A LACK of democracy in Westminster trade policy allows oil companies to sue governments across the world if they take action on climate change, a new report has said.
Published by The Ecologist website and the Abolish Westminster substack on Friday, the report details obscure legal clauses which it says the Department for Business and Trade (DBT) include in trade deals.
The clauses allow governments to be sued by foreign companies if they pass laws which damage their future profits in that country.
The UK is currently being sued under such a clause, because of a High Court ruling which blocked a coal mine in Cumbria last year.
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Woodhouse Investment Pte, an investment firm based in Singapore, but registered in the Cayman Islands, are suing the UK Government over the block, demanding compensation based on a clause included in a treaty between the UK and Singapore – from 1975.
The report argues that while all kinds of foreign companies can utilise these clauses, fossil fuel companies do so the most.
The clauses, called Investor State Dispute Settlement (ISDS) mechanisms, are included by countries across the world in trade deals.
However, research has found that the treaties fossil fuel firms use most often are the UK’s.
This, it has been suggested, means the UK’s trade deals cause almost as much climate-changing pollution as its domestic economy.
DBT, the report argues, and its predecessors are “responsible for a surprising portion of the world’s greenhouse gas emissions”.
The new report from Abolish Westminster and The Ecologist looks into why the UK “is at the centre of this spiderweb of treaties trapping the world in a fossil fuelled future”.
It concludes that the blame lies with a combination of imperial history, Whitehall inertia, and the fact that “Britain is probably the least democratic of the world’s democracies,” meaning that “elected MPs have almost no say over trade deals”.
Adam Ramsay, the journalist who researched and wrote the report said: “The constitutional system of the ancient British state means that trade deals are signed under the ‘Royal Prerogative’ rather than parliamentary authority, meaning there is pretty much no democratic accountability of how they happen.
“But in reality, everyone is accountable to someone, and British trade policy ends up being utterly shaped by big business.”
It also looks at the link between non-executive directors at DBT and lobby groups pushing for these clauses to be included in trade deals.
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And, the impact of Brexit on accountability of trade policy set by the UK Government is also examined.
Caroline Lucas, former Green Party MP and MEP, who was a trade policy expert with Oxfam before entering the European parliament, said: “UK trade policy remains cloaked in secrecy. Ironically, as a member of the European Parliament’s International Trade committee, I had far greater opportunities to scrutinise European trade policy, and to hold decision makers to account, than I ever had as an MP over UK trade policy at Westminster.”
You can read the full report on The Ecologist website and the Abolish Westminster substack on Friday.
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