Issue 64 June 1998
THE MULTILATERAL AGREEMENT on INVESTMENT
THE MULTILATERAL AGREEMENT on INVESTMENT (MAI)
The Ministerial Meeting of the Organisation for Economic Cooperation (OECD) held Paris 27-28 April 1998 ended its deliberations with a statement describing investment as "an engine of economic growth, employment, sustainable development and rising living standards in both developed and developing countries." The statement goes on to give recognition to the importance of public debate on the implications of globalisation and welcomes "the progress made since the Ministerial Meeting of May 1997", without elaborating on or specifying "remaining difficulties and concerns." These, judging by input from NGOs, local government officials and the civil society sector, are by no means inconsiderable.
The next meeting of the negotiating group will be held in October 1998 and the negotiators have been directed to continue their work "with the aim of reaching a successful and timely conclusion of the MAI and seeking broad participation in the same spirit they support the current work programme on investment in the World Trade Organisation (WTO). "
The Ministers furthermore confirm that the MAI must be consistent with the sovereign responsibility of governments to conduct domestic policies. They point to the need of the MAI to address the support for including "a strong commitment by governments not to lower environmental or labour standards in order to attract or retain an investment. "
If investment is to be viewed (see "engine": Oxford Dictionary) as "a mechanical contrivance of parts working together, esp. as a source of power", the MAI nevertheless still lacks a mechanism to prevent fast exit movements of foreign capital which, according to the 1997 Report of the United Nations Conference on Trade and Development (UNCTAD), triggered the acute financial crises that affected Mexico and more recently South East Asia. The UNCRAD Report emphasises the increasing income gaps "which appear to be reinforced by the forces of globalisation."
Economic globalisation is, of course, inevitable but how we approach it and proceed with it is of prime importance. Dr Benjamin Barber of the Walt Whitman Center for the Culture of Politics of Democracy has laid bare the crux of the problem. "Civil Society", he observes, "and the forces of globalisation are in a contest for the soul of democracy. The institutions of democracy must be rooted in civil ideals."
Since all of us are participating in and must bear our share of responsibility for the outcome of this globalising process we would be well within our rights to take exception to the lifeless, soul-less, machine-like image of the MAI given us by the OECD – the validity of which is evidently challenged by experts possessing credentials at least matching those of the negotiators of the MAI.
Ministerial assurances are generally to be welcome, but doubts with regard to this treaty are unlikely to abate unless or until changes of a basic and radical nature are made to its very structure. The reason for this should not be difficult to understand. Once this agreement becomes law, sovereign power will no longer rest with governments. The powers and rights of investors far transcend those of governments, local communities and the vast majority of citizens around the world who are not investors; neither are their rights anywhere taken into account, even though the implications of enforcement of the rules of the MAI will materially affect them. Furthermore the draft agreement still legitimizes actions by corporations or other investors which could belie any assurances given today by government ministers.
In the light of the existing situation it could be argued that any government putting its signature to the MAI would be contributing to undermining the fundamental principles of international law and the principles enshrined in the UN Charter wherein the UN member states have undertaken, on our behalf, to "reaffirm faith in fundamental human rights, in the dignity and worth of the human person, in the equal rights of men and women and of nations large and small." Although formally the MAI leaves the Charter and even domestic (e.g. environmental) law intact, enforcement of its rules could have implications undermining both.
The ongoing campaign against the MAI remains crucial. Is big business to be given, by the entry into law of this agreement, a position of enhanced dominance throughout the world? Where, then, will ultimate sovereignty eventually reside in our emerging global neighbourhood?
A.B.
Many to Many
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