|Debris at Bento Rodrigues, Minas Gerais, after the dam collapse. Photo by Ricardo Moraes/Reuters via The Guardian (which along with a number of sources spells "Rodrigues" without its second r).|
Erik Loomis reports, and there's more information and pictures at greenpeace, on a dam collapse in the state of Minas Gerais, Brazil, on November 5, releasing millions of cubic feet of mining waste, mud poisoned with arsenic, lead, chromium, and other heavy metals—more than "25,000 Olympic swimming pools"—into the mining community of Mariana, where it has killed at least 17 people and displaced hundreds more, and that's just the beginning:
The mud surged through rural communities and into the Rio Doce, the major river in southeast Brazil. Since November 5th, it has been slowly working its way downstream — contaminating the drinking water of hundreds of thousands of people and turning protected forest and habitat into a desert of mud. The tragedy will continue to spread over 500 kilometers as contaminants from the sludge make their way towards the Atlantic coast, eventually endangering the Abrolhos National Marine Park.Loomis notes,
Brazil has issued a preliminary fine of $66 million and that will no doubt be higher in the end. But Brazil has also gone straight ahead with its modernization program that includes cutting down the Amazon for cattle ranchers and allowing mining companies to do basically whatever they want to. The government might act in a time of crisis like this, but it’s opened itself to resource extraction as its path to modernization, whether the government is right or left... It would be nice if the voters held [president Dilma] Rousseff accountable, but given the power of the mining companies, it’s unlikely that there are going to be any successful anti-mining political movements.And it suddenly occurred to me that in a better world there might be something that could be done in a case like this.
You know those environmentally responsible investment firms, like the Boston nonprofit Green Century Funds, whose M.O. includes buying up shares in polluting firms and then suing their asses for defaulting on their fiduciary responsibilities? A group like that could acquire an interest in sustainable forestry in Brazil, which offers a lot of opportunities on those lines, and then smack the Brazilian government with a lawsuit over its failure to enforce its own environmental laws.
Something like the way the city of Providence, RI and the Gates Foundation are both suing Brazil over corruption at the state oil company Petrobras, which has led to a tumble in values in their investment portfolios. Only their cases are facilitated by the fact that Petrobras trades on the New York Stock Exchange and they can file the suit in New York's Southern District. How you file a suit against the government itself, in a Brazilian court, I don't know.
What I do know, sadly, is that you can't bring a case against Brazil in the International Investment Court, because it doesn't exist (there's some hope that it will some day), and you can't take it to an arbitration panel through the Investor-State Dispute Resolution process, because Brazil refuses, as a matter of national policy whether the government is right or left, to join any trade agreement with an ISDS clause.
But if the Trans-Pacific Partnership agreement comes into effect, you would be able to sue Chile, or Peru, or more relevantly Malaysia or Vietnam or Canada or Australia over such a case. I think that's a cool idea, and I don't find any evidence that anybody has thought of doing it.
We hear a lot about the horrors of the ISDS process as it affects governments' ability to regulate the environment, whether in the future tense (the Trans-Pacific Partnership "will" allow companies to overturn countries' environmental or labor regulations, though now that we've seen the language we know it won't, see article 25.11), or in the present continuous (Australia "is being sued" by the Hong Kong affiliate of Philip Morris over its cigarette packaging laws). We never hear about it in the perfect tense ("the US has been forced to abandon its sustainable fisheries regulation under an ISDS action finding in favor of the Greedy Salmon Destruction firm of British Columbia"), not ever, and I believe there is an Occam's-razor simple explanation why we never hear about it: because it doesn't exist.
I can find cases where a government defeated an ISDS attempt to overturn their regulations.
1. An Argentine citizen, Emilio Augustin Maffezini, started a company to build a chemicals factory in Galicia, Spain, which had failed because of surging costs, and Maffezini filed an ISDS suit under the Bilateral Investment Treaty between Spain and Argentina blaming a Spanish government agency for the failure, because the higher-than-expected costs were the result of an Environmental Impact Assessment that he felt he had not been adequately warned about. The tribunal found that the Kingdom of Spain was not to blame for his losses.
2. The municipality of Vilnius, Lithuania, worked with two international companies, the Norwegian Parkerings-Compagniet AS and a Dutch company, to develop car parking facilities in the capital's Old Town neighborhood, and when the Norwegian bid was rejected the company sued over discrimination; the tribunal found that the refusal "was justified by historical and archaeological conservation and environmental protection reasons. It went on to say that refusal of one site did not deprive the investor of the possibility to propose other locations" and rejected its claims in total.
But I still haven't heard of a case where a corporation succeeded in penalizing a government for its environmental regulations through an ISDS judgment, in 30 years and hundreds of suits. It just doesn't happen, as far as I can tell. (Why do companies keep filing these suits, if they're bound to lose? To delay the implementation of regulations, I guess, and keep collecting profits in the interim; and in the hopes of bullying the governments into a settlement, just to bring the process to an end—problems a properly constituted International Investment Court could alleviate.)
And I haven't yet heard of a case where the sustainable investment community went after a government through the ISDS process either, but I don't see why it couldn't. The terms of the TPP (which supersede the less favorable terms of earlier bilateral and multilateral deals) would make it possible for concerned private groups to mount an attack on deforestation in East Malaysia or the increasing coal-fueled pollution of Australia. We keep complaining about how the US government will never do anything to force Vietnam to allow independent labor unions, without noticing that the ISDS process would allow us to do it ourselves, with help from some George Soros. We spend so much time fearing these ineluctable developments (the battle over protectionism ended decades ago, everything now is merely sorting out the settlement)—why not think about how we could use the new mechanisms, to the ends of progress?