by Jeremy S Goldstein*
[Denver, CO] Last week, signatory nations released the long-awaited full text of the Trans Pacific Partnership (TPP) agreement, which is poised to reshape the way that countries comprising 40% of the world’s economy conduct business. While the white-hot media spotlight has been searing hairs off trade provisions relating to the automotive, agricultural, pharmaceutical, and technology sectors, little attention has been placed on other chapters of the agreement. Few commentators have noticed that the TPP includes provisions which are quite unique in trade agreements, in many places heeding recommendations of the United Nations and other global civil society organizations in a manner which advances human rights. This is important because while many of the 12 nations currently signed to the agreement have substantial domestic human rights protections that will prevent violations resulting from business operations, such as the United States, Australia, New Zealand, Japan, Canada, Peru, Chile, Singapore and to an extent Mexico, others, specifically Vietnam, Malaysia, and Brunei, do not.
During negotiations, the White House released a document, Advancing Human Rights through the Trans-Pacific Partnership, where the administration acknowledged that the TPP “has provided the Administration with significant opportunities to make progress on human rights issues” and they would therefore be developing the agreement in a manner which ensures “that people everywhere are treated with dignity and respect.” The document discusses country and issue specific actions taken by US negotiators to make clear that “protecting human rights … is a core American value.” Even so, of the available publications discussing the administration’s implementation of these goals, most carry an opinion similar to that of a DIPLOMAT article titled Sure, TPP Is ‘Win-Win’… Unless You Care About Human Rights. These authors seemingly miss the point, because trade agreements are not, and have never been, fundamentally concerned with human rights protections. While the goal of many organizations may be to change that reality, relative to most other international trade and investment agreements the TPP stands up as a progressive document, which in many ways heeds recommendations of civil society and of the United Nations Guiding Principles on Business and Human Rights (UNGP). Specifically, there are three chapters in the treaty in which provisions fulfilling the administration’s promise to highlight the importance of human rights are located: Chapter 19 – Labour, Chapter 23 – Development, and Chapter 9 – Investment.
Labour – Chapter 19
Article 19.3 requires that all nations adopt and maintain laws, and take action to implement those laws, which are consistent with the ILO Declaration on Fundamental Principles and Rights at Work and its Follow-up. The agreement also includes a duplicate list of rights, such as freedom of association and collective bargaining, elimination of forced labor, abolition of child labour, and elimination of discrimination. The express protections listed in 19.3 do differ slightly from the ILO’s recommended protections, in that they do not include minimum wage or work hours, but are nonetheless sufficient, and specifically address a major issue for signatory nations, prohibiting the worst forms of child labour.
Article 19.7, Corporate Social Responsibility, goes a step further in responding to the demands of civil society in requiring that signatory parties “endeavor to encourage enterprises to voluntarily adopt corporate social responsibility initiatives on labour issues that have been endorsed or are supported by that Party.” This article is followed by others which further layout the required means of implementation and the preferred methods of reporting for corporations and state parties in implementing labour and CSR standards.
Finally, in annex to the text of the agreement, the US has initiated Labour Consistency Plans with Brunei and Malaysia mandating specific changes to the domestic national laws of each country, which will place them closer to compliance with the ILO requirements. The US and Vietnam have agreed to a similar document in annex to Chapter 19, which is specific enough to require Vietnam to “develop and implement a strategy for targeting inspection and other enforcement activities to sectors where forced labour or child labour has been identified through the National Child Labour Survey or otherwise, including at informal work sites and sub-contractors in the garment industry.” These provisions in the TPP are in line with recommendations from international human rights organizations, and will force improvements in labour standards in the manufacturing powerhouses of Malaysia and Vietnam, greatly reducing the worst labour rights violations in those countries, which are known to be prevalent.
Development – Chapter 23
In an unprecedented move in US trade agreement history, Chapter 23 goes beyond merely arguing that trade enhances development, stating that signatory parties “affirm their commitment to promote and strengthen an open trade and investment environment that seeks to improve welfare, reduce poverty, raise living standards and create new employment opportunities in support of development.” Not only do they affirm this commitment, but they “acknowledge the importance of development in promoting inclusive economic growth, as well as the instrumental role that trade and investment can play in contributing to economic development and prosperity.” This models the UNGP language closely, asserting that trade and development are vital to prosperity and poverty reduction, a key first step in advancing development policy in line with UNGP recommendations.
Most importantly, while the chapter only uses the term sustainable development twice, and one of those instances merely in indirect reference to the UN sustainable development goals, it does make express reference to the importance of women to development. Article 23.4 may not include mandatory requirements on signatory parties, however it does recognize the importance of women in development and suggests steps which may be taken to “enhance the ability of women, including workers and business owners, to fully access and benefit from the opportunities created by [the TPP].” While many may take this for what it is on its face, a hollow but hopeful statement, the chapter does include public recognition from all signatories, including Malaysia and Brunei, that “enhancing opportunities in their territories for women, including workers and business owners, to participate in the domestic and global economy contributes to economic development.”
Investment – Chapter 9
For decades, scholars have lamented the ways in which ambiguous terms of art in international investment agreements like “fair and equitable treatment” and “tantamount to expropriation”, have been used in investor-state arbitration proceedings to restrain states domestic policy space. Many other erudite scholars will argue that the investor-state investment dispute settlement provisions in Section B of Chapter 9 of the TPP have a potential to encourage frivolous claims against states for violations of the agreement, which have, in the past, led to enormous damage awards. However, due to the adoption of recommendations from the UN Guiding Principles on Business and Human Rights (UNGP) and civil society organizations such as the International Institute for Sustainable Development (IISD) in Section A of chapter 9 of the TPP, the danger of frivolous claims by investors is reduced significantly from investment agreements of the past.
UNGP article 9 recommends that states draft investment agreements in a manner which prohibits them from having a reductive effect on the state’s domestic policy space to regulate human rights. The IISD Model Investment Agreement suggests that in order to implement the UNGP recommendations, states should, among other things, define and limit the minimum standard of treatment and create general exceptions provisions which retain policy space for the government to regulate in response environmental and human rights concerns.
An example of the traditional minimum standard of treatment provision in investment agreements follows as such; “Each Party shall accord to covered investments treatment in accordance with international law, including fair and equitable treatment and full protection and security.” Issues resulting from the vagueness of these terms include investors seeking remedy for regulatory efforts by states which do not conform to the investors’ ‘legitimate expectations’. In order to prevent these frivolous claims, and protect state’s domestic policy space, TPP article 9.6 clarifies that the minimum standard is to only include “treatment in accordance with applicable customary international law principles”, and that “the concepts of ‘fair and equitable treatment’ and ‘full protection and security’ do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights.”
In addition, 9.6 states that ‘fair and equitable treatment’ includes only “the obligation not to deny justice in criminal, civil or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world”; and that ‘full protection and security’ only “requires each Party to provide the level of police protection required under customary international law.” Article 9.6(4) goes even further, stating that “the mere fact that a Party takes or fails to take an action that may be inconsistent with an investor’s expectations does not constitute a breach of this Article, even if there is loss or damage to the covered investment as a result,” expressly precluding claims based on an investor’s expectations. This significantly reduces restrictions on government policy space to regulate human rights abuses by reducing the frivolous claims which may be presented by harmed investors covered by the agreement.
Article 9.15 prohibits claims by investors relating to regulatory measures that a state party “considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental, health or other regulatory objectives.” This is an express dictation of the UNGP article 9 requirement, reducing state’s fears that TPP provisions can be used to investors to restrict their policy space through threat of suit. Finally, as is common throughout other chapters of the TPP, Article 9.16 includes an affirmation of the “importance of each Party encouraging enterprises operating within its territory or subject to its jurisdiction to voluntarily incorporate into their internal policies those internationally recognized standards, guidelines and principles of corporate social responsibility that have been endorsed or are supported by that Party.”
The TPP will not eradicate all human rights violations by businesses in signatory nations, it was not intended to do so, and presumably no agreement could have this effect. The TPP does, however, heed recommendations of the UNGP and other civil society organizations, advancing progressive provisions to prevent human rights violations. The document should be challenged where it is faulty and applauded where it succeeds, not derided entirely for failing to meet unrealistic expectations. After all, the TPP increases trade, trade is essential to continued economic development, and economic development is core to achieving advancements in human rights in developing nations such as Vietnam and Malaysia, specifically those rights listed under the ICESCR. The three chapters examined above, which include more protective human rights provisions than any other multilateral trade agreement the US has entered into in its history, are a step in the right direction. The progressive language in this agreement shows the dedication of the international community to ending the cycle of human rights violations by businesses in the developing world. For this reason, I believe that these 12 courageous nations should be applauded; and for the same reason they should be simultaneously reminded that with great power, comes a great responsibility to ensure the TPP is used to advance human rights through sustainable development across the Pacific, and across the world.
*Jeremy S Goldstein is a 3L J.D. student at the University of Denver – Sturm College of Law and the Online Editor-in-chief of the Denver Journal of International Law and Policy.