On 13 May, SOMO and seven other organisations that put questions to Rio Tinto at its London AGM on 8 April wrote an open letter to Rio Tinto’s Chief Executive Office, Jean-Sebastien Jacques, because the…
Trade and investments
Trade and investment liberalisation are considered by many to be important instruments of development policy. In practice, global trade and investment regimes focus on securing profits for corporations and foreign investors above all else.
Regulations which protect and benefit citizens, such as union rights, consumer and environmental protection, and financial regulation are described as barriers to investment and growth, rather than sound social policy.
Many trade and investment agreements include investment protection and arbitration clauses that allow corporations to sue governments for policies that may adversely affect profits. A health warning on cigarettes, a ban on open-pit mining, and a plan to phase-out coal are but a few real examples of social policies that sparked the threat of corporate legal action.
Transparency and democracy around trade and investment decisions is woefully lacking. Negotiations are conducted behind closed doors. Investment disputes are handled by private tribunals, rather than regular courts.
SOMO examines a wide variety of trade and investment mechanisms, analysing their impact on society and sustainable development goals. We also study their implications for financial and other regulatory frameworks. We advocate for modern trade and investment policies that contribute simultaneously to social justice, sustainability, and just economic development. We stimulate political debate around planned trade agreements – like TTIP, CETA and TISA – that conflict with these goals.read more less
Today’s economic system is a system driven by shareholder value and the interests of large corporations: it maximises their profits, often ignoring the social and environmental costs. The current globalised world does not offer a sustainable level playing field, and as a result, corporations are caught in a race to the bottom.
SOMO wants to contribute to a fair economic system, in which corporations and investors contribute to financing public goods and services, and governments and institutions implement adequate checks and balances, serving social and ecological interests.
Private gain, public loss
SOMO’s research reveals how the current economic and financial system perpetuates economic inequality, and how it exacerbates the power imbalance between the private sector and civil society. Through corporate tax avoidance. Through trade and investment agreements that give companies the right to sue governments for enacting sound social policy. Through a volatile financial system that is increasingly disconnected from the real economy. It is a system of private gain and public loss that leaves ordinary people paying the price.
Our focus is on the social and economic impact of tax treaties and regimes, trade and investment mechanisms and agreements, and the practices and lobby of the financial sector. We pay particular attention to the impact of Dutch and EU policies on low-income countries, examining the degree to which they cohere with sustainable development policies and human rights frameworks.
We work with others in the Netherlands, in Europe, and across the globe, to adapt the economic system, so it serves the public interest and facilitates a more equitable distribution of resources. We want people to be able to control their own economic circumstances, through democratic processes with adequate checks and balances.