old fish smells!
The Giant Sucking Sound Of The Other Chapter 11
> Filed January 31, 2002
>
> Chapter 11 is all the rage right now. And many of the biggest, the best
and the brightest corporations are doing it. But while the
multibillion-dollar bankruptcies of Enron and Global Crossing are grabbing
all the headlines, there is another Chapter 11, one you most likely haven't
heard of, that poses an equally great danger to our democracy.
>
> The "other" Chapter 11 is an obscure clause buried within the 555-page
NAFTA document. It's being used by multinational corporations "to challenge
the powers of government to protect its citizens, to undermine environmental
and health laws, even to attack our system of justice."
>
> So reports Bill Moyers in a disturbing new documentary, "Trading
Democracy," airing Tuesday, Feb. 5 on PBS. According to Moyers, the fourth
estate's preeminent defender of democracy, this outrageous end-run around
the Constitution could end up costing us billions of dollars. But, as they
say, at least we've got our health, right? Not with this Chapter 11 that
jeopardizes both our health and the safety of the communities we live in.
>
> "This story," Moyers told me, "reflects what Enron is all about -- that
corporations have the power to trump the public interest at will these days.
It's not just one corruption in a small corner of the picture. It represents
the systemic corruption that money has brought to American politics."
>
> In theory, Chapter 11 is designed to compensate companies if foreign
governments seize their property. But the lawyers who helped draft NAFTA
inserted language making it possible for companies to also seek compensation
when government regulations cause a dip in their future bottom line. Many of
these same lawyers are now selling their services to the very corporations
using their legal handiwork to sue for millions.
>
> Just how business-friendly is the provision? "They could be putting liquid
plutonium in children's food," says Moyers, quoting a trade lawyer's advice
to the Canadian government. "If you ban it and the company making it is an
American company, you have to pay compensation."
>
> About two dozen companies have cashed in, or are in the process of trying
to cash in, on Chapter 11. Among the outrages Moyers exposes is the case of
Methanex, a Canadian corporation that is suing the U.S. government for $970
million because California decided to phase out a cancer-causing gasoline
additive the company produced.
>
> But even more egregious than the notion that taxpayers should have to pay
off polluters is the fact that the cases are ruled on behind closed doors,
by a secret NAFTA tribunal whose decisions are not subject to appeal in U.S.
courts. That's right, if Methanex wins, we'll have to foot the bill, but
we'll never know exactly why because we don't have the right to hear the
facts.
>
> That giant sucking sound you hear is the public good being slurped up by
voracious corporate interests.
>
> But it's not just foreign companies suing Uncle Sam. Moyers shows us what
happened in Mexico when a U.S. firm's efforts to reopen a toxic waste dump
south of the border were thwarted by local citizens convinced that the
noxious landfill had led to a boom in cancer cases in the region. The
company, Metalclad, invoked Chapter 11 and was awarded $16 million in
compensation.
>
> The mere threat of these mega-buck claims is now being used to intimidate
government officials considering new regulations. In "Trading Democracy,"
Moyers reveals how big tobacco used their high-powered lobbyists and the
threat of a massive Chapter 11 lawsuit to bully the Canadian government into
backing off on its plans to regulate cigarette packaging.
>
> As William Greider, author of "Who Will Tell The People," puts it to
Moyers: "If you're a civil servant, or even a political leader, you've gotta
think twice when a corporate lawyer comes to you and says, quite forcefully,
we're gonna hit you for half a billion dollars if you do this."
>
> In an interesting wrinkle, the tobacco companies' arm-twister-in-chief was
Carla Hills, who, before starting her own consulting firm, led -- surprise,
surprise -- the U.S. negotiation of NAFTA, and whose firm was among 29
corporate heavyweights that signed a letter last year to U.S. Trade
Representative Robert Zoellick demanding that the Chapter 11 provision be
included as the administration seeks to expand NAFTA to 31 additional
countries.
>
> And round and round it goes. Where it stops, we don't know exactly -- what
with the tribunals being secret, and all. But we have a pretty good idea:
more carcinogens in your water, more toxic chemicals in your air, and more
misbegotten profits for unscrupulous corporations with deep pockets and
teams of well-connected lawyers.
>
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