Could the Trans Pacific Partnership’s Corporate Tribunals Overturn the Obama Administration’s Keystone XL Decision?

11.12.15 Post by Erik Hatlestad


Last week the Obama Administration announced two major climate and trade policy decisions that have drawn heated discussion for years.

Friday morning the President announced that his administration would reject the Keystone XL Pipeline.  This pipeline, which would have crossed the entire United States from Montana to Texas, would carry oil from the Alberta tar sands to refineries on the Gulf Coast for export.  Activists have taken drastic steps to slow down the project’s approval process which was begun in 2008, and seemingly this morning we were given a victory.

However, on Thursday Nov. 5 the full text of the Trans Pacific Partnership (TPP) was released with full support from the Obama Administration.  This agreement involves countries on four continents around the Pacific Ocean including the U.S., Japan, Brunei, Chile, and Australia and has been described by some as “NAFTA on steroids.”  There are many criticisms of free trade agreements, and the TPP in particular, but one most concerning is what is commonly known as “corporate tribunals.”  These tribunals give power to corporations to sue governments, undermining abilities that we rely on to protect the environment, labor standards, and healthy communities.  

According to Public Citizen:

“Among the most dangerous but least known parts of today’s “trade” agreements are extraordinary new rights and privileges granted to foreign corporations and investors that formally prioritize corporate rights over the right of governments to regulate and the sovereign right of nations to govern their own affairs. These terms empower individual foreign corporations to skirt domestic courts and directly challenge any policy or action of a sovereign government before World Bank and UN tribunals.

Comprised of three private attorneys, the extrajudicial tribunals are authorized to order unlimited sums of taxpayer compensation for health, environmental, financial and other public interest policies seen as frustrating the corporations’ expectations. The amount is based on the “expected future profits” the tribunal surmises that the corporation would have earned in the absence of the public policy it is attacking. There is no outside appeal. Many of these attorneys rotate between acting as tribunal “judges” and as the lawyers launching cases against the government on behalf of the corporations. Under this system, foreign corporations are provided greater rights than domestic firms.”  


While corporations have had these powers under agreements like NAFTA, the TPP would drastically increase U.S. vulnerability to corporate attacks on the public interest.

So, while we are celebrating the defeat of Keystone XL, we need to ask the question, “Could the TPP be a backdoor for pipeline development in the future? Could TransCanada, or other oil companies, use their extra judicial corporate powers push pipelines through without public oversight?”

The answer is not yet clear, but it is something that the Obama Administration and other supporters of the TPP need to answer.

For those of you who are interested in some light reading here is Chapter 28 of the Trans Pacific Partnership.


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