Submission to Australian Parliamentary Joint Standing Committee on Treaties On the Trans Pacific Partnership Agreement
APWLD concludes that the TPP will have serious and negative impacts on women’s human rights, development justice, the capacity to address climate change and build a more just and sustainable global economic, political and environmental future. Consequently we recommend that:
- the Australian Parliament withdraw from the Trans Pacific Partnership Agreement (TPP) and refrain from enacting enabling legislation
- a full, ex-ante, human rights and gender audit be undertaken by an independent body or the National Human Rights Commission, before the enabling legislation is tabled in parliament,
- the extra territorial obligations of Australia to respect, protect and fulfill their human rights obligations and obligation to act in solidarity form part of the review process,
- the review process gives particular attention to the deleterious impact the TPP will have on women’s human rights and includes those concerns in the committee’s deliberations.
The Trans Pacific Partnership Agreement (TPP) will have broad ranging implications for the citizens of signatory countries as well as the global environmental, economic and political order. We anticipate most submissions to this enquiry will focus on the direct impact on Australia as a result of signing the TPP. This submission draws the committees attention to the international obligations Australia has to support an equitable and sustainable global economic order and to ensure that it’s foreign, trade and investment policies respect, protect and fulfill human rights of all peoples. In this respect we remind the committee that Australia, as a UN member state, must ensure its extra-territorial obligations are respected when negotiating and implementing preferential trade agreements. In 2015, ten UN Human Rights Council mandate-holders voiced their concern over the impact of trade and investment agreements on human rights, jointly as well as in separate reports.2 The collective statement warned that the TPP and other trade agreements “are likely to have a number of retrogressive effects on the protection and promotion of human rights, including by lowering the threshold of health protection, food safety, and labour standards, by catering to the business interests of pharmaceutical monopolies and extending intellectual property protection.”3 One of the UN experts, whose mandate is to assess the human rights impact of the international order has said, “Far from contributing to human rights and development, ISDS has compromised the State’s regulatory functions and resulted in growing inequality among States and within them,” the expert stated.4 The collective statements of independent UN experts should be sufficient to alert the committee that a prima facie case that the TPP will cause and deepen human rights violations exists. Additionally, the experience of similar trade agreements illustrate the potential harm the agreement will cause.
The TPP will undermine women’s right to Decent Work in several ways. We contend that the TPP has negative impacts on women in signatory countries as well as in other countries competing in export industries.
Race to the Bottom – Preferential trade agreements are designed to facilitate greater market competition and the freer flow of global capital, enabling increased access to resources and cheap labour in signatory countries. The ‘comparative advantage’ of developing countries is the capacity to provide cheap, un-unionised and unregulated labour. Consequently, preferential trade agreements have the effect of pushing down wages in an attempt to compete in a race to the bottom for cheaper exports across the region, not just in signatory countries. If other countries wish to continue to attract investment they need to reduce the costs. Export industries often have little cost margin and consequently wages, as well as conditions are sacrificed. The North American Free Trade Agreement (NAFTA), provides a good example of the likely consequences of preferential trade agreements that include countries at different stages of development. While labour productivity grew after signing the agreement and exports increased, wage compensation in Mexico declined by 20% between 1994 and 2011.5 As women comprise an increasing percentage of workers in export industries, they are most likely to experience the downward pressure on wages, conditions and rights. The Mexican example was also a result of an increased number of subsistence farmers being pushed off their land which was privatized and formed large agro-businesses, offering low paid, primarily male, employment.
ISDS threatens wage increases – The investor state dispute regime has also been utilized to challenge increases in wages and conditions (Veolia v Egypt) and UN experts have noted that such cases have a ‘chilling effect’ on governments. “We believe the problem has been aggravated by the “chilling effect” that intrusive ISDS awards have had, when States have been penalized for adopting regulations, for example to protect the environment, food security, access to generic and essential medicines … or raising the minimum wage”.6 As women make up the largest percentage of minimum and low paid workers, they depend more on state wage setting mechanisms.
ISDS threatens affirmative action – Italian investors brought an action against South Africa arguing that South Africa’s Black Economic Empowerment (BEE) Policy (an affirmative action policy) would expropriate investor profits. South Africa has since sought to extinguish trade agreements that contain ISDS in order to pursue its affirmative action policies. Similar arguments could be brought against countries who meet their CEDAW obligations to take ‘temporary special measures’to remedy historic economic disadvantage experienced by women.
Diminishing Public Sector Employment – The TPP includes a chapter on state owned enterprises, requiring them to act as market enterprises. One consequence of this is that wages will have to fall to match competitors and the job protection and pension entitlements for workers in those industries may be at risk. While the TPP incorporates a labour chapter, referencing ILO core standards, the US has incorporated references to Labour Rights and ILO conventions in every free trade agreement for the past 25 years. To date there have been no trade sanctions against any country as a result of a labour complaint. The TPP doesn’t provide workers with the same dispute settlement benefits as multi-national corporations. Complaints go to a committee and, experience shows, adverse findings simply result in recommendations, most of which have already been provided by the ILO. For example, the US is a party to a free trade agreement with Guatemala – recognized as the most deadly place for trade unionists in the world and a repeated violator of labour rights. The US’s own assessment reports noted that labour rights had declined in the country after the agreement was signed. Despite years of evidence and complaints, the US only filed a matter in late 2014 when opposition from unions to the TPP was mounting. 7
The rare opportunities for women to be employed in Decent Work diminish when neo-liberal policies are pursued. Public sector employment is reduced and local, micro, women led industries are often forced to shut down when faced with competition from multi-nationals who can afford to undercut local businesses and gain advantages in access to capital, information, influence, marketing and trade rules. Trade facilitation rules often disadvantage women cross border traders who are unable to meet the regulatory requirements.
ACCESS TO PUBLIC SERVICES
The TPP is likely to impact on the availability and quality of public services in several ways. First, governments may have reduced revenue from tariffs and taxes. Second, the TPP encourages private sector competition and participation in the provision of public services through several chapters. Third, the Investor State Dispute Settlement provision discourages governments from extricating themselves from public private partnerships that are failing to deliver.
Water – Public private partnerships have been notoriously unsuccessful in the context of water provision, which has led to more than 235 cities and communities in 37 countries ‘re-municipalising’ their water services in the last fifteen years.8 Remunicipalisation has been prompted by tariff increases that put water beyond the reach of poorer communities; environmental hazards; a failure to invest in infrastructure; and a recognition that the public sector can provide equally or more efficient water services at lower prices.9
Yet ISDS acts as a significant barrier to cancelling contracts despite failures. In the case of Suez & Vivendi v Argentina the tribunal recognized that the access to water is a human right, yet concluded that human rights must be ‘counter-balanced’ against investor rights. 10
“It can be said that a petroleum company that is polluting the waters and causing major environmental damage cannot claim that its profits are guaranteed and that a State ordinance to prevent environmental damage should be repealed. Such legalistic nonsense borders on the criminal, and is invalidated by Article 103 of the Charter of the United Nations.”
The fast-track authority Obama gained from the Congress included a clause preventing the US from signing agreements with countries classed as tier 3 in the Trafficking in Persons report. Malaysia is a tier 3 country, and last year’s mass graves of Rohingya and Bangladeshi migrants found in Malaysia revealed the deep horrors of trafficking in the country. Slavery camps appear to have been operating for years with the knowledge of at least some government officials and police. But the rights of enslaved peoples are secondary to the needs of capital as Malaysia was simply elevated to tier 2 without having to do anything for the rights of migrants and trafficked persons. Women and children are more vulnerable to trafficking than men because they are disproportionately impacted by some of the root causes of trafficking, including poverty, lack of education, lack of equal employment opportunities, discrimination, violence, and conflict. The ILO conservatively estimates that 15.8 million women are subjected to forced labor and trafficking globally11 . Malaysia’s upgrade in the name of the TPP is a blatant act of putting economic interests over human rights.
Access to Medicines – The TPP will make life-saving drugs more expensive and less able to be widely produced in developing countries, directly contravening the TRIPS agreement which recognizes the need for generic drugs to be available in developing countries. An Australian study found that the TPP will reduce the percentage of HIV-positive Vietnamese with access to anti-retrovirals to plummet from 68% to 30%. Women are likely to be the most impacted by the increase in the cost of life saving medicines. In Malaysia, study already shows that the TPP could push the price of breast cancer Herceptin from USD 2,600 to USD 44,000 making it completely unaffordable for the large majority of Malaysians. A chorus of health experts and organizations has denounced the TPP and its blow to public health, particularly in developing countries.12
Nutrition – The Special Rapporteur on the Right to Health notes that free trade agreements can curtail public efforts to improve nutrition, requiring reductions in tariffs, sales restrictions and packaging rules “allowing freer import and export of unhealthy food products” 13 . He notes that “free trade agreements have been directly linked to an increased consumption of soft drinks”. 14 These impacts, he argues in his report are gendered as women still bear a disproportionate share of household duties, particularly in preparing meals leading to the increased consumption of highly-processed convenience foods, as women have less time.15
ACCESS TO LAND
Once land is opened to multi-national agro-business millions of people could be pushed off their land and into poverty. It’s estimated that, 2 million Mexican farmers lost their land and livelihoods, after NAFTA allowed multi-national agro-business to take over farming land and Mexico was swamped with crops made cheap by enormous US subsidies.
FISCAL SPACE FOR DEVELOPMENT
Women rely more heavily than men on public services and safety nets. Reduced public expenditure impacts most heavily on the poor and particularly poorer women. The TPP will have a negative impact on the revenue of developing countries in numerous ways. The first is the reduction in tariffs. Tarrifs can make up an important percentage of income, particularly in economies with undeveloped tax systems and where tax incentives are used to drive foreign direct investment. The second is the enormous costs associated with an ISDS case. To date the majority of cases heard by ISDS tribunals have been against developing countries and lodged by multi-national corporations from developed countries. Awards have amounted to hundreds of millions, even billions of US dollars. For example $2.4 billion was awarded against Ecuador in a case brought against it by an oil company ordered to clean up its toxic waste. The award represents more than 6% of the small nation’s national budget – more than its health budget. The Philippines is reported to have spent USD 58 million to defend 2 cases, money that could have paid the salaries of 12,500 teachers for one year or vaccinated 3.8 million children against diseases such as TB, diphtheria, tetanus and polio or build 2 new airports. 16
CAPACITY FOR PRO-POOR POLICY
“Experience demonstrates that the regulatory function of many States and their ability to legislate in the public interest have been put at risk.” 17
The TPP makes it virtually impossible for any future government to imagine a different, fairer economic system. The TPP is being signed by several governments where the absence of democratic governance is evident. Should democracy prevail and governments elected who seek to advance the public interest, they will find it impossible to implement the legal and economic order of their choice. Argentina, Bolivia, Venezuela, El Salvador, Ecuador stand as cautionary tales of what happens to governments who attempt to put public interest ahead of corporate interests. Together they represent the most common targets of ISDS suits.
El Salvador faces a $300-million case from a mining company because El Salvadorans won their battle to stop toxic gold mining operations. Bolivia paid out $31 million after it cancelled a privatized water contract that resulted in dramatic increases in the cost of water. Ecuador has been ordered a massive $2.4 billion to the mining company Occidental. This represents more than 6% of the small nation’s budget essential for health, education and public services. Argentina has faced 53 claims for $80 billion dollars after it introduced regulations to address a financial crisis that was pushing many people into poverty.
The TPP will cement a global economic system that has resulted in 62 people holding as much of the world’s wealth as half the world’s population – more than 3.5 billion people; that has pushed the world to the brink of catastrophic, irreversible climate change, that has given multi-national corporations unchecked political and economic power; that has caused millions of people to be forcible removed from their lands. Pre-existing gender discrimination and norms mean that these all impact most negatively on women and, in many cases, deepen gender inequalities.
Member states of the UN have recognised, through Agenda2030 and the Paris Agreement, that urgent global action must be taken to address the intersecting crises of catastrophic climate change, deepening, obscene levels of inequality between and within countries, perpetual conflict and lasting gender discrimination. The TPP will serve not only as an egregious contradiction to global commitments recently made by Australia but will serve to prevent those very commitments from being implemented.
It is very clear to APWLD and women’s rights organisations across the Asia Pacific region that the Australian Government cannot continue to claim to be a strong supporter of women’s human rights whilst advocating for the TPP and similar preferential trade and investment agreements that serve to deepen poverty, inequalities and climate change.
1 The Asia Pacific Forum on Women, Law and Development (APWLD) is the region’s leading network of feminist organisations and women. Our 180 members represent groups of diverse women from 25 countries in the region. We have consultative status with the Economic and Social Council of the United Nations. Our active membership provides the strength and expertise that drives and executes our work: to promote women’s human rights enshrined in international human rights instruments, and to empower women and their movements in Asia Pacific to claim equality, justice, peace and sustainable and inclusive development.
2 See, e.g., Office of the High Commissioner for Human Rights, ‘UN experts voice concern over adverse impact of free trade and investment agreements on human rights’ (2015) available at http://www.ohchr.org/FR/NewsEvents/Pages/DisplayNews.aspx?NewsID=16031&LangID=E
4 See. e.g., Office of the High Commissioner for Human Rights, ‘International Trade: UN experts calls for abolition of Investor-State dispute settlement arbitration’ (2015) available at http://www.ohchr.org/EN/NewsEvents/Pages/DisplayNews.aspx?NewsID=16650&LangID=E
5 Harley Shaiken, The impact of international free-trade agreements on job growth and prosperity, Scholars Strategy Network, University of California, 2015.
6 http://www.ohchr.org/FR/NewsEvents/Pages/DisplayNews.aspx?NewsID=16031&LangID=E#sthash.Szp8QhJP.dp uf
12 See, e.g., Doctors Without Borders/Médecins Sans Frontières (MSF) ‘Statement by MSF on the Conclusion of TPP Negotiations in Atlanta’ (2015) available at: http://www.doctorswithoutborders.org/article/statement-msfconclusion-tpp-negotiations-atlanta and World Health Organization ‘Director-General asks think tanks to explore health challenges under the Sustainable Development Goals’ (2015) available at: http://who.int/dg/speeches/2015/sustainable-development-goals/en/
13 A/HRC/26/31 Report of the Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, April 2014.
14 Cited in report of Special Rapporteur “Manufacturing epidemics” (footnote 10), p.6.
15 UN GA ‘Report of the Special Rapporteur on the right of everyone to the enjoyment of the highest attainable standard of physical and mental health, Anand Grover’ available here: http://www.who.int/nmh/events/2014/rapporteur.pdf
16 Cecilia Olivet, The Dark Side of Investment Agreements (2011) https://www.tni.org/files/the_dark_side_of_investment_treaties-final.pdf