FTAA Investment Chapter Confirms Worst Fears of Civil Society

QUEBEC CITY, Apr 19 (IPS) - Civil society groups here say a leaked copy of the investment chapter of the draft text of the agreement of the Free Trade Area of the Americas confirms their worst fears.

''This text is top-down, heavy-handed and retains the worst features of NAFTA's Chapter 11, '' says Maude Barlow of the Council of Canadians. ''It appears that governments have learned nothing from the NAFTA experience.''

The draft text, which has not yet been approved by the 34 governments of the proposed Free Trade Area of the Americas (FTAA), is heavily bracketed reflecting a lack of consensus on many aspects.

But, as widely expected by civil society opponents of the agreement, the investment chapter proposes to give corporations (but not citizens or NGOs) the ability to sue governments for discrimination, if they act in ways that hinder their investments.

Such a provision is also contained in the investment chapter of the North American Free Trade Agreement (NAFTA) - widely known as Chapter 11. The NAFTA provision has so far resulted in claims for more than 18 billion dollars in compensation sought by corporations against the governments of Canada, Mexico and the United States.

''Investor-state is the most pernicious element of the entire free trade edifice,'' says Toronto-based trade lawyer Steven Shrybman. ''This is a triumph of investor and corporate rights over human, labour and environmental rights.''

Provisions of NAFTA's investment chapter have been invoked on at least 15 known occasions to challenge laws and regulations designed to protect the environment, health and safety measures.

The 42-page investment chapter of the FTAA is one of nine chapters of an agreement that should come into force by 2005, and which is one of the subjects of the Third Summit of the Americas being held here Apr. 20-22. At the summit, 34 heads of states from the hemisphere are expected to endorse the negotiations.

''Despite the promises of Canadian trade minister Pierre Pettigrew not to sign onto an agreement that had NAFTA-style investor-state dispute settlement provisions, the leaked text contains the same basic architecture for investor-state suits and some proposals go much further,'' notes a civil society statement signed by participants of the alternative People's Summit which runs concurrently to the Americas summit.

A media official in Pettigrew's office said the minister would stick to his promise, but the official refused to comment further on the leaked document.

Until now, only corporate advisers to the negotiators have participated with government officials in drawing up proposals for negotiations towards creating what will become the world's biggest free trade area