TTIP won't stop public services being run for ordinary people? Tell that to Argentina
Now it's Argentina's turn to be sued in a secret 'free trade' court run by the World Bank, writes Nick Dearden. After bringing a profiteering water company that was missing all its service and quality targets back into public ownership, the country has been ordered to pay $405 million 'compensation'.
Another week, another victory for big business over a government in a secret pseudo-court.
This time it's the turn of private water giant Suez, who successfully sued Argentina for reversing the privatisation of Buenos Aires's water supply.
No matter that the country was in a state of economic crisis when the nationalisation took place, and the government didn't want water prices to rise by 60%.
No matter that the company time and again failed to meet its performance targets. In the world of corporate courts, nothing matters except an investor's 'right' to profit.
Yet it is exactly this system of so-called Investor State Dispute Settlement (ISDS) that we will be signing up to if the US-EU trade deal known as TTIP goes ahead.
Last time I wrote about this it was Canada in the firing line - successfully sued for turning down a large quarry which would have caused severe environmental damage in Nova Scotia, threatening a whale haven with dynamite blasts and heavy shipping. Taxpayers may have to pay as much as $300 million in compensation.
The 'free trade emperors' have no clothes
Yet again and again government ministers tell us there's nothing to fear. Nothing in TTIP will prevent us running public services in the way we choose, they insist, or from regulating business in the public interest.
Try telling that to Argentina, which now 'owes' $405 million, according to one such corporate court, this one based in the World Bank - which just happened to also be a shareholder in the Suez-run private water scheme.
The story began when a free market government in Argentina privatised Buenos Aires's water supply back in 1993,egged on by the World Bank.
The story began when a free market government in Argentina privatised Buenos Aires's water supply back in 1993,egged on by the World Bank. A 30-year concession was given to a group headed by Suez, which promised to make water access universal and improve the water quality to meet international standards, all while maintaining reasonable tariffs.
From the start, targets were repeatedly not met, while tariffs increased, and the performance indicators were renegotiated. By 2002, average residential tariffs had increased by 88%, while inflation had only increased by 7%. Investment was below what had been promised, debt ballooned, but the profits kept rolling in.
In 2001-2, Argentina went through a dramatic crisis, exacerbated by international lenders like the International Monetary Fund, which caused mass impoverishment. As the country was rebuilt, emergency laws were passed to save Argentina's people from further deprivation.
With the private water company threatening another massive price rise, the government of Nestor Kirchner passed an emergency law to bring the company into public ownership.
When putting human rights before profit is a 'trade crime'
Argentina has been hounded by cases like this ever since its economic crisis. That's because the Argentinian government at the time took serious action to place human rights before corporate interests, telling big business they couldn't profit from misery.
Some of these cases have seen Argentina paying out, others have been resisted, turning into odious debts which hedge funds (known as vultures) use to threaten the country to this day.
This particular case has been brought under a bilateral trade agreement between Argentina and France. But the central mechanism is the same as that which is being proposed under TTIP and a separate treaty which the EU is about to ratify with Canada (known as CETA).
These agreements will allow tens of thousands of corporations access to these secret pseudo-courts to take exactly this type of action against European governments.
Argentina has at least 20 more cases like this pending, arising mostly from the government trying to regulate energy and water prices, which is exactly what the Labour Party is promising to do in the upcoming general election.
What's more, the threat of these corporate courts is having a much wider impact on governments' willingness to even try to represent their people. As senior barrister Toby Landau says:
"No state wants to be brought under a treaty to an international process. It has an impact upon diplomatic relations, it may have an impact upon a state's credit standing ...
"As a practitioner I can tell you that there are states who are now seeking advice from counsel in advance of promulgating particular policies in order to know whether or not there is a risk of an investor-state claim."
The European Parliament has a vote on TTIP in June. This case should make absolutely clear to MEPs that the ISDS system must be a red line not to be crossed by any political party that cares about democracy.
What has all this to do with Irish Water
Section 5 Name and Share Capital of Subsidiary is the most important section, relevant to this article, in the Water Services Act 2013. In it Board means Bórd Gáis Éireann (Ervia). It states:
(4) One share in the company shall be issued to the Board, and, of the remaining shares in the company, half shall be issued to the Minister and half shall be issued to the Minister for Finance.
(5) No voting rights in the company shall attach to any of the shares issued to the Minister or the Minister for Finance in accordance with subsection (4).
(6) The Board shall not, without the consent of the Minister and the Minister for Finance, alienate the share issued to it in accordance with subsection (4).
Everything Set up for Privitisation
Everything is set up to privatise Uisce Éireann (Irish Water). All that it would take are two signatures, one from the Minister for Environment and the other from the Minister for Finance. We have seen in the past number of years a proliferation of our state's assets being sold off. So why not Uisce Éireann, especially when the IMF are involved. See Vincent Browne on privatisation of Irish Water in buncranatogether. When the TTIP, EU-US trade deal is signed up to, then everything will be complete and like Argentina whoever is in control of Uisce Éireann could and would sue the Irish Government.
Article by Jason Coffey
in response to this journal.ie article Sinn Féin say they’d abolish your water charges.
Irish Water is a private company limited by shares. It is a legal entity that cannot be simply abolished. Reason why it cannot be abolished is because the Irish Government does not own it. We own 99% of it. Bord Gáis (Ervia) own a single share. But this is the most important share. It is the share that controls how the company operates. When setting up the company, it was carefully worded so that the other 99 shares have no voting power on how the company is run. See Water Services Act 2013: http://www.irishstatutebook.ie/pdf/2013/en.act.2013.0006.pdf
Government Planning For Privitisation
As soon as Bord Gais got this very important share/windfall, they split it up and put Bord Gáis Energy on the market. Bord Gáis Energy was splintered off from semi-state Bord Gáis Éireann and sold to a consortium including Centrica and two partners for €1.1 billion. The rest of Bord Gáis was rebranded Bord Gáis Éireann and then this name was changed to Ervia. While Irish Water claims to be run by Bord Gáis, the Bord Gáis name was transferred to Centrica. Basically Enda Kenny doesn’t want to tell the Irish people that his government has no control whatsoever in the way Irish water conducts itself even though we own 99% of the shares. Irish Water is a legal entity that cannot be abolished because we do not own all of it.
Sinn Féin wants To abolish Irish Water
If Sinn Féin or any other party wanted to abolish Irish Water, they would first have to buy back that 1% share. Ervia (Bord Gáis Éireann) can charge whatever they like for that share, and don't need to sell it if they don't want to. Ervia has the legal right to run Irish Water as it sees fit. Companies are entities with the sole purpose of making profit. Just because Irish Water was originally set up to provide water services, in the future Ervia may decide to sell its share to a less ethical international organization who may if they see fit decide to sell your private personal data to marketing companies (as this may see a faster and much more profitable income).
Buncrana Together will follow this up with some articles on TTIP EU-US trade agreement
Best thing to counter Irish Water
The best thing that can be done is limit the amount of people that have no option but sign up to irish water. More Private group Schemes, Private Wells and personal harvesting of water needs to happen. This would change the monopoly of the market Irish Water currently has. Regardless of what Enda Kenny tells you, if you do not use Irish Water Services, and there is no contract that you signed, they cannot charge you. They cannot make an illegal estimate of your usage unless they can prove that you use their services solely. They cannot force you legally to provide them with this information. They have no legal entitlement to know who resides at your residence. They have no right to your pps details or any other information that cannot be obtained via the public record. Private Personal Data is your Information, not Enda Kennys.
Mary Lou Honest Comment
Mary Lou’s comment (Journal.ie)that some opposition parties are trying to take out of context “If a scenario arises where we are in a position to reverse them, we will reverse them — that is our commitment.” It is a very honest comment. She is not lying with this promise. If Sinn Féin were in government and the opportunity arose were it possible to undue the damage caused by Enda Kenny, and buy back the single share owned by Ervia, it is their promise that they would do this.
But it is cock and bull to say that they would just simply abolish something that isn’t theirs as some of the others are claiming. No political party has the power to destroy a legal company they don’t own. Best thing to do with Irish Water is give them as little information as possible. The less information they have, the less attractive our information is for marketing purposes, and the cheaper it will be for us to buy back our 1% share.