From Carl Pope, Chairman of the Sierra Club:
As we wait for President Obama's speech tonight on the oil catastrophe in the Gulf, it's important to understand that many of the options he has discussed -- from requiring BP to set funds aside in escrow for cleanup to asking Congress to raise the liability limit on oil companies -- are possible only because BP is a British, as opposed to a Canadian or Mexican, company. That's because under the North American Free Trade Agreement (NAFTA) the so-called "investor-protection clauses" would allow a Canadian or Mexican oil company that caused a gusher on the floor of the Gulf to appeal any change in the liability or responsibility it faces to a trade tribunal. Such a tribunal would likely overturn, for example, an after-the-fact raise in the liability limit (or in the royalties companies had to pay).
But since the U.S. does not have a free-trade agreement with Britain, BP can't hide behind these trade tribunals.
He said this in the context of arguing that the TPP should not include investor-state.
So is there anything to this? It is true, of course, that if BP was from a country that had a BIT or FTA investment chapter with the U.S., it could bring an investor-state claim. So, yes, "a Canadian or Mexican oil company that caused a gusher on the floor of the Gulf" could "appeal any change in the liability or responsibility it faces to a trade tribunal." But could it win? In particular, is it true that a tribunal would "likely overturn ... an after-the-fact raise in the liability limit (or in the royalties companies had to pay)"? That seems like wild speculation to me. I can't see how anyone could possibly state such a conclusion with any certainty. If I had to guess, based on the little bit I know of the facts here, I would say there is, at best, a very, very slim chance of success on such a claim. But I really don't know enough to come to any firm conclusions, and I can't see how the author knows enough about his theoretical legislation either.
I think this is a good example of why trade critics are often ineffective in pushing their views. There are arguments you can make against the existing investor-state rules (both the procedural and substantive aspects). But when you say things like this, the people in power tend not to take you seriously.
