Maxine McKEW introducing her guests to discuss MAI,
"Don Johnston is the secretary general for the Organisation of Economic Co-operation and Development (OECD). A lawyer by profession he is also a former Canadian government minister. He joins us tonight from Paris.
"Maud Barlow is co-author of the book "MAI and the threat to Canadian sovereignty". A senior adviser for women's issues in Pierre Trudeau's government she is an outspoken crusader for citizen's rights and she joins us from Ottawa.
"Alan Asher deputy chair of the Australian Competition and Consumer Commission and was Australia's representative on the United Nations Commission on transnationals and has spent twenty years working on economic development in developing countries and he joins us tonight from Canberra."
MAXINE McKEW “Welcome to all of you thank you for joining us. Alan Asher perhaps we could start with you. Is it really time for us to start worrying about a treaty like MAI when such
disparate individuals such as Pauline Hanson and Sir Anthony Mason are saying much the same thing one thing for example is they both dislike the secrecy surrounding the MAI.”
ALAN ASHER “Well perhaps I should say in a country where 80% of the economic activity is already managed by international corporations and in a world where bilateral investment treaties cover most of the economies of the world anyway I think the concerns they expressed are just a little too late.”
MAXINE McKEW “Are negotiations been conducted in secret?”
ALAN ASHER “Well when you say in secret its being conducted in the OECD context and it certainly is true that it is not done under the glare of cameras but it is the traditional way in which all such arrangements are negotiated. I think there is a good case for more openness as there was with those in the World Trade Organisation.”
MAXINE McKEW “Don Johnston let me get to you. How open are the negotiating processes?”
DON Johnston “Well as we just heard negotiations take place in the normal way but there have been briefings and press conferences and so on since the very beginning of this exercise the reality is that the media have paid very little attention on the MAI until recently. Then they claim that it has been held in secret. There has never been any secrecy over the agreement. There has even been a website up for over a year. And there is no reason. There never has been any need for secrecy. It is a very significant agreement but a very modest step in what I hope will become a global investment agreement in years to come but there is so much misinformation out there that if they had paid attention... they would have seen the evolution of it. They would have seen misinformation before it got some public currency.”
MAXINE McKEW “Maude Barlow I hope that you can hear us I know we had problems connecting with you earlier in Ottawa. What is your view on this. I gather that MAI is a hot issue in your country on talk back radio.”
MAUDE Barlow “Well it certainly is now and it is beginning to be an issue all over the world. We literally had to get the MAI out in a Barlow paper bag last spring and get it out to the media and get it out on the Internet through the World Wide Web.”
MAXINE McKEW “What do you mean by a Barlow paper bag?”
MAUDE Barlow “Well we have to protect our source, but we literally got it received it in Canada from a public official who thought it was just dreadful and that people had to know about it. We had hearing about this thing in the World Trade Organisation it was called the MIA. We came home and asked our government about it and they told us we are dreaming in technicolour. There is no such thing. So we had to get a hardcopy of the agreement before we could get our government to agree that it existed. So this notion that it hasn’t been done in secret is a lot of nonsense. In fact I would go so far as to say that most of the politicians all over the world have not read it and have not grasped it until the last few months. Certainly our governments have not gone out of their way to inform their people about the MAI and allow them to debate it.”
MAXINE McKEW “Don Johnston?”
DON Johnston “Well I just don’t think MD wants to pay attention. In 1995 it was commissioned at the time there was a communique. It is a very significant treaty what is there in it that anybody would want to keep secret? It seems a very modest agreement for the Global Investment Regime and I am not sure what the concerns really are.”
MAXINE McKEW “MAUDE Barlow why is it arousing such passions say in your country.”
MAUDE Barlow “Well it is not just in our country. We are working with people all over the world who are concerned about the MAI. First of all it would dramatically limit the ability of all levels of government Federal, State or Municipal levels to control investment coming in and going out of their country. It would place dramatic limits on requirements that you can place on foreign investment to create jobs, protect communities. There are very strict conditions on privatisation you would have to immediately open up privatisation to the corporations from other countries. It has clauses called stand still and roll back which means that anything you say you are going to protect is only a temporary protection. It puts our culture at risk, health and education I guess the thing that most concerns us is that it gives the corporations of the world and remember this is supposed to go to the World Trade Organisation . We are conceivably talking about most of the corporations... it gives these transnational companies the right to sue governments if they bring in any law or enforce a law that they haven’t properly enforced that will cost those corporation lost future profit.”
MAXINE McKEW “Can I just ask a more general question because I will come back to some of those details. Is it not possible that MAI is becoming a convenient whipping boy for those who may really want to push the reverse button on the whole process of globalisation. You mention privatisation but many national governments are pursuing that policy anyway.”
MAUDE Barlow “There is no question that in all of our countries there is a real debate going on about how far we should go in economic globalisation an I think MAI has become a bit of a catchment issue for the whole notion of unlimited and unregulated financial transactions, foreign investment and so on but I think the MAI is such an egregious document so all encompassing and so frankly dangerous to democracy that people who on reading it become are extraordinarily distressed about it. I have been on call in shows with people who are supposed to be representing the other side and when I pull out the document and I have read it people have said “Well that’s outrageous, that’s not acceptable” so I think what you are seeing here is a debate about the larger issue.”
MAXINE McKEW “Okay DON Johnston “. An egregious document?”
DON Johnston “Can I. Has anybody else got a chance to get in this debate apart from Madam Barlow.”
MAXINE McKEW “Please go ahead.”
DON Johnston “Well the fact of the matter is that this agreement simply stand on three pillars. There will be a liberalised investment, investment will be protected and there will be a dispute mechanism. There are 1630 at the moment - bilateral investment agreements around the system. But this is supposed to provide transparency - this will provide exactly the sort of model that Maude Barlow seems to be concerned about. The reality is if you wish to discriminate against foreign investors you would not like this agreement. But this takes nothing away from government, governments can apply any laws they like and there is no basic compensation to a foreign company or foreign investor provided they apply the same laws to their domestic investors and that’s the reason of course that Canada is very interested in this. Canada is a very big supporter of foreign capital as is Australia in the 1990s. And those investors, those governments, those workers in those countries supporting the protection of investment will enjoy the benefits of this kind of protection.”
MAXINE McKEW “Let me ask you about those countries certainly in our region who are basically importers of capital. We have some very sick economies in our region at the moment Indonesia, Malaysia, Korea. The problem there has been that they have received a totally uninhibited flow of capital. One would have to say why do we even need an MAI?”
DON Johnston “In those countries there have been uninhibited flows because investors have seen opportunities some have paid a price for that but the reality is that this agreement only exists between the members of the OECD. Twenty nine member countries plus five others which are associated with the source of the agreement because they see the benefits coming from it. Argentina, Brazil, Chile, Slovakia and Hong Kong. These are the countries involved, although ultimately I would hope there would be a universal code for investments of the kind set out in the multilateral agreement on investment.”
MAXINE McKEW “You are leaving out the other players.. the developing countries..”
DON Johnston (shrugs)
MAXINE McKEW “MAUDE Barlow you want to come in there?”
MAUDE Barlow “It is really important to remember two things. This agreement was intentionally intended for the World Trade Organisation. Its just when they had their first ministerial meeting in December 1996. The developing countries were very frightened by what they saw they called it a form of neo-Colonialism and set up a working group, and that’s when they sent it back...
DON Johnston (interrupting....) “Most of the other countries of the world want it to go back to the World Trade Organisation.”
MAXINE McKEW “Sorry I will have to give DON Johnston the right of reply there.”
DON Johnston “I mean I just don’t like such false information being put out there. This was commissioned in 1995 by the OECD ministerial because the countries wanted a high standard agreement. They hoped that it would be done in a reasonable length of time and the OECD was the logical place to do it because we are talking about the post-industrialised countries. It has absolutely nothing to do with the December 1996 meeting in Singapore this was already a year and a half old at this point.....”
MAXINE McKEW “(interrupting) ALAN ASHER can I bring you in at this point.
ALAN ASHER “Much older than that. The roots of such an agreement could be found in the UN Code of Conduct on transnational corporations where that had a set of conditions for transnational corporations but nothing on rights and that in the last few years, in the early 90s, a set of rights or treatment issues were developed there too. That whole process broke down in the early 90s and the next manifestation was the NAFTA agreement which had very similar elements to the MAI, but anyway I think that is all beside the point for the past 50 years we have had various investment regimes around the world. Most countries are very hungry for direct foreign investment. It really comes down to whether one wants to look at the elements of balance between the rights and obligations of investing companies in nations and I really think that that is where the discussion should be.”
MAXINE McKEW “So Alan you do consider a more comprehensive MAI than the one that is on the table. What does it say about obligations?”
ALAN ASHER “I think the current agreement is a sound document so long as there are some balancing obligations, obligations on environmental issues, labour issues, privacy, competition issues and if they were put in there and there are existing UN agreements that previously exist and if they could be collected the heat would pretty quickly disappear from the debate.”
MAXINE McKEW “Are the OECD negotiators open to this notion?”
DON Johnston “We do not have a final agreement. The issue of labour, the issue of environment are still on the table. There are many exceptions, Australia has exceptions to the agreement.”
MAXINE McKEW “Yes, but what about Alan’s comment that this is an unbalanced document without meaningful obligations?”
DON Johnston “People keep saying “Why are there no obligations on the investors.” The corporations by investing accept all the obligations that are imposed and the government maintains the sovereignty in that regard.. obligations there are obligations and in addition to that the 1976 code for multinational enterprises of the OECD will also be annexed to this agreement. Good citizenship requirements for corporation in the environment, labour and behavioural aspects which are applicable to corporate performance.”
MAXINE McKEW “Okay Alan how’s that sounding to you?”
ALAN ASHER “That’s a sensible way to go and as long as they have access to the same mechanisms as investing companies and countries, I think consumer groups, environmental groups, human rights groups, local companies will not be so opposed to it - it has been a problem.”
MAXINE McKEW “MAUDE Barlow Would you be happier if we saw a broader document.”
MAUDE Barlow “No I think what you will find is that it will be tremendously changed that it will be of no service to the business community any more and we still haven’t discussed the central issue that this document gives foreign investors more rights than domestic investors. It includes in the definition of investment any area where their is a mix of private and public spending such as private health care or education it includes natural resources which means you will have a very difficult time looking after your natural resources. It gives foreign transnationals the right to sue before an international court not before the country’s domestic courts if that country moves to bring in any law that that company does not like. This is not something that is given to domestic investors. Don Johnston is wrong in suggesting that this is an equal situation. It gives great advantage to transnational corporations let me remind you that the top 200 companies in the world are now bigger than most nation states when you compare their budgets. If these corporations were to sue...”
“Now what your other guests are saying is that we hope transnationals will not use the MAI against countries to lower their standards. You put this up against the right of these corporations to sue and to have full redress through international courts to get financial compensation if they don’t get their way. There is no comparison....”
ALAN ASHER “(Interrupting) With respect that’s not what I said, I said there should be the same mechanisms as by the investing nations and transnationals and that is easy to do.”
MAXINE McKEW “Okay, Don Johnston can I come to you on this question on the right of transnationals to take Australia to an international court. Our government is saying that it is uncomfortable with that it is much more comfortable with a government to government action.”
DON Johnston “Well this is very common with international investment treaties such as the NAFTA agreement. The point is that any government such as Australia has that right abroad. In other words if it feels that it is being unfairly discriminated against it has that right to take the issue to an international court and to say that a domestic company cannot do that is true in that that company can’t do it in an international context. Let me add one other thing we keep on talking about the transnationals the large corporations. Our analysis is that this agreement will be of most benefit to the small enterprises that do international business. The big corporations can take care of themselves. The smaller companies which don’t have access to armies of lawyers and so on and do not understand the international treaties. So this notion that the MAI is just a treaty for multinationals is sheer nonsense.”
ALAN ASHER “Don on that point there are already thousands of treaties between investor nations and client nations. And that many of these far harsher agreements are already included in that and one outcome of MAI is to make more known and to make more known and to allow smaller countries and smaller corporations with access to that there has to be a balance on the obligation side as well.”
MAXINE McKEW “Don Johnston let me ask you what does the OECD think of Australia’s exemption list. It is almost as long as your arm with fisheries to media to real estate...”
DON Johnston “Well I am not sure of Australia’s list. Every country has a list and the OECD I direct is based on negotiations these are issues which are being debated by member countries. Undoubtedly some exemptions are part of a multilateral negotiation technique. I suppose that it is the countries are prepared to take off the table their exemptions... the sooner the better I would say..”
MAXINE McKEW “But why multiple exemptions...”
DON Johnston “Well bare in mind the MAI by its very nature remember that the multiple exemptions are called talk down agreements in other words all the investments are included except those which are affected by exclusion but even those which Australia and others might put on the table is a large area of investment that is covered by the agreement and as I say that the MAI is a model agreement which I hope will be a global investment agreement administered by the WTO.”
MAXINE McKEW “And these provisions are you concerned about these?”
ALAN ASHER “There are many practices that nations have that should be changed. That should be addressed. It is not all one way. There are so many countries whose economies are tied up with anti-consumer practices and don’t allow the forces of change, there are some real social gains to be had through liberalisation.”
MAXINE McKEW “What about the Australian media though... would you be comfortable if we saw a roll back of that over say ten or twenty years?”
ALAN ASHER “Technology and events are any way having a major impact on that sector.”
MAXINE McKEW “Well right on that note I will have to wrap up.”