====================================================================== MAIGALOMANIA! Citizens and the Environment Sacrificed to Corporate Investment Agenda A BRIEFING BY CORPORATE EUROPE OBSERVATORY (CEO) February 1998 (see copyright notice at the bottom of this file) ====================================================================== This CEO briefing on the corporate agenda behind negotiations over an international investment treaty was brough to you by Belen Balanya, Ann Doherty, Olivier Hoedeman, Adam Ma'anit and Erik Wesselius. If you are not already on our e-mail distribution list and want to sign on, just send us an e-mail with your details and we will add you to the list. A web edition of MAIGALOMANIA (including direct links to information sources) is available on the ceo web site. Point your browser to http://www.xs4all.nl/~ceo/mai/ ====================================================================== MAIGALOMANIA megalomania n. 1. a mentall illness characterized by delusions of power. 2. informal: a craving for power. Secrecy, haste and intrigue have characterized the negotiations around the Multilateral Agreement on Investment (MAI) -- the latest plan of the economic globalization elite for dismantling barriers to investment all over the world in the quest for a progressively more open global economy. All of the regional and global economic liberalization pacts born in the past decade -- the World Trade Organization, NAFTA, the European Union, Mercosur and so forth -- will pale in the face of the mighty MAI. "Investment is a desirable and desired thing... Nonetheless, governments still sometimes find it threatening, because free direct investment limits administrations' ability to control and shape their countries' economic destiny. This is a small price to pay for allowing private sector decision-makers to generate economic benefits worldwide. But it is a price that some governments in some sectors still find difficult to pay. That is a tragedy." [1] (European Commissioner Sir Leon Brittan) "The preponderance of restrictions on foreign investment lie outside the OECD area ... Business needs the benefits of an international regime to include the fast-growing counties of Asia, Central and Eastern Europe and Latin America." [2] (The International Chamber of Commerce on the MAI) Corporate Empowerment An analysis of the forces behind any of the recent trade and investment regimes reveals that transnational corporations (TNCs) -- working both nationally and in international coalitions -- are active proponents of the prying open of markets and the removal of barriers to trade and investment. That is certainly the case in the ongoing OECD negotiations on the MAI. A total of 477 of the world's 500 largest TNCs are based in OECD countries and most of these are organized in groupings like the International Chamber of Commerce (ICC), the US Council for International Business (USCIB) and the European Roundtable of Industrialists (ERT). All of these corporate lobby groups have been directly or indirectly involved in the shaping of the MAI. The reason for their interest in a global investment treaty, intended as much for Third World countries as for the OECD states negotiating the agreement, can be found in the increasing percentage of corporate investment that flows in a southerly direction. Furthermore, TNCs are tightly allied with the neoliberal politicians governing most of their home countries, and generally play a considerable role in both national -- and increasingly international -- policy-making. The 1994 completion of the Uruguay Round and the creation of the World Trade Organization (WTO) was a great victory for TNCs, which together with their governments lobbied for the removal of national barriers to the flow of goods and services. The next logical corporate challenge has been the creation of a treaty which, by dismantling barriers to investment, would provide investors with a so-called "level playing field" across the globe. The various provisions of this Multilateral Agreement on Investment would ensure the most ideal investment conditions for TNCs -- including homogeneous and transparent legal and regulatory frameworks, the standardization of diverse local and national conditions, and best of all, the right to recourse when corporate profits or reputations are damaged. The Losers The agreement will grant TNCs with extensive new powers while at the same time denying governments the right to control foreign direct investment in their countries. The rules and regulations which hinder foreign investment and will be dismantled under the MAI are often those that protect workers and jobs, public welfare, domestic businesses, the environment and culture. By subverting national and local priorities to the needs of foreign investors, the MAI poses a dangerous threat to democratic political processes. The impacts would be the most devastating on poorer countries, which would have no chance to build up a balanced economy or break their reliance upon commodity export and resource extraction in the service of industrialized countries and their corporations. Consequences within OECD countries will be different but also dramatic. Third World Under Siege Third World Opposition against the MAI and other attempts to impose MAI-style policies has been considerable. Simultaneous to the launching of OECD MAI negotiations, the EU-led attempt at a flying start for a MAI-clone treaty, called MIA, within the World Trade Organisation was obstructed by countries like India and Malaysia. They could not, however, prevent the creation of a WTO working group on investment -- in which the EU and others continue to push for the commencement of MIA negotiations. The OECD countries have adopted a multifaceted strategy to reach their aim of investment deregulation in the South, including tempting Third World countries to sign on to the MAI, keeping an investment treaty on the burner in the WTO, and using other international institutions like UNCTAD and the IMF to further their objectives. The most recent offensive for investment deregulation was announced by EU Commissioner Sir Leon Brittan, who in early February of this year informed the world that negotiations on a Trans-Atlantic free trade zone, involving the EU and the US, might be launched already in May 1998. [3] Race Against Time After a smooth first year and a half of negotiations, the MAI entered a far rockier phase in early 1997. Problems arose due to demands by OECD countries for an increasing number of reservations and sectoral carve-outs, and also with the high speed emergence of anti-MAI campaigns in one OECD country after another. Although serious preparations for the MAI had already begun in 1991, non-governmental organizations representing environment, development, women and other sectors sure to be impacted by the MAI were not consulted until October 1997. The negotiators are now embroiled in a race against time in order to avoid another postponement of negotiation deadlines, a delay that might mean the kiss of death for the MAI. That would be a happy ending indeed for a treaty that would tie its signatory countries to the unfettered "free" global market economic model for 20 years. There would be every reason to celebrate the failure of a treaty that would increase competitive pressure on wages and policies, facilitate relocations, and ban many of the policies desperately needed to strengthen local economies and reduce general dependency on transnational corporations. ________________________________________________________________ | | | The OECD | | | | The Organization for Economic Cooperation and Development | | (OECD) is an intergovernmental organization with 29 member | | countries. More than simply a regional body, the OECD | | defines itself as "a homogeneous entity" within which member | | countries share similar economic and political ideologies. | | [4] Members include all EU states plus Switzerland, Norway, | | Iceland, the Czech Republic, Hungary, Poland, Turkey, | | Australia, the United States, Canada, Japan, South Korea, | | Mexico and New Zealand. | | | | OECD decision-making happens within a "system of consensus | | building through peer pressure." [5] Essentially, this means | | that member countries ensure that other members stay in line | | with current OECD policy and direction. Much of this policy | | and direction is the product of various committees, which | | seek to "knit a web of compatible policies and practices | | across countries that are part of an ever more globalized | | world." | | | | Although often described as an intergovernmental think tank, | | the OECD is in fact more than that. Member countries send | | experts and policy makers to join specialized groups and | | committees on approximately 200 subject areas. Such | | committee discussions often result in formal treaties and | | agreements in areas such as international investment, | | capital movements and environmental policy. | |________________________________________________________________| What's in the MAI? In sum, the MAI would require countries to open their economies wide to any interested investor, and TNC complaints about unfavourable treatment by the host country would be judged in unaccountable international courts. The main elements of the agreement are as follows: * The MAI would encompass an extremely broad range of investments. Not only direct corporate investment, but stocks, bonds, loans, debt shares, intellectual property rights, leases, mortgages and concessions on land and natural resources would be covered. The health, education, communications, cultural, banking and construction sectors would all be fair game for foreign investors; in fact, the only exempted sectors would be defense and police. * The MAI is based on the principles of national treatment and most favoured nation (MFN). In plain language, this would require governments to treat foreign investors as well or better than domestic investors, and thus would automatically favour transnational investment over that of smaller, domestic companies. Restrictions placed by countries on foreign investment in sensitive sectors -- for example publishing in Malaysia, Indonesia and Venezuela, forestry, fishing, mining and agriculture in a number of countries, as well as toxic waste in Colombia and highly polluting industry in Taiwan -- would be prohibited. * The MAI would do away with so-called performance requirements, measures designed to protect workers and communities. For example, government requirements for a minimum number of local people being employed in a foreign firm, the use of a certain percentage of domestic products, technology transfer and so forth would become illegal under the MAI. * By banning restrictions on the excessive flow of capital in and out of countries, the MAI would increase speculative short-term investments of the type that caused the 1994 Mexican peso crisis and recent stock market crashes in Southeast Asia. * Unlike other multilateral treaties, the MAI would include a dispute settlement mechanism to allow investors to sue national and local governments for expropriation. This mechanism, which grants powerful TNCs the right to challenge local and national legislation emerging from democratic political processes, is an extremely dangerous political precedent. A ruling of expropriation, which the MAI defines not only as loss of income but also of reputation, requires states to financially compensate the investor and/or to reform laws. The arbitration panel would consist of a few trade experts working behind closed doors, beyond public scrutiny. The ramifications of this provision upon national environmental, health and safety regulations are enormous, as exhibited by an ongoing case under the NAFTA in which the US Ethyl company is suing the Canadian government for US$ 250 million, claiming lost profits and reputation due to the banning of a toxic gasoline additive. * The MAI would in effect lock signatory countries into the agreement for a 20 year period. A country can withdraw from the MAI only after five years, and companies investing in that country are covered under treaty provisions for an additional 15 years. * The MAI also includes the dangerous provisions of standstill and roll-back. Standstill prohibits signatory countries from introducing new laws or policies which contradict the MAI -- this would have a crippling effect on national environmental and social policy. Roll-back is the procedure by which countries will be forced to open up protected areas and remove laws considered in violation of the MAI. OECD countries have identified 1000 pages of exemptions which would eventually have to be rolled back -- ranging from Austria's exemption of its chimney sweeping industry to social services in the United States. * The provisions of the MAI would contradict several international agreements signed by governments, including the Climate Convention and its Kyoto Protocol and the Convention on Biological Diversity. * The MAI will be a freestanding international treaty, open to accession by non-OECD countries, which means that countries can sign on a take-it-or-leave-it basis, only allowing time-limited reservations. At least 10 non-OECD countries have expressed interest in joining the MAI from the beginning, including Argentina, Brazil, Chile and most likely Hong Kong, Colombia and the three Baltic States: Estonia, Latvia and Lithuania. Also Egypt is expected to join. [6] _________________________________________________________________ THE EXPLOSIVE GROWTH OF FOREIGN INVESTMENT Some Background Information _________________________________________________________________ Global foreign investment was at an all time peak in both 1994 and 1995, and the 10 percent worldwide growth in foreign investment in 1996 was also remarkable. Overall, foreign investment growth rates exceed global GNP growth rates (6.6 percent per year) as well as increases in international trade levels (4.5 percent per year). But even the breathtaking US$ 349 billion total for foreign direct investment in 1996 does not capture the breadth and depth of economic globalization. In the same year, TNCs invested a staggering US$ 1,400 billion in countries in which they are already represented. This development -- the increased presence of TNCs in local economies as a strategy to ensure market control -- has been labelled "glocalization". [7] TNCs Taking Over There are in total some 44,000 TNCs in the world, with 280,000 subsidiaries and an annual turnover of US$ 7,000 billion. Two-thirds of world trade results from TNC production networks. The share of world GDP controlled by TNCs has grown from 17 percent in the mid-60s to 24 percent in 1984 and almost 33 percent in 1995. [8] In a parallel and related process, the largest TNCs are steadily increasing their global market shares. According to UNCTAD's 1997 World Investment Report, the ten largest TNCs now have an annual turnover of more than US$ 1,000 billion. Fifty-one of the world's largest economies are in fact TNCs. Continuous mergers and take-overs have created a situation in which almost every sector of the global economy is controlled by a handful of TNCs, the most recent being the service and pharmaceutical sectors. In January 1998, for example, the largest business merger in history took place in a US$ 70 billion deal in which Glaxo Wellcome and SmithKline Beecham became the largest pharmaceutical company on earth. Moving On The European Union, the US and Japan are responsible for 85 percent of all outgoing foreign direct investment (FDI - 1996 figure). Apart from Korean-based Daewoo, all of the 100 largest TNCs are based in this wealthy triad. To date, this triad has also received the bulk of FDI -- nearly 3/4 in 1996. But the new trend is clear: TNCs based in the triad plan to step up their investments abroad and particularly in the Third World. More than half of all TNCs anticipate that the share of their turnover earned abroad will exceed 60 percent before the year 2000. In 1997 only 28% of the TNCs were that globally oriented. TNCs have already indicated their favourite targets for investment: in 1996, China received 1/3 of all FDI in the developing world and the remaining Asian countries received approximately the same. In Latin America, Brazil led with US$ 9.5 billion FDI in 1996, followed by Mexico and Argentina. Africa (minus South Africa) received only US$ 5.3 billion that year, of which the oil producing countries raked in 70 percent. Competitive Deregulation The surge in investment in the Third World can be attributed to a few key factors: * trade liberalization and low transport costs which make it possible to supply any market from anywhere in the world; * the low wages and access to cheap raw materials available in the Third World and former communist countries; * the need to win new markets after the North has been "saturated" (resulting in "low" growth); * the removal of barriers to foreign investment in many Third World countries, in part through bilateral and regional investment agreements; * and the increased competition to attract FDI which leads some countries to lower or freeze labour and environmental standards and to offer corporate subsidies and tax holidays. This competitive deregulation and increase in corporate welfare is also visible in the North. According to UNCTAD, corporate taxes within the OECD have decreased from 43 percent in 1986 to 33 percent today, and many EU countries are caught in a downward spiral. Lifting All Boats? The OECD claims that economic globalization in general and increased foreign investment in particular will improve living standards all over the world. However, the experiences of countries which have removed all barriers to foreign investment by joining free trade agreements are quite different. For example, since Mexico signed the NAFTA, real wages in the country have dropped 45 percent, two million people have become unemployed, and the percentage of the population considered "extremely poor" has risen from 31 percent in 1993 to 50 percent today. [9] It has been demonstrated that those who suffer most from the conditions created with these free trade agreements and the consequent emergence of free trade zones are women and children. UNCTAD's 1997 Trade and Development report concludes that globalization in its current shape is responsible for a dramatic increase in global inequality. In 1965, the average personal income in G-7 countries was 20 times that in the seven poorest countries in the world. In 1995, the gap was 39 times as large. Polarization and income inequalities are also growing within countries: the share of income going to the top 20 percent of the population has increased almost everywhere since the early 1980s. UNCTAD blames the liberalization of market forces for these developments, and considers the current situation inevitable until regulation of the economy is put back on the agenda. The Art of Job Killing Although TNCs present themselves as creators of wealth and employment, the figures reveal something different. In fact, one of the main characteristics of a competitive and successful TNC is the "shedding" of jobs. Between 1993 and 1995, global turnover of the top-100 TNCs increased by more than 25 percent, but during this same period the same companies cut 4 percent of their global workforce of 5.8 million -- over 225,000 people. [10] TNC tendencies towards mergers, relocations, automatization and centralization of production and distribution are recipes for job losses. A part of the obsolete workforce might be employed by subcontractors, a "trouble-free" source of labour which TNCs increasingly make use of. Subcontractors are often skilfully played off against each other, resulting in lower prices as well as reduced wages and worsened working conditions. Another unfortunate fact about FDI is that it very often leads to the buying up and restructuring of local companies so that they can produce more with fewer employees. Around 2/3 of all FDI in the period 1986-92 consisted of mergers and take-overs. [11] The sad truth about TNCs is that the increased growth, investment, monopolization and concentration upon which they rely -- as well as the resulting job losses and environmental degradation -- are a structural characteristic of the current neoliberal economic model. However, the voices calling for a halt to this endless pursuit of deregulation are growing louder, and are more often coming from unexpected sources. UNCTAD's World Investment Report 1997 ends with a warning to world leaders that the activities of TNCs and their market powers can in fact undermine the health of the global economy. ====================================================================== Laying the Groundwork ====================================================================== Although preparations for the MAI have been underway for close to a decade, official negotiations started only in 1995 and the first draft treaty was not ready until January 1997. Whereas negotiations had until this time been a relatively harmonious process involving negotiators from the most neoliberal branches of national governments and corporate lobby groups, the past year has been full of unexpected pitfalls. The combined impacts of conflicts between OECD countries and increasing environmental and trade union opposition have turned the negotiations into a high speed race towards the finish line. The Early Days Talks about something resembling a MAI within the OECD were launched as long ago as in 1988, when its investment committee began working to convert existing non-binding OECD agreements -- particularly the rules concerning national treatment for foreign investors -- into binding ones. Negotiations lasted for two years, but then came to a halt. The formal reason for the discontinuation was the US refusal to give Canada an exemption on national treatment for culture; the underlying motive, however was the ambition of some negotiating parties -- particularly the United States -- to start negotiations on a more comprehensive agreement on liberalizing investment flows. [12] Feasibility? The next year, in 1991, the OECD Ministerial Conference ordered a study into the feasibility of a multilateral framework for investment. The work was initially carried out by two OECD working groups: the aforementioned Committee on International Investment and Multinational Enterprises (CIME) and the Committee on Capital Movements and Invisible Transactions (CMIT). [13] This work was accelerated in 1994, when five working groups, "composed of independent governmental experts, were set up to prepare the major elements in the MAI". [14] During this preparatory phase, business interests were systematically consulted. Collaboration existed not only with the OECD's Business and Industry Advisory Council (BIAC), which unites numerous business associations and has formal consultative status at the OECD (see box below), but also with individual corporate lobby groups such as the International Chamber of Commerce (ICC: see Part 4). Pre-cooked MAI At their May 1995 conference, the OECD country ministers decided to initiate negotiations on a MAI, with the goal of completing an agreement by May 1997. The OECD countries made no secret of their intentions to negotiate a treaty with the "highest standards" of protections and rights for foreign investors, only afterwards inviting non-OECD countries, mainly in the Third World, to join. The process of soliciting non-OECD members started soon afterwards, in the first of a series of ongoing negotiations with interested countries. [15] NGO observers following the negotiations between the EU and the ACP countries (African, Caribbean and Pacific) about a revised Lome Convention [16] report that the EU is pressuring these former European colonies to accept the MAI as part of a new Convention. [17] From the outset, the MAI was also intended to prepare the ground for a global investment treaty within the World Trade Organization (see Part 3). [18] The main building blocks of the MAI as we know it -- including its all-encompassing definition of investment and the principles of national treatment, roll-back, standstill and so forth -- were in place from the start of the negotiations thanks to the four year feasibility study. Official negotiations kicked off in September 1995 in a negotiating group, chaired by Dutchman F.A. Engering, with representatives of all OECD states as well as the European Commission. The WTO was invited as an observer. Since that time, this negotiating group has met every four to six weeks, and working or drafting groups convene more frequently. Between meetings, delegates circulate texts and positions through electronic mail. [19] Informal Encounters Business had direct input throughout the entire negotiation process. Apart from the formal consultations carried out by the negotiating group with both the business and industry and trade union advisory councils (BIAC and TUAC, respectively: see boxes below], an "ad hoc group of BIAC experts ... meets with and advises OECD negotiators prior to each negotiation session". [20] The negotiators made extensive use of the "expertise" of the International Chamber of Commerce (ICC), for instance in shaping the dispute settlement mechanism. In fact the ICC's own court of arbitration is one of the three possible bodies that corporations can turn to for dispute settlement purposes. [21] And no less important than these direct injections into the OECD process is the lobbying done by industry on the national level. The US Council for International Business, for example, has "regular meetings with US negotiators immediately before and after each MAI negotiating session". [22] Similar close cooperation between industrialists and national negotiators has taken place in many other OECD countries, including Canada and the Netherlands. The pressure by the Dutch negotiators on the US to withdraw its reservation on research and development (R&D) subsidies was a direct result of lobbying from Dutch based TNC Philips. Philips wanted to ensure its access to R&D subsidies in the US. [23] Corporate lobby groups like the ICC and the European Roundtable of Industrialists (ERT: see Part 4) have used their political access at the highest political levels, including summits of global importance like the G-7, to stress the need for a speedy completion of the MAI and for keeping the agenda clear of labour and environmental demands. Shared Agenda The basis for the cosy consultations between governments and corporate lobby groups throughout the MAI drafting process is that the business agenda is wholeheartedly embraced by several of the most influential negotiating delegations. The ICC's April 1996 "Multilateral Rules for Investment" report leaves no doubt about the almost complete consensus between the MAI negotiators and industry. [24] The rules proposed in the report are basically identical to the first MAI draft that was completed 9 months later. Generally, economic or trade ministry officials represent their countries in the MAI negotiations in the OECD. In the Netherlands, the traditionally close connections between industry and economic and trade ministries were exploited to their full potential. The Dutch negotiators sided with industry in their mutual aim to get "as many obstacles as possible to foreign investment removed". [25] Dutch Secretary of State for Economic Affairs van Dok-van Weelen reported to the Dutch Parliament in November 1995 that national treatment should also apply to "issues like public procurement and the granting of all kinds of subsidies and guarantees". [26] In many countries, the MAI went largely unnoticed by other ministries -- for instance those of environment, social affairs and culture -- until a very late stage. Troubled Waters The first draft of the MAI saw the light of day in early 1997. Until this time, the agreement had been sailing along quite smoothly, with the general public and even most elected public officials oblivious to its very existence. But both the complicated reservation process and the discovery of the MAI process by the non-governmental organization (NGO) community have served to slow down, and perhaps even fundamentally disrupt the charted course of the planned agreement. Crippling Reservations Governments submitted their "reservations" to the MAI in February 1997, and in addition to the sheer volume of national exceptions, governments had chosen to exempt some core, open-ended areas of the agreement. In some countries, the exemption process probably involved governmental actors which had previously been uninformed about the MAI, and who were now reacting with cold feet to the far-reaching provisions of the agreement. Some of the major core exemptions proposed by member states are: * The US demanded an exemption for sub-federal law, which would provide states and localities with immunity from the MAI. * The EU asked for positive discrimination for investment within regional economic integration organizations (REIOs) like itself. The aim of this clause would be to ensure that the MAI would not prevent countries from changing their laws to match EU legislation. This could be of crucial importance for Central and Eastern European countries waiting for EU membership as well as for the future possibilities of harmonizing EU legislation. * France and Canada requested that culture be carved out of the agreement entirely. * The EU made noise about the need to ban secondary boycotts, such as the US Helms-Burton Act which penalizes companies doing business with Cuba. * Many governments discouraged the proposed ban on the use of tax measures (which could, for example, favour domestic or smaller enterprises). To add insult to injury, country-specific exemptions to the MAI now total a hefty 1000 pages, with some governments exempting page after page of the key sectors of their economies. [27] The serious impacts upon the treaty of these far-reaching reservations, such as culture, and the daunting volume of the specific exemptions have served to unsettle the previously trouble-free MAI negotiations. A decision to postpone the deadline for the negotiations until May 1998 was taken at the May 1997 OECD Ministerial Conference, with ministers arguing that a "high standard" MAI required more time. Public Explosion The second, and simultaneous spanner in the MAI's works was the explosive reaction of the international NGO community after a draft text of the MAI was leaked at the beginning of 1997. Canadian and US NGOs were quick to put the draft text on their web sites, and campaigning spread like wildfire to other parts of the world. NGO strategies have included public education, lobbying of government officials and parliamentarians (many of whom first heard about the MAI from the NGO community), and in October 1997, the organization of a global NGO strategy meeting on the MAI and a simultaneous informal consultation with the OECD. The consultation/strategy session brought together representatives of development, environmental and consumer groups from over 70 countries, and resulted in a call for a major overhaul of the agreement. [28] NGOs and trade unions have successfully injected two new demands into MAI negotiations -- the integration of labour and environmental standards into the agreement. For industry, these demands -- taken in conjunction with the cumbersome reservation process -- are intolerable. Recently, the OECD's Business and Industry Advisory Council (BIAC: see box below) began a new offensive after realizing that its dream MAI was on the verge of being derailed. At an official consultation between BIAC and the OECD MAI negotiating group in January this year, industrialists expressed their concerns about the direction the discussions were taking. Herman van Karnebeek, chairman of BIAC's Committee on Multinational Enterprises (as well as of chemical giant AKZO Nobel and the Dutch branch of the International Chamber of Commerce), complained that: "We now hear of disturbing signs that many of the elements we were hoping for may not be possible. What then, we are beginning to ask ourselves, is in the MAI for us?" [29]. Some BIAC members, particularly annoyed at the carve-out of taxation and the introduction of labour and environment standards, went so far as to threaten that business might withdraw its support for a sub-standard MAI, which would make ratification difficult in many countries. OECD negotiators calmed BIAC members fears by asserting that liberalization remained at the top of their agenda, but that compromises were necessary in order to complete the MAI by April 1998. "Remember, this is only the first step -- like the GATT in 1947", BIAC was consoled by an OECD official. "We are entering a process of historic dimensions." [30] ________________________________________________________________ | | | BIAC | | | | The Business and Industry Advisory Committee (BIAC) is the | | official voice of business in the OECD's MAI negotiations. | | BIAC, based in Paris and established in 1962 like the OECD | | itself, is regularly consulted by the OECD both formally and | | informally. It consists of the employers' organizations of | | the OECD member countries as well as industrial lobby groups | | like the UNICE, Business Council on National Issues (BNCI, | | Canada), the US Council for International Business (USCIB), | | the International Chamber of Commerce (ICC), the World | | Business Council for Sustainable Development (WBCSD) and | | others. Some individual corporations -- including Shell, | | General Electric, BASF and Kobe Steel -- are also | | represented in BIAC. BIAC is organized into 14 committees | | which work on issues ranging from trade, education and | | chemicals to international investment. | | | | BIAC has been an enthusiastic supporter of the MAI from the | | beginning of the negotiation process, and was actively | | involved in pre-negotiation work between 1991 and 1995. | | There have been a number of formal consultations between | | BIAC and the negotiation group, but perhaps more significant | | has been the work done behind the scenes. For example, an ad | | hoc group of BIAC representatives meets informally with the | | OECD negotiators prior to each negotiating session. [31] | |________________________________________________________________| ________________________________________________________________ | | | TUAC | | | | Like its corporate counterpart, the Trade Union Advisory | | Committee (TUAC) has consultative status within the OECD and | | has a small secretariat in Paris. TUAC represents over 55 | | trade union organizations in the industrialized world and | | counts a total membership of 70 million workers. | | | | TUAC sees its role as "ensuring that global markets are | | balanced by an effective social dimension". [32] | | Accordingly, TUAC has stressed the need for binding social | | and environmental standards in the MAI since consultations | | during the feasibility studies in the early 1990s. [33] | | Although OECD negotiators have never taken these | | recommendations seriously, Roy Jones of the TUAC Secretariat | | points out that the recent difficulties in the negotiations | | show that TUAC was right: "labour and environment can blow | | the treaty apart". [34] | |________________________________________________________________| __________________________________________________________________ The MAI and the European Union __________________________________________________________________ In addition to the 29 OECD countries, the European Commission has been represented as the 30th negotiator throughout the MAI negotiations. Although the legal status of the Commission's role is unclear, the MAI is being treated as a matter of shared responsibility between the European Commission and the member states. [35] In contrast, the Commission negotiates on behalf of the 15 member states in the World Trade Organization, a result of paragraph 113 in the Maastricht Treaty which gives the EU competence over a major part of the external trade policies of its member states. Although shared responsibility allows the Commission to play an influential role in the negotiations, it also means that the MAI will have to be ratified by the Council of Ministers. Overall, the Commission has played an increasingly important role in coordinating EU member state positions as the MAI negotiations have proceeded. This might be attributed to the ambitious leadership in the negotiations by Sir Leon Brittan of Directorate General 1 (External Economic Relations), a man well known for his aggressive, competitive approach to trade and investment matters. The EU is simultaneously pushing for a mechanism for investment liberalization both within the OECD negotiations and in the World Trade Organization (see Part 3). As Sir Leon Brittan explains: "We need to tear down existing obstacles to investment and stop new hurdles being thrown up in its way. Nothing short of a comprehensive set of binding international rules will create the level playing field which is so vital for the European economy." [36] Critical, Powerless Parliament To date, the European Parliament has been granted no formal role in the MAI negotiations nor does it have the legal right to ratify or reject the agreement. However, on its own initiative, the Parliament has brought out a resolution on the MAI which will be discussed in February and most likely voted on in March 1998. The first draft of the resolution, written by German Green MEP Kreissl-Doerfler, is highly critical of both the MAI and the negotiating process, and stresses "the fact that the negotiations have hitherto been conducted in utmost secrecy, with even the parliaments being excluded". [37] The draft resolution states that the MAI "reflects an imbalance between the rights and obligations of investors, guaranteeing the latter full rights and protection, while the signatory states are taking on burdensome obligations which might leave their populations unprotected". The resolution demands that binding social and environmental standards be included in the MAI, as well as a guarantee that the MAI will not lead to competition on rules in order to attract foreign investment. [38] In addition, the so-called Regional Economic Integration Organization (REIO) clause is a high priority for the European Parliament, which fears that the enlargement of the EU to Central and Eastern Europe, which will involve changes in legislation and future social and environmental policies at the EU level, are threatened by the MAI. These fears are mostly based on the most favoured nation and standstill clauses in the MAI. The Parliament's draft resolution on the MAI ends by calling on "the parliaments and the governments of the Member States not to sign the MAI until a thorough analysis, accessible to the public, has been carried out of the impact of this agreement on legislation within the EU". The Commission, however, is under no obligation to fulfil this request. The European Parliament has demanded the right to ratify the agreement, but it remains unclear whether or not the Council of Ministers will heed this request. ====================================================================== Multifaceted Attack for Investment Deregulation ====================================================================== As has already been indicated throughout this briefing, the MAI is not the only ambitious attempt to deregulate investment rules. Since 1995, governments all over the world have made some 600 changes in national investment legislation, 95 percent of which have resulted in greater liberalization. Over the past five years, the number of bilateral investment treaties has tripled to reach a current grand total of 1330 agreements involving 162 countries. [39] The following is an overview of the multifaceted attack for investment deregulation that has been launched by OECD countries. Over and above the MAI, the EU, the United States and Japan dream of a global investment treaty within the WTO. A first offensive to initiate negotiations on such a treaty -- stimulated by the euphoria that followed the signing of the GATT -- took place in 1995 and 1996. Fierce Third World resistance to the so-called MIA (Multilateral Investment Agreement) resulted in a compromise: the creation of a WTO working group on investment, within which the struggle continues. Another increasingly outspoken proponent of deregulation, UNCTAD (the United Nations Conference on Trade and Development) plays a crucial role in moving Third World countries towards more neoliberal positions on investment, for instance by providing consensus-building conferences. And with its far less subtle approach, the International Monetary Fund (IMF) continues to use every opportunity to impose MAI-like rules on countries in financial crisis. Activities on another front are likely to be stepped up in the next few months: a trans-atlantic free trade zone, including full scale investment deregulation, between the EU and the US. Preparations have been underway for several years between the US government, the European Commission and corporate leaders in the Trans-Atlantic Business Dialogue (TABD). In early February EU Commission Vice-President Brittan announced that the aim is to start negotiations at the EU-US Summit in May 1998. Another path leading to the same goal and with the same fundamental lack of public consultation, let alone a public mandate. [40] The MIA Track 1995 was a big year for investment negotiations: not only did MAI negotiations officially begin, but the OECD Ministerial meeting in June of that year also agreed to simultaneously push for a MIA within the WTO. [41] Although there was general consensus on the desirability of a two-track strategy, the European Union was probably the strongest proponent of taking the fast track approach with the WTO treaty. [42] As European Commissioner Sir Leon Brittan put it: "I believe that developing countries have never been as receptive as they are today to the message that foreign direct investment is not a threat but a positive tool for economic growth ... At a time when over half of new investment flows go to the developing world, this is a global issue that OECD countries cannot resolve alone ... We must get the issue into WTO..." [43] The original idea was to launch negotiations on MIA at the December 1996 WTO Ministerial Conference in Singapore. The proposal for a MIA outlined in the 1995 European Commission paper "A Level Playing Field for Direct Investment Worldwide" closely resembled the MAI. [44] This MIA would grant foreign investors the rights of entry, establishment and national treatment in all sectors in all WTO member countries, would guarantee unrestricted capital and profit flows, and would restructure tax and company laws. What makes an investment treaty within the WTO attractive to Northern governments is that it would allow access to the WTO's dispute settlement mechanism -- and in particular to its cross-retaliation provisions, which are a very powerful juridical instrument involving trade sanctions against non-compliant countries. Influential corporate lobby groups, in particular the European Roundtable of Industrialists (ERT, see appendix), had pressured for such a "GATT for investment" since the early 1990s. [45] Third World Resistance Third World countries revolted against the MIA from the beginning. In January 1996, for example, Malaysian Prime Minister Dr. Mahathir Mohamad commented that his country was "aware of such moves and we will take steps to ensure that such an unfair trade treaty will not be pushed through". [46] Soon afterwards, eight Third World countries, including India and Indonesia, issued a statement declaring "their objection to the bringing up of the trade and investment issue in the World Trade Organization". [47] Couching their displeasure in diplomatic terms, these countries expressed their concern that a MIA would impact "the ability of national governments to regulate FDI flows so as to support national development objectives and priorities". "Equally unclear", the eight governments stated, "is the nature of the potential benefits and costs of FDI and its relationship to the globalization process and the accompanying phenomenon of marginalization". [48] Instead, they demanded that the investment issue be discussed within the framework of the UN Conference on Trade and Development (UNCTAD), which lacks binding juridical powers and in which developing countries are at a less glaring disadvantage as in the WTO. These resistant Third World countries had learned a lesson from the Uruguay Round of the GATT -- that the initiation of negotiations generates enormous pressure for the completion of far-reaching treaties. Manipulations in Singapore Despite these clear signals from Third World governments, WTO Director-General Ruggiero nevertheless placed investment on the agenda for the WTO's December 1996 Singapore conference. The EU and other proponents of the MIA had by that time adapted their proposal into a "study process" on the relations between trade and investment. [49] During the course of the Singapore conference, those countries who resisted bringing investment onto the WTO agenda were one after another prodded to change their position. Some countries lobbied with some success to limit the scope of the working group. The last country to give in was India, which ultimately joined the last-ditch efforts to prevent the proposed working group from preparing the elements of a MIA negotiation process. In an utterly undemocratic procedure, a final draft declaration was negotiated by an informal group of 30 countries. It was presented to the conference plenary at the very last moment accompanied by a plea from the chairman, Singapore's Yeo Cheow Tong, to countries to refrain from reopening discussions. [50] And so the WTO working group on trade and investment was born. Whose Victory? Following the Singapore WTO Ministerial, EU Commissioner Brittan envisioned the door to a multilateral "framework of binding rules" on investment wide open, and declared that "on investment ... we have at least put WTO on the map. Investment indeed seems to me to be the top priority for WTO in the years ahead." [51]. Third World negotiators, on the other hand, emphasized that they had managed to stop negotiations on a MIA from being launched. India's Commerce Secretary Tejendra Kanna said that: "We made it clear that no mandate can be given for a study of a MIA. This is not permissible even with the two-year period. If it ever comes to that stage, even then, we will block it." [52] Cold War in Investment Working Group The tension between OECD countries and MIA opponents has been tangible at the three meetings of the working group in 1997, at which the OECD, UNCTAD, the World Bank, the IMF and other international institutions were observers. Whereas the EU has continued to urge for the commencement of negotiations, countries like Malaysia, India, Indonesia and Pakistan remain outspoken against even the smallest steps towards a global investment treaty. [53] The working group has been discussing trade, investment, development and economic growth on an abstract level, but in 1998 will also take on "multilateral agreements and initiatives". [54] Its report to the WTO Ministerial Conference in May 1998 is not likely to contain any controversial recommendations, and it is not expected that any decisions on investment will be taken at this meeting. Hotting Up Over the summer and fall, however, debates in the working group will heat up in anticipation of the December 1998 deadline for the final report to the WTO General Council. Proponents of a WTO treaty on investment will attempt to rally support for the preparation of negotiations; their success largely hinges upon the fate of the MAI negotiations. Observers expect that the EU and others aim to revitalize MIA so that negotiations could begin by 1999 or the year 2000. According to some sources, the most likely strategy is the initiation of new general round of negotiations to include worldwide liberalization of agriculture, investment and several other issues at the beginning of the new millennium. ________________________________________________________________ | | | World Trade Organization | | | | The World Trade Organization came into being on January 1st | | 1995, following the signing of the global free trade | | agreement GATT in 1994. The WTO's mandate is to remove | | obstacles to trade, and governments can ask its dispute | | settlement body to investigate whether another country's | | legislation might in fact be a trade barrier. WTO decisions | | are binding, and can be enforced through the implementation | | of trade sanctions against the disobedient government by all | | WTO member countries. | | | | The most recent WTO judgement that a consumer protection law | | acted as a trade barrier concerns the EU's ban on growth | | hormones in beef -- but many more cases are on the way. Just | | as the US raises cases on behalf of its corporations, the EU | | questions US food safety and environmental legislation on | | behalf of European-based TNCs. The US, the EU and Japan are | | continuously seeking the expansion of the WTO's mandate, as | | their industries crave access to the last remaining | | unprotected sectors of Third World economies. Since 1995, | | steps have been taken to liberalize telecommunications and | | financial services. Despite fierce Third World opposition, a | | WTO investment liberalization treaty is still a high | | priority for OECD countries, and in for particular the | | European Union. | |________________________________________________________________| ________________________________________________________________ | | | UNCTAD | | | | The UN Conference on Trade And Development (UNCTAD) is | | increasingly used by OECD countries and business groupings | | as a forum for moving Third World countries in the direction | | of a friendlier position on investment deregulation. | | | | At its May 1996 conference in Witrand, South Africa, UNCTAD | | received a mandate to study the development implications of | | existing investment arrangements like bilateral investment | | treaties (BITs) and to discuss the necessity of a | | multilateral framework for investment. | | | | In the final conclusions of their June 1996 meeting in Lyon, | | G-7 leaders described the results of the Witrand Conference | | as "a major milestone in the renewal of UNCTAD" and | | applauded the refocusing of UNCTAD's work on "a small number | | of priorities to promote development through trade and | | investment with the aim of facilitating the integration of | | developing countries in the international trade system." | | | | Although consensus building on investment rules within | | UNCTAD is informal, developing countries didn't join without | | nudges from their industrialized neighbours. As EU | | Commissioner Sir Leon Brittan put it in a speech to a | | business audience in Cologne, "Informal discussions have | | already begun in Geneva, largely thanks to European and | | Canadian pressure. We have been trying not to bludgeon | | developing countries into submission, but to share with them | | the fruits of our latest analysis, in order to show that | | investment liberalization is a winning strategy for all | | players." [55] | | | | And not only G-7 governments are trying to lure developing | | countries into the UNCTAD massage parlour -- major industry | | lobby groups like the European Roundtable of Industrialists | | (ERT) and the International Chamber of Commerce (ICC) have | | also discovered the usefulness of this institution. | | | | In December of 1997, the ERT and the UNCTAD secretariat | | co-organized a high-level meeting of 25 Geneva-based | | ambassadors from developing countries and some 16 CEOs of | | ERT companies to discuss a June 1997 ERT working paper on | | investment. The meeting was chaired by UNCTAD Secretary | | General Rubens Ricupero and ICC and ERT Chairman Helmut | | Maucher of Nestle. Maria Livanos Cattaui, Secretary General | | of the ICC, was also present. | | | | And at UNCTAD's 1996 World Investment Forum conference, the | | ICC spoke on behalf of world business, outlining what Third | | World countries should do to attract foreign direct | | investment. Asking investors to fulfil special obligations, | | for example, was strongly discouraged. [56] | |________________________________________________________________| ________________________________________________________________ | | | IMF: Declawing the Tigers | | | | The International Monetary Fund (IMF), traditionally | | responsible for helping countries to meet their balance of | | payments requirements and setting currency standards, has | | been a key instrument in prying open markets for foreign | | investors and bailing them out in the case of a financial | | crisis. The IMF's crowbar is a set of investment | | liberalization measures which rob countries of their | | economic sovereignty. | | | | As James Tobin, the Nobel Laureate economist who proposed a | | tax on all international currency transactions puts it: | | "It is hard to escape the conclusion that the countries' | | currency distress is serving as the opportunity for an | | unrelated agenda -- including the obtaining of trade | | concessions for US corporations and expansion of investment | | possibilities." [57] | | | | And indeed, the recent IMF "recovery packages" for the | | shattered economies of South Korea, Thailand, and Indonesia | | included a number of provisions that might have been taken | | straight from the text of the MAI. These included | | requirements that the indebted governments guarantee the | | following: the right for all foreign investors to establish | | investments in every sector of the economy; the weakening of | | labour and environmental standards to attract investment; | | the removal of safeguards in stock markets that limit flash | | sell-offs and capital flight; and prevention against the | | adoption of regulations which would restrict or control | | foreign investment in their countries. Today, with the Asian | | economies more exposed, TNCs are buying out local companies | | at bargain prices, and at the same time gaining new market | | territory for themselves. | |________________________________________________________________| __________________________________________________________________ Turning the Tide __________________________________________________________________ The next few months will be decisive for the future of the MAI. OECD negotiators appear determined not to extend the deadline for the negotiations a second time. They are racing against the clock to resolve conflicts between various countries, and are busily decorating the agreement with non-binding wording on social and environmental standards in an attempt to neutralize the critique and improve the chances of getting the MAI through national parliaments. Any further delay would leave MAI's future extremely uncertain. Experience has shown that additional time serves only to multiply problems for the negotiators, as more and more negative impacts of the MAI come to light. Most recently, the European Parliament's queries about how the MAI would affect future possibilities for improving social and environmental policies within the European Union has brought problems with the MAI to the surface. The multiplying number of pages of reservations demanded by national delegations have placed the OECD's rosy picture of a "win-win" treaty in a more realistic light. That the negotiating governments are at last becoming wary of the impacts that the MAI will have on their societies is a clear indication of the fundamentally flawed character of the treaty. MAI negotiators are likely to announce a political agreement on the MAI at the OECD's Ministerial Conference in May. Over the next months, they will focus on adding the finishing touches so that the treaty can be officially signed in November 1998. This is obviously a highly undemocratic procedure, and is symptomatic of the entire process to date. Although the rigid economic model that MAI signatory countries will be forced into may enjoy strong governmental support today, it will likely attract growing critique over coming years as its social, environmental and political impacts become increasingly visible. Joining the MAI involves a 20-year lock-in to a deregulated system in which countries are completely dependent upon the global economy, foreign investments and foreign investors: in other words, upon TNCs. Countries facing economic problems or other challenges will be barred from seeking new solutions. This is not only undemocratic, but also extremely dangerous. Citizen's campaigns against the MAI are increasing in strength day by day and in country after country, and the media is at last taking notice of the treaty. The NGO plot to kill the MAI has been termed the "Dracula strategy": simply bringing public attention to a treaty that cannot stand up against the light. Thus far, the response from OECD governments to the increasing pressure has been the addition of non-binding language to the treaty's preamble and elsewhere, but most NGOs recognize these as pseudo-solutions that do not change the fundamentally flawed character of the MAI. The OECD's haste in pushing the MAI through can also be attributed to the fear that the deregulation wave might be losing momentum. MAI negotiations started in 1995 at a time when OECD countries were intoxicated by the signing of the GATT and the birth of the World Trade Organization (WTO). Since then, although many more steps have been taken on the path towards a deregulated world market without borders for goods or capital flows, there are also increasing signs of a backlash arising from Southern governments and from people all over the world. The financial crisis in Asia was a painful lesson for the many Third World countries which had been forced to scrap the very regulations that could have prevented such a crash. Some governments, including Thailand, have now started talking about the need to reintroduce regulation. Critique of the deregulation model has also recently come from surprising corners: financial speculators George Soros and the late Sir James Goldsmith, for example, have both repeatedly warned against the social and environmental dangers of unbridled economic globalization. The next step includes voicing clearer alternatives, and advocating policies which reduce the current dangerous dependency upon transnational investment. Economic globalization and deregulation have created a vicious circle in which investment dependency forces workers, communities and governments into increasingly harsh competition on wages, taxes, environmental protection and anything else that might influence investment conditions. That international competitiveness is becoming the single most important factor determining the health of a society is a scenario for disaster, and will unavoidably lead to a downwards spiral in social and environmental standards and delay or freeze desperately needed progress in these areas. It is in reaction to this economic dependency upon TNCs that OECD governments have developed the MAI in close cooperation with business lobby groups, and why they are now desperately trying to push it through before the public is clued in to what is happening. Finally, TNC dependency is what is stimulating an increasing number of Third World countries to queue up to sign the MAI, so that they can receive a stamp of approval for having a first class investment climate. There are no lack of policy options for reducing TNC dependency and putting economic diversity and prosperity of local communities first. These include community reinvestment rules, limits on company size to avoid unfair competition, subsidies for local production for local use, efficient taxation of TNC profits to ensure that the local economy benefits from their presence, regulation of capital flows, and numerous other currently unfashionable policy options. Of course, these are the type of measures which would be banned if the MAI survives. MAI entails the institutionalization of neoliberalism as the only option -- the creation of a global economic constitution that is the equivalent of economic monoculture. The struggle against the MAI has demonstrated the enormous necessity and potential for grassroots globalization on these complex, far-reaching issues. Information and strategies are being shared among a increasingly strong network of citizens, NGOs, workers, development organizations, women's movements and church groups. Although effective resistance to the MAI has arisen late for a variety of reasons, there is no doubt that NGOs are now catching up. With an increasingly clear common analysis of the dangers of corporate-led globalization, civil society is getting prepared to defend our local economies, our democratic systems and the common good. ====================================================================== THE MAIN CORPORATE PLAYERS ====================================================================== The preceding parts have given ample examples of how corporate lobby groups have been involved in the shaping of the MAI. The following is a more detailed overview of the main corporate groupings and the manifold strategies they have used in their crusade for investment deregulation in various international fora. _________________________________________________________________ International Chamber of Commerce (ICC) _________________________________________________________________ One of the most heavyweight corporate players behind the MAI is without doubt the International Chamber of Commerce (ICC). The ICC, which promotes itself as "the world business organization" with members in over 130 countries, is not primarily an umbrella for chambers of commerce from around the world as the name might suggest. [58] Its membership includes some of the world's wealthiest transnational corporations: Asea Brown Boveri, Bayer, British Petroleum, Dow Chemical, General Motors, Hyundai, Nestle, Novartis, Shell, Toshiba, Zeneca and so forth. Quite a few national business associations are also part of the ICC. The ICC -- which clearly has ambitions to become a major player in global politics -- shares its chairman, Nestle president Helmut Maucher, with the influential European Roundtable of Industrialists. The ICC's secretary-general is Maria Livanos Cattaui, who over a period of nearly two decades developed the World Economic Forum and its annual meeting in Davos into a hugely influential global summit of corporate leaders and top politicians. ICC involvement in the MAI negotiations has partly been through the Business and Industry Advisory Council (BIAC), the official business delegation to the OECD negotiations. The Chamber itself has left a number of fingerprints on the draft treaty, for instance regarding arbitration. In the current draft, the ICC's Court of Arbitration is included as one of the main mechanisms for dispute settlement. Vincent J. O'Brien of the ICC says: "We definitely helped with the parts regarding arbitration. The ICC clearly has expertise in that area, and so it was natural that we had a hand in there." [59] One of the most controversial aspects of the MAI, the investor-state dispute mechanism which will allow corporations to sue governments in an international court, has been developed with the assistance of ICC "experts". The role of the ICC in this mechanism will be to oversee disputes and facilitate the settlement process. The MAI allows its signatories to declare certain laws exempt from the treaty for national security reasons. However, it is up to the MAI dispute settlement panel -- overseen by the ICC -- to determine whether such a claim is valid. No one is entirely sure how the MAI would affect national law, as interpretation of the treaty will be left to an independent panel appointed by defendants and the corporations bringing the dispute. Under the proposed MAI, state courts will have no jurisdiction in this area of law. The ICC has also made use of its access and consultative status at major international summits to push for the MAI. During the Denver Summit of the G-7 in 1997, the ICC met with the heads of state of the Group of Seven most industrialized countries and presented its viewpoints. The ICC urged, among other things, the leaders to work harder to ensure that the MAI negotiations are concluded quickly and that there be a complete rejection of environmental and labour standards. [60] The OECD treaty on investment is a major goal for the ICC, but it is only the first step. In the spring of 1996, the ICC published the report "Multilateral Rules for Investment" [61] in which it expressed its support for all of the major elements in the MAI: the broad definition of investment, national treatment, most-favoured nation treatment, investment protection, and binding investor-state arbitration. The report strongly supports the MAI negotiations, but ends by calling for the December 1996 WTO Ministerial Conference to "begin within the WTO to establish a comprehensive and truly global framework of rules and disciplines to govern cross-border direct investment". [62] ================================================================ European Industry and the MAI ================================================================ The two most influential European corporate lobby groups, the European Roundtable of Industrialists (ERT) and the Union of Industrial and Employers' Confederations of Europe (UNICE), have followed different strategies in their strive for an international investment treaty. _________________________________________________________________ The European Roundtable of Industrialists: One Step Ahead _________________________________________________________________ The European Roundtable of Industrialists [63] has long been deeply involved in the push for investment liberalization, and has built a very comprehensive strategy to this end. While supporting the MAI, its main objective is an investment agreement at the WTO. [64] As early as its 1993 report "European Industry - A Partner for the Developing World", the ERT had stressed the need for "a GATT for investment" and "an institution that could take stock of improvements and be able to lock in the process of liberalization". [65] This point has been often repeated in the five reports on investment produced by the ERT North-South working group since 1993. ERT president Helmut Maucher, who also heads the International Chamber of Commerce and is the CEO of Nestle, chairs this working group. The ERT has long played an active role in setting the EU policy agenda. In making the case for investment deregulation, roundtable members are in direct contact with European leaders and the European Commission as well as with Third World governments. The Roundtable is jubilant about the positive effects achieved by two of its proposed tools to further economic globalization: competition on rules (the race to provide companies with the most favourable investment conditions) and benchmarking (encouraging countries to compare their investment climate, including levels of deregulation). "Competition on rules and benchmarking have proven to be among the most effective drivers of the present process of opening the economy, deregulating and modernizing the institutions for private business investments." [66] These concepts, presented in a 1993 survey on investment [67] have been eagerly adopted by decision makers: "In the developing world it positively influenced attitudes and policies ... it may have had an impact on the views and policies of the European Commission and European governments in external economic relations in many different ways." [68] The ERT advocates an investment agreement within WTO which would include the main elements of the MAI but would extend even further. According to the ERT, a WTO treaty should ensure "continuous opening, also on the sub-federal level" through "rules and criteria for efficient public policy benchmarking and institutionalized peer review". [69] The WTO treaty should be flexible in order to "extend the coverage of the framework to additional relevant areas". The ERT's dream treaty would also include international competition policy "able to address structural impediments" to market access which foreign investors might come across, "defining the relevant market as more and as global". The ERT seems overly optimistic about the time frame for the completion of the WTO agreement they desire, proposing a "structured debate on strategy and concepts for a global agreement on investment at the next WTO Ministerial expected in June 1998," and the "rapid conclusion of an agreement of the new kind". [70] No doubt they will receive full support from the European Commission, one of the main advocates of a MIA within the WTO. Trade Commissioner Sir Leon Brittan, in reaction to the 1996 ERT survey on conditions for foreign investment, said: "I was particularly struck by the message that we needed to think about the best role of international negotiation, and to strike a balance between using the WTO to establish agreed best practice and using the WTO process to create more modern and dynamic instruments such as public policy benchmarking. My own hope is that WTO can do both." [71] The ERT has strategically facilitated the softening of developing country opposition to a WTO investment agreement. Many Third World countries have argued that discussion on investment should be held within the framework of the UNCTAD, so at the end of 1997 the ERT co-organized a meeting on investment with this organization. In attendance were 16 CEOs from ERT member companies (including ABB, British Petroleum, Krupp, Nestle and Shell) ICC Secretary General Maria Livanos Cattaui, and 25 Geneva-based ambassadors. The meeting, focused on "dialogue on matters concerning FDI and the development dimension of the issues and concepts relevant to a possible multilateral framework on investment", used the June 1997 ERT investment report as a basis for discussions. [72] _________________________________________________________________ UNICE: A Supportive Role _________________________________________________________________ UNICE, the European employers' organization, tends to play a more reactive role than the ERT, generally responding to specific EU policies as they emerge. As the EU has not officially released its position on the MAI, UNICE has thus far taken a back seat in the negotiations. Nonetheless, the group strongly supports the MAI and is represented in the negotiations through its BIAC membership. [73] Additionally, UNICE is a strong proponent of a multilateral agreement on investment within the WTO. [74] ================================================================ Non-European Corporate Lobbies and the MAI ================================================================ _________________________________________________________________ US Council for International Business _________________________________________________________________ When it comes to lobbying for the MAI, one of the most influential industry groups has proven to be the US Council for International Business (USCIB). Founded in 1945 "to promote an open system of world trade, investment and finance", [75] it counts over 300 corporations, industry lobby groups, law firms and banks among its membership -- including the American Petroleum Institute, BP America, Coca-Cola, Chevron, Dupont, General Electric, General Motors, the Global Climate Coalition, Honeywell, Ford, McDonalds, Mobil, Monsanto, Nestle USA, Philip Morris, Shell, Texaco and Unilever. The USCIB is the US affiliate of the International Chamber of Commerce (ICC) and the International Organization of Employers (IOE), and most significantly, chairs the expert group of the OECD's Business and Industry Advisory Committee (BIAC). 150 CEOs are busy pushing for investment liberalization through the USCIB's Investment Committee, chaired by Glen Skovholt of the Honeywell corporation. [76] This policy committee has been very active on the MAI, and has used its widespread corporate tentacles for various pressure tactics. In addition to regular meetings with US negotiators immediately before and after each MAI negotiating session, the USCIB has also arranged direct access for it members to Ambassador Frans Engering, chairman of the OECD MAI negotiating group. Domestic support for MAI has been created by the USCIB's collaboration with groups such as the National Governors' Association and the Council of State Government. The USCIB's interest in investment liberalization initiatives is not restricted to the MAI in the OECD. Facilitated by its membership in bodies like the Business Advisory Council for APEC and the Trans-Atlantic Business Dialogue (TABD), where it co- chairs the working group on investment, the USCIB ensures that investment remains at the top of the agenda in all relevant fora, including the WTO and regional treaties. Overseas pressure is also a tactic, and a USCIB delegation visited the Japanese business organization Keidanren in Kyoto in order to enlist support for US business objectives in the MAI. [77] There is no doubt that the USCIB has influenced the MAI from the beginning of the process. In 1991, four years before official negotiations began and long before MAI was out in the open, the USCIB was already providing input on pre-negotiation work. Later, in March of 1995, the Council released a statement clarifying US business objectives, which in its own words "formed the basis of the formal BIAC submission to the OECD". [78] The USCIB is clear about why it desires a MAI treaty: "The MAI should eliminate many of the restrictions which make it too costly for US firms to access foreign markets", according to Stephen Canner, the USCIB's Vice-President for Investment Policy. (79) Consequently, the USCIB agrees with other industry groups that the inclusion of labour and environmental provisions in the MAI would be an enormous blunder, and has encouraged the US administration to resist pressure from these interests. [80] Such provisions, it believes, "will deter key LDCs (Least Developed Countries), who are not members of the OECD, from adhering [and] thereby undercut a major objective of the United States -- to have a number of key non-OECD member countries join the MAI before beginning negotiations on investment in the WTO". [81] Recently the USCIB has shifted its focus to ensure that any reference to labour and environment in the MAI remains non- binding, threatening to withdraw its support for the MAI if this line is crossed. [82] The trio of provisions (the so-called "three-anchor approach") that the group could swallow coincides with the environmental provisions presented by the US. These are a non-binding preambular statement on sustainable development, a non-binding provision on not lowering standards to attract foreign investment, and a non-binding attachment to the OECD's 1974 Guidelines for Multinational Enterprises. The USCIB also invested some energy in damage control after NGO campaigning in the US had stirred up some serious public doubts about the MAI. In December of 1997, the USCIB published a letter in the Washington Times [83] trying to calm fears about the MAI. The letter mocks the concerns of MAI critics, sarcastically asking: "Will the MAI allow big, bad multinational corporations to trample the rights of poor countries, undermine existing national environmental legislation and take away from U.S. states their constitutional rights? Let's look at the facts..." and referring to "the feverish atmosphere of Internet chat rooms". [84] The bottom line, the groups argues, is that investment is not bad for the environment, and that it will benefit "the United States in general ... making the economic pie grow both here and abroad. [85] _________________________________________________________________ Business Council on National Issues _________________________________________________________________ Founded in 1976 by the CEOs of US-based Imperial Oil and Noranda, the Business Council on National Issues (BNCI) is Canada's version of the European and US business roundtables. Among its 30 members are the CEOs of several large banks and major Canadian and foreign companies including Air Canada, AT&T, Bechtel, Bombardier, Canadian Pacific, Cargill, Dupont, General Motors, Hewlett-Packard, Loram, MacMillan Bloedel, Mitsubishi, Monsanto, Nestle, Northern Telecom, Petro Canada and Placer Dome. Over the past two decades, the BCNI's relationship with successive Canadian governments has become increasingly intimate. The lobby group worked strenuously for the passage of the 1988 Canadian-US Free Trade Agreement, [86] and organized a costly campaign to secure the election of the current neoliberal government. However, the BCNI's approach to the MAI has been less aggressive, perhaps due to the group's wish to sweeten its negative public image. In the November 1997 MAI hearings, the BCNI professed its strong support for the Paris negotiations, focusing on the people-pleasing job creation aspects that such a treaty would bring -- "recent studies have indicated that for each billion dollars invested over a five-year period in Canada, something in the order of 45,000 jobs are created." [87] BCNI companies have also used other fora to fight for their favourite provisions in the MAI. Lobbying has been conducted through the Canadian Chamber of Commerce and the Canadian Council for International Business, and the BCNI is also a member of the OECD's official business advisory council, BIAC. In particular, the BCNI is strongly opposed to the EU's general exception for regional economic integration agreements (which would permit EU member states to discriminate against non-members), and, in solidarity with the USCIB, was quite disappointed at the recent rejection of "fast track" negotiating privileges for the president by the US Congress. [88] _________________________________________________________________ KEIDANREN _________________________________________________________________ Keidanren, the most representative Japanese business coalition with over 1000 members (including Toyota, Mitsubishi, Nissan, Sony, Sakura Bank and Nippon Steel Corporation), has also been active pushing for the MAI. As Japan and South Korea are the only Asian OECD members, Keidanren's main goal is to sign as many developing countries as possible on to the MAI. Thus, while urging that the MAI remain a high standard agreement, it recommends flexibility to facilitate the membership of non-OECD countries. In addition, Keidanren has joined forces with UNICE to encourage the creation of a multilateral framework on investment at the WTO [89] and simultaneously urges investment liberalization through bilateral and regional agreements such as APEC. Although generally pleased with MAI developments, Keidanren is disappointed that two of its main objectives -- taxation and key personnel (which allows special privileges for corporate staff) -- have been carved out of the agreement. The Japanese lobby group is also trying to reduce general exemptions to the bare minimum, for instance strongly opposing REIO (Regional Economic Integration Organization) clauses such as the one proposed for EU members and rejecting extra-territoriality (such as the US Helms-Burton act that punishes corporations active in Cuba), yet preferring that all sub-national levels of governments be fully bound by MAI. Though less aggressively than its US partners, Keidanren worries that additional labour and environmental regulations would prevent non-OECD members from signing on to the MAI. [90] ================================================================ World Business Council on Sustainable Development Greenwashing the MAI? ================================================================ The World Business Council for Sustainable Development (WBCSD) has only recently stepped up its involvement in the MAI. Masquerading behind its carefully-cultivated image as a "green" industry lobby group, [91] the WBCSD has been tremendously successful in promoting global market liberalization and self-regulation by business instead of government intervention as the recipe for sustainable development. The WBCSD approach has left its mark on for instance the 1992 Rio Declaration and the climate treaty which emerged from Kyoto in December of 1997. It is not surprising that the WBCSD has come out strongly in favour of the MAI, despite acknowledging potential problems. The 15 January 1998 BIAC consultation was the first time that the business council's secretariat participated in official consultations on the MAI. In general, the group's involvement has been on the informal level. Stigson has attended various BIAC meetings, and is a member of its environment committee. Several WBCSD member companies are represented in BIAC, and the secretariats of both organizations interact and share relevant information. [92] WBCSD president Bjorn Stigson has also expressed his concern in writing to OECD official Don Johnston about the inclusion of binding language on environmental standards in the MAI, and in the same letter has generally promoted the WBCSD's gospel of business self-regulation. [93] Quoting Agenda 21, [94] Stigson argues that "trade liberalization is a positive force for supporting the most environmentally and economically efficient use of goods and resources, and hence for contributing to sustainable development." He then concludes that "investment liberalization is a close relative of trade liberalization, and can be expected to produce a similar positive impact." He expects that the greatest benefits will arise from the inclusion of Third World countries in the MAI. Stigson acknowledges possible conflicts between new environmental regulation and the MAI, and suggests these could be solved by "making explicit the types of assurances that business and many negotiators say is already in the agreement, while maintaining the very important goals of the MAI." He suggests that the reference to NAFTA Section 114.1 in the MAI draft already "ensures all stakeholders a balanced implementation of the agreement in dispute resolution processes". This, however, is hardly reassuring -- this very clause did not prevent the US Ethyl Corporation from challenging a Canadian environmental law as an expropriation in a NAFTA court last year. In his letter, Stigson expresses strong reservations about a provision under which countries would obligate themselves not to reduce their environmental standards in order to attract or maintain investments, be it non-binding or mandatory. He does not altogether reject mandatory provisions, provided these can be really enforced and will bring clear benefits. Stigson also recognizes that MAI could encourage companies to shift investment to pollution havens. Rather than including environmental standards for investments in the MAI, he suggests the WBCSD 'solution': "sound environmental management systems as an alternative to command and control environmental standard setting." ================================================================ Resources ================================================================ CEO Publications For more information about the European and international lobby groups described in this briefing, the following publications are available from Corporate Europe Observatory: "Europe, Inc.: Dangerous Liaisons Between EU Institutions and Industry" (72 page report, May 1997, 15 guilders or equivalent) "The Weather Gods: How Industry Influenced The Kyoto Climate Summit" (briefing, November 1997) Corporate Europe Observer (CEO's quarterly newsletter, first issue October 1997) Books on MAI: "The MAI and the Threat to Canadian Sovereignty", Tony Clarke and Maude Barlow, Stoddard Publishing, Toronto, 1997. Can be ordered via The Council of Canadians or the Canadian Polaris Institute (info below). Some reports and briefings on MAI: "A Dangerous Leap into the Dark - Implications of the Multilateral Agreement on Investment (MAI)", World Development Movement briefing paper, November 1997. WDM, 25 Beehive Place, London SW9 7QR, UK. E-mail: , web site: http://www.oneworld.org/wdm/ "Globalization, the Multilateral Agreement on Investment, and the Increasing Economic Marginalisation of Women", The Preamble Center for Public Policy. 1737 21st Street, N.W., Washington, D.C. 20009, US. E-mail: , web site: http://www.rtk.net/preamble/ "The Impact of the MAI on Employment, Growth and Income Distribution", The Preamble Center on Public Policy (see above) Web Sites * MAI-Not! Discussion Group http://mai.flora.org/mai-info/ An interactive campaign site with links to an e-mail listserver, newsgroup, and message archive. * Multinational Monitor http://www.essential.org/monitor/ * "MAI? No thanks...!" http://mai.flora.org/library / http://www.geocities.com/athens/3565/nomai.html * The Island Centre for Community Initiatives and the National Centre for Sustainability in Canada. http://www.islandnet.com/~ncfs/maisite/ * The Canadian Polaris Institute http://www.nassist.com/mai/ * Council of Canadians http://www.web.net/~coc/ * OXFAM http://www.oxfam.org.uk/ * Third World Network http://www.southside.org.sg/ * Preamble Collaborative http://www.rtk.net/preamble/ Includes a 20-page bibliography of MAI materials from around the world. * Friends of the Earth US http://www.foe.org/ga/mai.html * Public Citizen's Global Trade Watch http://www.citizen.org/pctrade/tradehome.html Includes the complete MAI text * The Organization for Economic Cooperation and Development (OECD) http://www.oecd.org/daf/cmis/mai/maindex.html * The US Trade Representative http://www.ustr.gov/ * The US Department of State http://www.state.gov/ * The International Chamber of Commerce http://www.iccwbo.org/ * The US Council for International Business http://www.imex.com/uscib/ * Keidanren http://www.keidanren.or.jp/ * UNICE http://www.firewall.brainstorm.co.uk/CBI/public/UNICE.html * European Roundtable of Industrialists http://www.ert.be/ * World Business Council for Sustainable Development http://www.wbcsd.org/ * World Trade Organization http://www.unicc.org/wto/ ====================================================================== For a HTML version of this briefing, point your browser at: http://www.xs4all.nl/~ceo/mai/ Copyright: Corporate Europe Observatory, February 1998 We encourage you to spread this briefing or to use the information contained in it. In the latter case we would very much appreciate if you could send us a copy of your article or publication. CEO stands for Corporate Europe Observatory. We are an Amsterdam- based non-profit organisation set up to monitor and report on the political activities of European corporations and their lobby groups. For comments, question and suggestions, contact: Corporate Europe Observatory (CEO) Prinseneiland 329 1013 LP Amsterdam The Netherlands Tel/fax: +31-30-2364422 E-mail: Web site: http://www.xs4all.nl/~ceo/ If you have any questions and/or remarks regarding this briefing, please contact Corporate Europe Observatory c/o Prinseneiland 329, 1013 LP Amsterdam, Netherlands Tel/fax: +31-30-2364422, E-mail: ceo@xs4all ====================================================================== FOOTNOTES ====================================================================== [1] European Commission Press Release: "Commission Launches Discussion Paper on Worldwide Investment Rules". IP/95/52, 19 January 1995. [2] ICC report "Multilateral Rules for Investment", 30 April 1996. [3] Financial Times, 2 February 1998 [4] Source: OECD web site -- http://www.oecd.org/ [5] Ibid. [6] Interview with Jan Huner, deputy of Mr. Engering, head of the MAI negotiations, 28/1 1998. Huner did not mention Slovakia, which has previously often been mentioned as a candidate. [7] For an extensive overview of glocalization and other new corporate market strategies, see the article "Who Competes? Changing Landscapes of Corporate Control," Nicholas Hildyard, Colin Hines and Tim Lang, The Ecologist, Vol. 26, No. 4, July/August 1996. [8] Based on UNCTAD figures, Third World Resurgence, no. 79, p.18. [9] Testimony by Lori Wallach, Public Citizen, before the US Congress International Trade Commission, 15 May 1997. [10] UNCTAD World Investment Report 1997. [11] "International Investments", drs. P. Schuurman and drs. J.P. Huner, discussion paper for the Directorate General for Foreign Economic Relations, The Hague, February 1996. [12] Interview with Jan Huner, OECD, 28 January 1998. [13] William H. Witherell, Director for Financial, Fiscal and Enterprise Affairs at the OECD, in "The OECD Multilateral Agreement on Investment", Transnational Corporations, vol. 4, no. 2, August 1995, p. 8. [14] "These groups dealt, respectively, with liberalization obligations under existing OECD instruments, liberalization obligations in new areas, investment protection, dispute settlement and the involvement of non-members and institutional matters." Idem. [15] Witherell, p. 12. The bulk of these consultations were with the members of the OECD's advisory group on investment, which includes the Central and Eastern European countries, and in 'policy dialogue workshops' with Southeast Asian and Latin American countries. [16] Under the 1975 Lome Convention, the 70 ACP countries were allowed duty-free exports into the EU as a form of aid. The Lome Convention is now being renegotiated. [17] This was reported to have happened for instance at the meeting between EU and ACP countries in Kampala, Uganda in October 1997. Third World Network Features, 1680/97, Roberto Bissio, p. 3. [18] As the Dutch OECD negotiators wrote in their first report to the Dutch Parliament, "the function of the treaty that will be agreed upon in the OECD framework is precisely to give the other WTO countries an idea of what kind of elements a multilateral policy framework contains. The MAI therefore fulfils a catalyzing role in the further development of policy consensus in this field." Secretary of State for Economic Affairs Van Dok-van Weelen in her first report on the MAI to the Dutch Parliament, "De onderhandelingen binnen de OESO inzake een Multilateraal Akkoord over investeringen", 2 November 1995. [19] "The Multilateral Investment Agreement", by Frans Engering, in Transnational Corporations, vol. 5, no. 3 (December 1996). [20] USCIB Investment Committee, USCIB web site. [21] Cases would be facilitated by the International Chamber of Commerce's (ICC) Court of Arbitration, the World Bank's International Centre for the Settlement of Investment Disputes [ICSID) or the UNCITRAL rules (UNCITRAL is an UN agency which has developed rules for arbitration in international commercial disputes). [22] USCIB Investment Committee, USCIB web site. [23] Confidential official source. [24] ICC Commission on International Trade and Investment Policy, Document n. 103/179 Rev., April 30th 1996. [25] Report to the Dutch Parliament, November 1995, Secretary of State for Economic Affairs Van Dok-van Weelen, p. 4 (our translation). [26] Idem. [27] According to Dutch negotiator Marinus Sikkel at public hearing on the MAI in Utrecht, the Netherlands, 3 February 1998. [28] NGOs called for the suspension of negotiations to allow for public participation in the negotiations, "an independent and comprehensive assessment of the social, environmental, and development impact of the MAI with full public participation," the observation of binding environment, labour, health, safety and human rights standards, the elimination of the investor state dispute settlement mechanism as well as the expropriation provision of the MAI, and the renegotiation of the terms of withdrawal". [29] Chairman's Opening Remarks, 15 January 1998, p. 1. [30] BIAC consultation, 15 January 1998. [31] US Council on International Business web page. [32] TUAC web page [33] TUAC's concrete demands are the incorporation of the OECD Guidelines for Multinational Enterprises into the MAI, a structure to ensure the implementation of the guidelines, the commitment to enforce basic workers' rights, and the provision that foreign investment must not violate domestic or internationally recognized labour standards. "The Multilateral Agreement on Investment: Key Issues for Trade Unions", TUAC Briefing Note for Affiliates, September 1997. [34] Interview with Roy Jones, TUAC secretariat, 26 January 1998. [35] This shared responsibility is not clearly defined in any EU treaty, but is based on a decision by the European Court of Justice on the Uruguay Round of the GATT. MEPs have asked about the Commission about this shared responsibility and received vague responses. [36] Sir Leon Brittan in a speech on investment at a conference organized by the Royal Institute for International Affairs (Chatham House) and the London School of Economics. Quoted in a European Commission Press Release: "Commission Calls on European Business to Intensify Worldwide Investment Efforts. IP/95/269, 17 March 1995. [37] Draft Report on the Negotiations in the Framework of the OECD on a Multilateral Agreement on Investment (MAI), Committee of External Economic Relations, 17 December 1997. [38] "Competition on rules" refers to steps that governments take to attract foreign investors, and may include relaxing environmental and social regulations, tax breaks, the establishment of free trade zones, and so forth. [39] World Investment Report 1997. [40] Financial Times, 2 February 1998 [41] This consensus was confirmed at several 1995 summits, including the Halifax G-7 Summit in June and the Trans-Atlantic Summit between the EU and US in December. [42] EU Commissioner Sir Leon Brittan explained the two-track   strategy as follows: "We must tell our non-OECD partners in the WTO what we are doing among ourselves, overcome their fears that an investment initiative goes against their interests, and prepare the ground for decisions in the inaugural WTO Ministerial in the Autumn of 1996. By then, the OECD will be nearing the end of a planned two-year negotiation: WTO will be well placed to consider a complementary negotiating mandate to free investment flows worldwide." Source: see footnote 36. [43] Taken from a speech by Sir Leon Brittan at the Stockholm Trade Policy Seminar, 23 October 1995. [44] Martin Khor in Third World Network Features 1409/96. [45] For instance in "European Industry: A Partner for the Developing World. Foreign Direct Investment as a Tool for Economic Development and Cooperation - Suggestions for Future Improvement", ERT, 1993, p. 35. [46] Chakravarthi Raghavan in Third World Network Features, 1404/96, p. 1. [47] Chakravarthi Raghavan in Third World Network Features, 1527/96. [48] The eight countries were Egypt, Indonesia, Ghana, Haiti, India, Malaysia, Tanzania and Uganda. The position of the eight countries was later echoed by the 11 trade ministers of the Southern African Development Community (SADC). Martin Khor, Third World Network Features, 546/96, p. 5. [49] Idem, p. 4. [50] Idem [51] "The Outcome of Singapore - Statement by Sir Leon Brittan -- Vice-President of the EU Commission", 13 Dec 1996, IP/96/1172. [52] Martin Khor, Third World Network Features, 1547/96, p.4. [53] Interview with Mr. Koulen, WTO Division for Intellectual Property Rights and Investment, 30 January 1998. [54] Report (1997) to the General Council. [55] "Investment Liberalization: A New Issue for the WTO", address by the Right Honourable Sir Leon Brittan, Vice-President of the European Commission, Cologne, 11 June 1996. [56] "World business urges global investment pact", ICC Statement from November 11, 1996. The World Investment Forum took place 10 October 1996 in Geneva, Switzerland. Douglas A. Gregory of IBM Canada Ltd and ICC Secretary General Maria Livanos Cattaui. [57] The Nation, 24 December 1997. [58] The Chambers of Commerce are organized in the International Bureau of Chambers of Commerce (IBCC) [59] Interview January 29 1998 with Vincent J. O'Brien, Deputy Director of Communications, ICC. [60] ICC - The World Business Organization in 1997, p. 4. [61] ICC Commission on International Trade and Investment Policy, Document no. 103/179 Rev., 30 April 1996. [62] Ibid, p. 3. [63] A think tank, research and lobby group representing some 47 of the largest European transnational corporations in Europe, for more information see "Europe, Inc.", information in the Resource section of this briefing. [64] ERT, "European Industry and the Developing World -- For a Global Framework of Mutual Interest and Trust", June 1997, p.9. [65] ERT, "European Industry: A Partner for the Developing World. Foreign Direct Investment as a Tool for Economic Development and Cooperation - Suggestions for Future Improvement", 1993, p. 35. [66] ERT, "Investment in the Developing World: New Openings and Challenges for European Industry", December 1996, p.13. [67] ERT, "Survey on Improvements in Conditions for Investment in the Developing World, 1993. [68] ERT, "Investment in the Developing World: New Openings and Challenges for European Industry", December 1996, p.13. [69] Peer review is a traditional system at the OECD in which countries are encouraged to reach common positions in a committee rather than through a dispute settlement procedure. Source of this section: ERT, European Industry and the Developing World - For a Global Framework of Mutual Interest and Trust, June 1997, p.9. [70] Idem, Foreword by Helmut Maucher. [71] Idem p. 5. [72] UNCTAD Press release, 8 December 1997. [73] Phone conversation with UNICE, January 1998. [74] Joint statements from UNICE and Keidanren, 23 November 1995 and 13 December 1996. [75] Source: USCIB web site, http://www.imex.com/uscib/) [76] Honeywell and General Electric were the first two companies investigated under NAFTA's side agreement for labour violations in their Mexican maquiladoras. Source: "USCIB's Corporate Crime Blotter, or Levelling the Playing Field for Felons", Michelle Sforza, Preamble Collaborative, draft January 1998. [77] USCIB web site [78] USCIB press release, 24 May 1995. [79] Idem. [80] Idem. [81] USCIB's President Abraham Katz, letter to US Trade Representative Charlene Barshefsky. [82] USCIB President Abraham Katz's letter to US Deputy Trade Representative Jeffrey Lang, "USCIB Concerns with Environmental Provisions for the MAI", 11 July 1997. [83] The Washington Times is well known for the sympathetic representation of business interests in its pages. Fred Singer, leader of the Science and Environment Project, an industry lobby which organized an aggressive misinformation campaign against climate change prevention, is on the newspaper's council. [84] Timothy E. Deal, Senior Vice President, USCIB, "Why We Need the Multilateral Agreement on Investment" in the Washington Times, 25 December 1997. [85] Idem. [86] The FTA was the basis for the NAFTA agreement. [87] Stuart Carre, BCNI, in front of the Sub-Committee on International Trade, Trade Disputes and Investment of the Standing Committee on Foreign Affairs and International Trade, 25 November 1997. [88] "This has cast a pall of uncertainty over the ability of US negotiators to deliver on any negotiated trade and investment agreements, and that includes the MAI." Idem. [89] Statement by Keidanren and UNICE at the WTO Ministerial Conference, Singapore, 13 December 1996. [90] Keidanren's Views on MAI Negotiations, 17 June 1997 [91] The WBCSD has many renowned corporate polluters as members -- including British Petroleum, Cargill, Fiat, General Motors, ICI, Lafarge, Monsanto, Nestle, Philips, Procter & Gamble, Rio Tinto Zinc, Son, Statoil, Texaco, Toyota, Unilever, Volvo, Waste Management International, Western Mining Corporation and Weyerhaeuser. [92] E-mail from Marcel Engel, WBCSD, 29-01-98. [93] Letter dated 9 January 1998. [94] The Action Plan which came out of the 1992 Rio Earth Summit. [End Of File]