President Obama’s decision to block the KeystoneXL tar sands pipeline was a major victory for the environmental movement in the United States and beyond. Now, the company behind the pipeline – TransCanada – are planning to sue the US government for putting climate action above corporate profits, to the tune of $15 billion.
The Keystone pipeline would have transported highly polluting tar sands from Alberta, Canada, to refineries on the Gulf Coast of the US and on to export markets such as Europe. Over the project’s 50-year lifespan, it was predicted to generate up to 8.4 billion metric tons of greenhouse gas emissions.
Since Obama’s veto, TransCanada has turned to the North American Free Trade Agreement (NAFTA) to sue the US administration. NAFTA grants investor privileges to corporations through the Investor-State Dispute Settlement (ISDS) mechanism, which allows firms to side-step national courts and sue governments at private ISDS tribunals for any losses they might incur from government efforts to protect the environment or human rights. They can even claim for billions in notional ‘future profits’.
The tribunals also exert a ‘chilling factor’, discouraging politicians from putting in place important protections.
The US and EU member states have already paid out billions of euros of taxpayers’ money to corporations under existing investment treaties.
But a new wave of trade agreements could make things a whole lot worse. They include the gargantuan US-European Transatlantic Trade and Investment Partnership (TTIP) currently under negotiation, and the Canadian-European Trade Agreement (CETA), which is awaiting a vote of approval from European Members of Parliament.
Campaign groups have put up a powerful resistance to the deal – drumming up 3.2 million signatures in opposition from EU citizens last year – in the hope of stopping tens of thousands more foreign corporations from aping TransCanada in years to come.