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Andrea Durbin, Friends of the Earth, US Andrea Durbin <[email protected]>

JOINT NGO STATEMENT ON THE

MULTILATERAL AGREEMENT ON INVESTMENT (MAI)

NGO/ OECD Consultation on the MAI

Paris: 27 October, 1997

INTRODUCTION

As a coalition of development, environment and consumer groups from around the world, with representation in over 70 countries, we consider the draft Multilateral Agreement on Investment (MAI) to be a damaging agreement which should not proceed in its current form, if at all.

There is an obvious need for multilateral regulation of investments in view of the scale of social and environmental disruption created by the increasing mobility of capital. However, the intention of the MAI is not to regulate investments but to regulate governments. As such, the MAI is unacceptable.

MAI negotiations began in the OECD in the Spring of 1995, more than two years ago, and are claimed to be substantially complete by the OECD. Such negotiations have been conducted without the benefit of participation from non-OECD countries and civil society, including non-governmental organizations representing the interests of workers, consumers, farmers or organizations concerned with the environment, development and human rights.

As a result, the draft MAI is completely unbalanced. It elevates the rights of investors far above those of governments, local communities, citizens, workers and the environment. The MAI will severely undermine even the meagre progress made towards sustainable development since the Rio Earth Summit in 1992.

The MAI is not only flawed in the eyes of NGOs, but conflicts with international commitments already made by OECD member countries:

The MAI fails to incorporate any of the several relevant international agreements such as the Rio Declaration; Agenda 21; UN Guidelines for Consumer Protection (1985); the UNCTAD Set of Multilaterally Agreed Principles for the Control of Restrictive Business Practices (1981); and the HABITAT Global Plan of Action.

The MAI fails to comply with OECD commitments to integrate economic, environmental and social policies (1).

The MAI removes responsibilities on transnational enterprises which were previously agreed by the OECD under the OECD Guidelines for Multilateral Enterprises 1976 (2).

The exclusion of developing countries and countries in transition from the negotiations is inconsistent with OECD policy on development partnerships (3).

Problems with the MAI stem both from the broad restrictions it places on national democratic action, and from its failure to include sufficient new systems of international regulation and accountability.

As the MAI stands, it does not deserve to gain democratic approval in any country. All the groups signing this statement will campaign against its adoption unless changes, including those cited below, are incorporated into the body of the MAI.

SUBSTANTIVE CONCERNS

As drafted, the MAI does not respect the rights of countries - in particular countries in transition and developing countries - including their need to democratically control investment into their economies.

The level of liberalisation contained in the MAI has already been opposed as inappropriate by many developing countries. However, non-OECD countries are under increasing pressure to join.

There are differing investment and development needs of OECD and non-OECD countries. In particular, the potential for economic diversification and development of the developing countries - especially the least developed countries - and countries in transition would be severely undermined by the provisions of the MAI. The standstill principle would cause particular problems for countries in transition, many of which have not yet developed adequate business regulation.

The MAI's withdrawal provision would effectively bind nations to one particular economic development model for fifteen years; prevent future governments from revising investment policy to reflect their own assessment of the wisest economic course; and force countries to continue to abide by the agreement even if there is strong evidence that its impact has been destructive.

The MAI contains no binding, enforceable obligations for corporate conduct concerning the environment, labour standards and anti-competitive behaviour. The MAI gives foreign investors exclusive standing under a legally binding agreement to attack legitimate regulations designed to protect the environment, safeguard public health, uphold the rights of employees, and promote fair competition.

Further, citizens, indigenous peoples, local governments and NGOs do not have access to the dispute resolution system, and subsequently can neither hold multinational investors accountable to the communities which host them, nor comment in cases where an investor sues a government.

The MAI will be in conflict with many existing and future international, national and sub-national, laws and regulations protecting the environment, natural resources, public health, culture, social welfare and employment laws; will cause many to be repealed; and will deter the adoption of new legislation, or the strengthening of existing ones.

The MAI is explicitly designed to make it easier for investors to move capital, including production facilities, from one country to another; despite evidence that increased capital mobility disproportionately benefits multinational corporations at the expense of most of the world's peoples.

WE CALL ON THE OECD AND NATIONAL GOVERNMENTS TO:

With regard to substantive concerns:

1) Undertake an independent and comprehensive assessment of the social, environmental, and development impact of the MAI with full public participation. The negotiations should be suspended during this assessment.

2) Require multinational investors to observe binding agreements incorporating environment, labour, health, safety and human rights standards to ensure that they do not use the MAI to exploit weak regulatory regimes. Ensure that an enforceable agreement on investor responsibilities takes precedence over any agreement on investor rights.

3) Eliminate the investor state dispute resolution mechanism and put into place democratic and transparent mechanisms which ensure that civil society, including local and indigenous peoples, gain new powers to hold investors to account.

4) While none of the undersigned NGOs object to the rights of investors to be compensated for expropriation by a nation state, there are adequate principles of national law and jurisprudence to protect investors in circumstances such as these. The current MAI exceeds these well accepted concepts of direct expropriation, and ventures into areas undermining national sovereignty. We therefore request that OECD members eliminate the MAI's expropriation provision so that investors are not granted an absolute right to compensation for expropriation. Governments must ensure that they do not have to pay for the right to set environmental, labour, health and safety standards even if compliance with such regulations imposes significant financial obligations on investors.

With regard to process concerns:

1) Suspend the MAI negotiations and extend the 1998 deadline to allow sufficient time for meaningful public input and participation in all countries.

2) Increase transparency in the negotiations by publicly releasing the draft texts and individual reservations and by scheduling a series of on going public meetings and hearings in both member and non member countries, open to the media, parliamentarians and the general public.

3) Broaden the active participation of government departments in the official negotiations beyond state, commerce and finance to a broader range of government agencies, ministries and parliamentary committees.

4) Renegotiate the terms of withdrawal to enable countries to more easily and rapidly withdraw from the agreement when they deem it in the interest of their citizens. Developing countries and countries in transitions which have not been a party to the negotiations must not be pressurised to join the MAI.

CONCLUSION

The current MAI text is inconsistent with international agreements signed by OECD countries, with existing OECD policies, and with national laws to promote sustainable development. It also fails to take into account important work carried out by investment experts and official bodies such as the UNCTAD "development friendliness" criteria for investment agreements (4) and other work on investor responsibility.

If the OECD policy statements are to have any meaning, the above provisions must be fully integrated in the MAI with the same legal force as those on economic liberalisation.

Given our grave concerns about the MAI and the unrealistically short time frame within which the MAI is being concluded, we look to the OECD and its member governments to fundamentally reconsider both the process and substance of the draft agreement. We call on the OECD to make a specific and detailed written response to our concerns. We also call on the OECD to avoid talking publicly about its consultations with NGOs without also talking about the serious concerns raised at those consultations.

Finally, we will continue our opposition to the MAI unless these demands are met in full.

Notes:

(1) OECD Ministerial Communique May 1997

(2) OECD Code of Conduct for Multinational Enterprises, Paris 1992

(3) "Shaping the 21st Century: The Contribution of Development

Cooperation", OECD 1997. (4) UNCTAD, World Investment Report 1997;

UNCTAD Expert Meeting," Development Friendliness Criteria for

Investment Frameworks", 1997.

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From: Andrea Durbin <[email protected]>

In the next few weeks, the political representatives for the OECD countries will be meeting (the week of February 16th) to decide whether to:

a) proceed with the negotiations for the MAI or

b) to scrap the agreement altogether. Groups around the world are gearing up to increase the pressure nationally and internationally that the MAI should be dropped.

Below is a joint NGO statement that was released in Paris during the NGO consultation meeting with the OECD last October. We are asking groups to endorse this statement so that we can re-release it internationally with more signatures the week of February 9th.

If your organization can endorse this statement, please send me your ORGANIZATION NAME AND COUNTRY by Friday, February 6th.

Also, please circulate this message broadly to other networks you work with.

Thanks in advance for your help. Keep up the fight against the MAI. Its defeat could be the next blow to the globalization agenda!

Regards, Andrea Durbin, Friends of the Earth, US

List of 65 Non-governmental organisations supporting this statement

not included with this message.

Many of you saw this message when it first came out in October.

It is relevant now because your government must decide this week

whether or not to continue negotiations in Paris on Feb 9, 1998

Bob Olsen Toronto [email protected] (:-)

Draft Manifesto of the Peoples' Global Action against "Free" Trade and the WTO

http://www.agp.org./agp/indexen.html

(To be discussed and amended at the conference in February).

Capitalism inevitably matures into imperialism. This has been the cause of the two world wars. Capitalism must globalise itself through political and economic machinations and in the process brings out the fatal flaws inherent in it. In its current sense "Globalisation" means further rearranging the international economic order to avert the crisis of capitalism. It means the further dismantling of barriers to the free movement of capital to seek maximum profits even as the great industrial powers exert all efforts to protect their own saturated markets. The consequences to the peoples of the North and the South are disastrous; falling wages, cut in social services, lack of job security, displacement of peasants, etc. In short, the dominance of international capital on the economies of both the North and the South is tightened further closing the avenue to a development of self-reliant economies.

The newest and perhaps the most important phenomenon in this globalisation process is the emergence of trade agreements as key instruments of economic liberalisation. The World Trade Organisation, which is the organisation of the multilateral trading system has in fact become the main vehicle of choice of transnational capital for organising and enforcing global economic governance. At the regional level, trade agreements are also proliferating. NAFTA is a prototype of a regional legally-binding agreement involving North and South countries and its model may be extended to South America; APEC is another model with both North and South countries, the European Union is of course the main example of a legally-binding regional agreement among developed countries. Regional trade agreements among developing countries such as ASEAN, SADC and MERCOSUR have also emerged. However, the WTO is by far the most important institution for evolving and implementing trade agreements. The Uruguay Round vastly expanded the scope of the multilateral trade system so that it no longer deals only with the conduct of the trade in manufactures. Its scope now also covers trade in agriculture; trade and investment in services; and beyond trade issues into intellectual property rights and investment measures. Moreover, the WTO agreements have the most significant implications also for non-economic matters like the services-agreement and the specific agreements on communications and information technology which will have far-reaching effects on the culture of countries around the world.

These vastly increased scope of "trade agreements" through the Uruguay Round and now beyond it to the current negotiations in the WTO has tremendous significance for the shaping of national economic and social policies, for the scope of development options, concerns over equity and marginalisation, and national sovereignty. As though this was not enough a "new issue" is being promoted by the Northern countries which is termed as the Multilateral Agreement on Investments.

The objective is to establish an international agreement that widens the rights of foreign investors far beyond the current position in most countries, and severely curtail the right and powers of governments to regulate the entry, establishment and operations of foreign companies and investors. This initiative is currently also the most important development in attempts to extend the scope of globalisation and liberalisation. Such a push would abolish the power and the legitimate sovereign right of states and peoples to determine their own economic and social policies. This is a precious right which is especially vital for developing countries to protect their domestic sectors comprising local firms, local farms and the public sector which have been weakened through colonialism and which still require a longer period of capacity building. To further impair the domestic production _ capacity of Southern countries, the Northern corporate powers are insisting on the reduction also of the powers of states to quantitatively restrict the import of industrially produced goods.

The total impact of all these trade arrangements would result in the marginalisation of traditional producers in all the developing countries and the creation of markets catering to their elite-few, which, in turn would result in wide-spread poverty, hunger and all the possible consequences like child labour, bonded labour, prostitution and other social strifes, ending possibly in the extermination of millions of people around the developing world. The effects of trade liberalisation are not restricted to the South. Driven by the lure of cheap labour, the appeal of weak or non-existent labour and environmental regulation, the aversion to taxes and the lust for profit, the Northern corporate powers are making use of the increased mobility of goods and services. They are increasingly shifting their capital and activity to developing countries at the cost of the employment of their own nationals, which is already in historic lows due to "rationalisation" technologies. The effects of this process in the North are multiple and deeply interlinked: deconstruction of social services, disappearance of the bargaining power of workers and complete subordination of policy-makers to the will of industrialists. The globalisation of misery also includes the industrialised countries. In spite of sporadic protests against these developments by affected populations and also by enlightened citizens' groups, corporate powers do not show signs of relenting. This trend, it appears, cannot be modified, as even the "democratically" elected governments of not only the Southern countries but also of most of the Northern countries have been implementing these policies even without a debate with either their own peoples or peoples' representatives.

The only alternative left for the people is to just destroy this trend in trade agreements.

Though awareness and also opposition to these dastardly developments by various affected sectors are quite visible around the world, the need for a co-ordination of these protests towards a concerted action to overthrow this new world disorder has become very urgent. Only a global alliance of peoples' movements, which can implement action-oriented alternatives, can defeat this emerging globalised monster. If impoverishment of populations is the agenda of this neo- liberalism, empowerment of the peoples should become the agenda of this global alliance of peoples' actions. Peoples' control and power over both production and consumption has to be restored, and capitalism's mischief on nature has to be stopped. The revival of traditional knowledge systems and traditional technologies, and the strengthening of traditional local market systems by developing producer-consumer linkages and co-operatives (and developing similar linkages internationally), are the only logical alternatives to the domination of people and nature by transnational capital. In the context of governments all over the world acting as the creatures and tools of capitalist powers, the only alternative left for the people is to restore for themselves a life with direct democracy. Direct democratic action is hence the only possible way to stop the mischief of capitalism. Democratic action carries with it the essence of non-violent civil disobedience to the unjust system. It also has the essential element of immediacy. Breaking the unjust system through direct action and strengthening peoples' power is the manifesto of this new global alliance of peoples' movements. Civil disobedience and constructive action must become the hallmarks of this peoples' alliance. This is the call of the Peoples' Global Action against "Free" Trade and the WTO.

------------------------------------------------------- comments: [email protected]

Davos Conference Challenged by 20 Million People
Global Outrage against "The Globalisers of Misery"

Oviedo, Spain, 29 January 1998 - Today the 1,000 foremost corporations of the world, associated in the World Economic Forum, start their Annual Meeting in Davos, Switzerland, with the stated objective of setting the "Priorities for the 21st Century".

At the same time, 192 organisations from 54 countries, with an aggregate membership of 20 million, released the Declaration against the Globalisers of Misery, a statement that denounces the Davos meeting and "the accelerating centralisation of political and economic power caused by globalisation, and its gradual shift to unaccountable and undemocratic institutions, such as the World Trade Organisation (WTO)" (1)

The statement, issued by academics, authors, journalists and a broad coalition of organisations (including peasant movements, trade unions, indigenous peoples, human rights activists, environment and development NGOs and church-based groups), reflects the growing opposition to economic globalisation, "which only benefits multinational business elites, while increasing numbers of people are going hungry, unable to afford basic health care and education, and forced to cope with environmental destruction."

The statement emphasises the "leading role [that the World Economic Forum] played in the economic globalisation process", preparing the ground for the launching of the Uruguay Round of trade negotiations and the liberalisation of financial services.(2)

This denunciation of the Annual Meeting of the World Economic Forum is the first activity of the Peoples' Global Action against "Free" Trade and the World Trade Organisation (PGA), a new instrument for coordination created by grassroots movements from all continents to enhance their work against corporate rule. The PGA will hold its first worldwide conference in Geneva on 23-25 February, convened by some of the foremost peoples' movements of the world, like the Zapatista Front for National Liberation, the Movement for the Survival of the Ogoni People, the Sandinista Workers' Union, the Peasant Movement of the Philippines, the Indigenous Women's Network and the Karnataka State Peasant Movement, among others. (3)

The collection of signatures for the statement will continue until the evening of the 2nd of February. In the same period, protest actions against the World Economic Forum will take place in all continents, ranging from a demonstration in South Korea to street theatre in Mexico.

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(1) The complete declaration and the list of signatories can be retrieved from the PGA web page at http://www.agp.org. For information about the statement and the actions, please e-mail [email protected] or fax +34-8-524.11.21

(2) All direct quotations and factual information regarding the World Economic Forum have been taken from the Forum's web page http://www.weforum.org

(3) For more information about Peoples' Global Action Against "Free" Trade and the World Trade Organisation (PGA) and its first worldwide conference please visit the web page (http://www.agp.org) or e-mail [email protected]