canadian province of Quebec imposed a moratorium on shale gas extraction (fracking) over environmental concerns. Countries have indeed been asked to pay huge sums of money to companies under investor-state disputes. One of the highest known compensations to date, US$2.3 billion, was awarded to US oil company Occidental Petroleum against Ecuador, for the termination of an oil production site in the Amazon. There is also evidence that proposed and adopted laws on public health and environmental protection have been abandoned or watered down because of corporate claims for multi-million dollar damages – or the threat of an expensive claim. Five years after the investor-state provisions of the North American Free Trade Agreement (NAFTA) came into force, a former Canadian government official told a journalist: “I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation…. Virtually all of the new initiatives were targeted and most of them never saw the light of day.” A clear example of this regulatory chill effect is the announcement by New Zealand’s Health Minister to delay the enactment of tobacco plain packaging legislation until after Philip Morris’ claim against Australia’s tobacco rules has been resolved. Critical scholars such as David Schneiderman from the University of Toronto have therefore aptly described the anti-democratic character of international investment treaties as: “an emerging form of supraconstitution… designed to insulate economic policy from majoritarian politics”. US-based journalist William Greider has argued that the excessive investor rights in international trade pacts are part of “a long term strategy, carefully thought out by business” to re-define “public regulation as a government ‘taking’ of private property that requires compensation”. The implications, according to Greider, are far-reaching – and that was exactly the intention: “Because any new regulation is bound to have some economic impact on private assets, this doctrine is a formula to shrink the reach of modern government and cripple the regulatory state – undermining long-established protections for social welfare and economic justice, environmental values and individual rights. Right-wing advocates frankly state that objective – restoring the primacy of property against society’s broader claims.” Enshrining the excessive investor rights in agreements between capital-exporting countries such as the EU and the US would multiply litigation risks (one reason investment treaties between capital-exporting states are very rare). TTIP would cover more than half of all foreign direct investment in the whole of the EU, including in industries which have proven prone to investor-state claims in the past, such as extractives or water and energy utilities. According to research by the US-based consumer organisation Public Citizen, a total of 75,000 cross-registered companies with subsidiaries in both the EU and the US could launch investor-state attacks under the proposed deal. This danger is even more real given that EU and US businesses are well aware of how to work the system: according to UNCTAD, they account for 75% of all investor-state disputes known globally. Under the proposed corporate rights in the EU-US trade deal, companies could basically sue the living daylights out of governments on both sides of the Atlantic. When preparing the mandate for the negotiations on TTIP, and in the first important months of the talks themselves (January 2012 to February 2014), the European Commission’s trade department (DG Trade) had 597 behind-closed-door meetings with lobbyists to discuss the negotiations, according to internal Commission files obtained via access to information requests. 528 of those meetings (88%) were with business lobbyists while only 53 (9%) were with public interest groups. So, for every meeting with a trade union or consumer group, there were 10 with companies and industry federations. There is evidence that DG Trade actively encouraged the involvement of corporate lobbyists. For example, in autumn 2012, DG Trade chased pesticide lobby group ECPA to participate in the then-ongoing public consultation on TTIP. As “the European crop protection/pesticides industry is one of the key sectors we would be looking at in terms of improving the framework for business,” an official emailed ECPA, their contribution “would be most welcome”. ECPA responded together with its US counterpart CropLife America, demanding “significant harmonisation” for pesticide residues in food. Another example of the formidable alliance between EU negotiators and the corporate sector is the enthusiasm in the financial lobby community for the EU’s approach on financial regulation in TTIP. When the EU’s position on the issue was leaked in early 2014, Richard Normington, Senior Manager of the Policy and Public Affairs team at TheCityUK – a key British financial lobby group - applauded the Commission’s proposals, because it “reflected so closely the approach of TheCityUK that a bystander would have thought it came straight out of our brochure on TTIP”. On investment protection, the Commission seems to side with the corporate lobby. When the Commission organised a public consultation on the issue, over 97% of the nearly 150,000 participants rejected investor-state dispute settlement in TTIP, including many businesses, governments and all the non-corporate members in the Commission’s advisory group on TTIP. Still, the Commission seems to follow the big business lobby groups calling for ISDS in TTIP. The EU negotiation position for regulatory cooperation in TTIP has also been heavily influenced by BUSINESSEurope and the US Chamber of Commerce, two of the most powerful pro-TTIP lobby groups. They see regulatory cooperation as a ‘potential game changer’, a ‘gift that keeps on giving’, which would allow business lobbyists to ‘co-write legislation’, as they put it. They understand it as an ironing out divergence in existing and future laws in the long term – be it in food standards, chemicals approval, or rules on production methods, to name but a few. These proposals have been discussed in several meetings in a friendly atmosphere where the Commission stressed its desire to work closely with the two business lobbies to refine the proposal. The ‘regulatory cooperation’ chapter is another part of TTIP that could dramatically increase corporate influence over EU and US policy. Since 2013, several EU negotiation proposals on regulatory cooperation have been leaked which show that the European Commission is ready to provide business groups with a series of tools that will enable them to influence the outcome of new and existing laws, in Brussels and Washington as well as in EU capitals and US States. This is a powerful toolbox for corporations to apply pressure on decision makers to scare them away from adopting new rules that would hurt the interests of business, often to the detriment of other groups in society. The proposed investor rights and regulatory cooperation under TTIP deserve all the attention they can get from NGOs, social movements, citizens, trade unions and not least, from legislators across Europe. In this TTIP project, everything seems set up so that the leeway of elected politicians is minimized when it comes to legislating in any area that may limit the profits of investors and the free exchange of capital and goods. Indeed, if a legislative initiative in the public interest could pass through the cracks of regulatory cooperation, multinational corporations could still use the investor-state arbitration courts to win ‘compensation’. The mere prospect of such outcomes would be enough to discourage more than one policy-maker. EU politics is already heavily skewed in favour of capital and transnational corporations. TTIP would expand their power even further to threaten any future regulation that limits big business profits – and the very essence of democracy.
EU politics is already heavily skewed in favour of capital and transnational corporations. TTIP would expand their power even further to threaten any future regulation that limits big business profits – and the very essence of democracy