London 17 Feb (Martin Khor) -- Representatives from 29 industrialised nations meeting in Paris at the OECD agreed Tuesday to defer a final decision on the viability of a global investors' rights pact until a ministerial level meeting in April.

The Dutch official leading the talks, Mr. Frans Engering, told the media that some very difficult questions remain and if no progress is made at the April meeting, "it is quite possible that the ministers will say further negotiations are not worthwhile." As delegations from OECD countries met this week in Paris to continue negotiations on a Multilateral Agreement on Investments (MAI), citizen groups in many of these countries staged protest actions demanding the treaty talks be suspended or scrapped altogether. 

In recent weeks, there has been an upsurge of activities from a broad coalition of consumer, environmental, development and public citizen groups in Europe, the United States, Canada and Australia, challenging the rationale and effects of the MAI in their own countries as well as on developing nations.  

This is a new and significant development, as previously the concerns about the MAI have come mainly from NGOs and governments in developing countries which believed that such a treaty would have negative effects on the firms and economies of their countries.  

Recently, however, since the full text of the draft MAI was leaked to a Canadian group, large and growing numbers of Northern NGOs have been expressing outrage at what they see as the devastating effects of the treaty on their own societies, including on national sovereignty, the environment and consumer interests.  

Concern and protests against the MAI have thus spread to the OECD countries themselves. Groups in many countries launched a series of actions in an "International Week of Action" on 7-17 February.  

"The MAI would give foreign corporations unprecedented power to directly challenge Governments' environmental, health, worker and other laws, or circumvent them entirely," said a circular letter sponsored by an international coalition of NGOs.  

"Though the treaty has been under negotiation for nearly three years, they have been conducted largely in secret and without any public transparency or participation... demands to open the MAI to public debate and ensure that the agreement protects the rights of citizens' have largely been ignored."  

In a statement addressed to the OECD, endorsed by more than 500 environmental, development, labor, consumer, church and women's organizations from 67 countries, the coalition of groups called on the OECD to suspend the negotiations for the MAI.  

Public campaigns launched by these groups have already had significant results in some countries. In Canada, where the 100,000-strong citizen group the Council of Canadians has been campaigning across the country, three provincial governments have declared that they would not recognise the MAI even if signed by the federal government.  

In the US, a lobby campaign spearheaded by Public Citizen (led by consumer advocate Ralph Nader) and environmental groups like Friends of the Earth-US, has won support from many members of the Congress who are already sceptical about new trade agreements.  

Last week, citizen groups staged an anti-MAI demonstration on the steps of Capital Building where members of Congress were presented with handcuffs symbolizing the MAI's restrictions on their lawmaking authority

The NGOs also organised "national call-in days" with phone calls from members of the public to Senators and US Negotiators urging them to reject the MAI. A letter from many national environmental organizations was also sent to the US Administration. 

In several European countries, there has been a flurry of citizen actions since the MAI's last negotiating session last October.  

According to a senior official of an international NGO based in Switzerland, who has been following these activities: "It appears that all hell has broken loose, in some European Union member countries, with a combination of street protests, NGO critiques, outraged parliamentarians and inter-agency fights within governments on key issues. The word "war" has even been applied to the situation in both Finland and Sweden. Things are also moving fast in Italy, Denmark, the Netherlands and the UK."  

In the Netherlands, activists on 12 February occupied the entrance of the office of the Chairman of the OECD's MAI negotiation group, Mr. Engering, at the Hague. Some 40 people from the Dutch anti-MAI action group "MAI niet gezien" ("MAI not seen/MAI not for me") went inside the Ministry of Economic Affairs to protest against the MAI and to demand the negotiations to be extended by at least a year.  

The protestors constructed a "factory" of cardboard boxes in the main hall of the building, to indicate that investments would be out of control under the MAI.  

After an hour, the activists met with Mr. Engering and negotiator for the Netherlands Marinus Sikkel. 

In the presence of several media personnel, the protestors made the point that trying to finish an agreement by the dateline of the end of April was "undemocratic and dangerous". They said that since criticisms against the MAI from civil society is growing day by day, more and more parliaments are demanding a thorough analysis of its impacts.

The activists demanded that to allow time for serious impact assessments of the MAI and for a genuine public debate to emerge, the MAI negotiations should be postponed for at least another year. They also called for a far more open and accessible negotiation procedure, with full information made available and public participation.  

Mr. Engering told the protestors that such decisions could only be taken by the governments. He also declined the request that he postpone the deadline for the treaty's conclusions.  

In London, a demonstration was organised by several NGOs on February 13 in front of the Department of Trade and Industry whilst other actions were taken by local activists in centres like Oxford, Brighton and Essex.

Director of the UK development advocacy group, World Development Movement, Barry Coates, described the MAI as "the biggest corporate takeover in the history of the world." In a campaign letter to the public, Coates said the MAI was secretly negotiated to give multinational companies more rights but fewer responsibilities. "Unscrupulous companies would be free to act unethically and would actually be able to sue governments who try to stop them," he said. 

The London Guardian has been carrying several reports and letters on the MAI in the past few days. Last Friday, a full-page article by the paper's Economics Editor gave a critical analysis of the treaty, to which the UK Minister of Trade and Industry, Lord Clinton-Davis replied, defending the MAI.  

On Tuesday, a letter by leaders of the World Development Movement, Friends of the Earth and WWF-UK responded to Lord Clinton-Davis, stating that "there is a real danger of the MAI leading to a reduction in environmental and labour standards for the sake of more foreign investment. The effects on the poorest countries are likely to be devastating."

In another letter in the Guardian, the founder of the Right Livelihood Award (popularly known as the Alternative Nobel Prize) Jakob von Uexkull, also responding to the UK Minister, said: "Transnational corporations are already more powerful than many nation states. .. To describe them as victims of discrimination needing more protection is another example of the Orwellian Newsspeak of global corporate rule.

A democracy which abdicates the right to favour its citizens over foreign corporations will soon lose its public legitimacy, with potentially disastrous consequences." Other NGO actions include:  

• In Finland, NGOs made use of street theatre in Helsinki and in the provinces to depict how small businesspeople would lose their economic independence under the MAI, and questions were raised on the MAI in Parliament on February 12 
• In Sweden, flyers were handed out by NGO activists outside the head office of Ericsson, the Swedish telecommunications TNC, pointing out the contradiction between what the company says it wants in its environmental report, and the position of the International Chamber of Commerce of which it is a member and asking what they intend to do about it.
• In Australia, citizen groups made calls and sent letters to Members of Parliament and also launched a petition drive against the MAI.  

The joint statement sent to the OECD by a coalition of 565 citizen groups from 68 countries called on these countries to suspend negotiations on a Multilateral Agreement on Investment until full public hearings are made, and to extend the April dateline for concluding the treaty. 

The statement represents the views of over500 development, environment, human rights, labor, consumer and women's groups from around the world, with representation in over 70 countries.  

"We consider the draft MAI to be a damaging agreement which should not proceed in its current form, if at all," said the statement.  

"There is an obvious need for multilateral regulation of investments in view of the scale of social and environmental disruption created by the increasing mobility of capital. However, the intention of the MAI is not to regulate investments but to regulate governments. As such, the MAI is unacceptable."  

The MAI negotiations began in the OECD in the Spring of 1995, and was claimed to be substantially complete by the OECD.  

Such negotiations have been conducted without the benefit of participation from non-OECD countries and civil society, including non-governmental organizations representing the interests of workers, consumers, farmers or organizations concerned with the environment, development and human rights. As a result, the draft MAI is completely unbalanced, the statement added. "It elevates the rights of investors far above those of governments, local communities, citizens, workers and the environment. The MAI will severely undermine even the meagre progress made towards sustainable development since the Rio Earth Summit in 1992." 

The statement claimed that the MAI is not only flawed in the eyes of NGOs, but conflicts with international commitments already made by OECD member countries: 

• The MAI fails to incorporate any of the several relevant international agreements such as the Rio Declaration; Agenda 21; UN Guidelines for Consumer Protection (1985); the UNCTAD Set of Multilaterally Agreed Principles for the Control of Restrictive Business Practices (1981); the Beijing Declaration on Women and the HABITAT Global Plan of Action.
• The MAI fails to comply with OECD commitments to integrate economic, environmental and social policies.
• The MAI removes responsibilities on transnational enterprises which were previously agreed by the OECD under the OECD Guidelines for Multilateral Enterprises 1976.
• The exclusion of developing countries and countries in transition from the negotiations is inconsistent with OECD policy on development partnerships.

The NGOs said problems with the MAI stem both from the broad restrictions it places on national democratic action, and from its failure to include sufficient new systems of international regulation and accountability. As the MAI stands, it does not deserve to gain democratic approval in any country. All the groups signing this statement will campaign against its adoption unless changes are incorporated into the body of the MAI.  

The NGOs said that as drafted, the MAI does not respect the rights of countries - in particular countries in transition and developing countries - including their need to democratically control investment into their economies.

"The level of liberalisation contained in the MAI has already been opposed as inappropriate by many developing countries. However, non-OECD countries are under increasing pressure to join," said the statement.

Noting that OECD and non-OECD countries have differing investment and development needs, the NGOs said the potential for economic diversification and development of the developing countries and countries in transition would be severely undermined by the provisions of the MAI.  

The MAI's withdrawal provision would effectively bind nations to one particular economic development model for fifteen years; prevent future governments from revising investment policy to reflect their own assessment of the wisest economic course; and force countries to continue to abide by the agreement even if there is strong evidence that its impact has been destructive. 

The MAI contains no binding, enforceable obligations for corporate conduct concerning the environment, labour standards and anti-competitive behaviour. The MAI gives foreign investors exclusive standing under a legally binding agreement to attack legitimate regulations designed to protect the environment, safeguard public health, uphold the rights of employees, and promote fair competition. 

Further, citizens, indigenous peoples, local governments and NGOs do not have access to the dispute resolution system, and subsequently can neither hold multinational investors accountable to the communities which host them, nor comment in cases where an investor sues a government.

"The MAI will be in conflict with many existing and future international, national and sub-national, laws and regulations protecting the environment, natural resources, public health, culture, social welfare and employment laws; will cause many to be repealed; and will deter the adoption of new legislation, or the strengthening of existing ones," said the statement. 

It added that the MAI is explicitly designed to make it easier for investors to move capital, including production facilities, from one country to another; despite evidence that increased capital mobility disproportionately benefits multinational corporations at the expense of most of the world's peoples. 

With regard to substantive issues, the NGOs jointly called on the OECD and the national governments to:

• Undertake an independent and comprehensive assessment of the social, environmental, and development impact of the MAI with full public participation. The negotiations should be suspended during this assessment.
• Require multinational investors to observe binding agreements incorporating environment, labour, health, safety and human rights standards to ensure that they do not use the MAI to exploit weak regulatory regimes. Ensure that an enforceable agreement on investor responsibilities takes precedence over any agreement on investor rights.
• Eliminate the investor-state dispute resolution mechanism and put into place democratic and transparent mechanisms which ensure that civil society, including local and indigenous peoples, gain new powers to hold investors to account.
• While the NGOs do not object to the rights of investors to be compensated for expropriation by a nation state, there are adequate principles of national law and jurisprudence to protect investors in circumstances such as these.

The current MAI exceeds these well accepted concepts of direct expropriation, and ventures into areas undermining national sovereignty. OECD members should thus eliminate the MAI's expropriation provision so that investors are not granted an absolute right to compensation for expropriation. Governments must ensure that they do not have to pay for the right to set environmental, labour, health and safety standards even if compliance with such regulations imposes significant financial obligations on investors. 

With regard to the process of the MAI negotiations, the NGOs made the following demands: 

• Suspend the MAI negotiations and extend the 1998 deadline to allow sufficient time for meaningful public input and participation in all countries.
• Increase transparency in the negotiations by publicly releasing the draft texts and individual reservations and by scheduling a series of on going public meetings and hearings in both member and non member countries, open to the media, parliamentarians and the general public.  
• Broaden the active participation of government departments in the official negotiations beyond state, commerce and finance to a broader range of government agencies, ministries and parliamentary committees.  
• Renegotiate the terms of withdrawal to enable countries to more easily and rapidly withdraw from the agreement when they deem it in the interest of their citizens. Developing countries and countries in transitions which have not been a party to the negotiations must not be pressured to join the MAI. 

In a concluding section, the statement reiterated that the current MAI text is inconsistent with international agreements signed by OECD countries, with existing OECD policies, and with national laws to promote sustainable development. If the OECD policy statements are to have any meaning, the above provisions must be fully integrated in the MAI with the same legal force as those on economic liberalisation.  

"Given our grave concerns about the MAI and the unrealistically short time frame within which the MAI is being concluded, we look to the OECD and its member governments to fundamentally reconsider both the process and substance of the draft agreement.  

"We call on the OECD to make a specific and detailed written response to our concerns. We also call on the OECD to avoid talking publicly about its consultations with NGOs without also talking about the serious concerns raised at those consultations.  

"Finally, we will continue our opposition to the MAI unless these demands are met in full."