State of Power An annual anthology on global power and resistance 2015 State of Power 2015 An annual anthology on global power and resistance Editors: Nick Buxton and Madeleine Bélanger Dumontier Translator for Juan Hernández Zubizarreta: Karen Lang Design: Hans Roor / Jubels This publication and its separate chapters is licensed under a Creative Commons Attribution- NonCommercial-NoDerivs 3.0 license. You may copy and distribute the document, in its entirety or separate full chapters, as long as it is attributed to the authors and the Transnational Institute, cites the original source for the publication on TNI’s website, and is used for non-commercial, educational, or public policy purposes. ISSN: 2405-7592 Published by The Transnational Institute PO Box 14656 1001 LD Amsterdam The Netherlands Email: [email protected] www.tni.org Contents Introduction 4 Fiona Dove The new global corporate law 6 Juan Hernández Zubizarreta Political capture by the financial industry 17 Manolis Kalaitzake The true stakes of Internet governance 28 Richard Hill Gambling on hunger and climate change 38 Sasha Breger Bush Mexico: Challenging drug prohibition from below 50 Sebastian Scholl Contesting big mining from Canada to Mozambique 63 Judith Marshall Organising workers’ counter-power in Italy and Greece 77 Lorenzo Zamponi and Markos Vogiatzoglou How economics bolstered power by obscuring it 87 Michael Perelman 3 State of Power 2015 Introduction Fiona Dove The Transnational Institute is very pleased to present the fourth edition of our popular annual State of Power report. We publish it in January each year to coincide with the annual international meeting in Switzerland of what Susan George calls “the Davos class”. This series seeks to examine different di- mensions of power, unmask the key holders of power in our globalised world, and identify sources of transformative counter-power. This time, we experimented with ‘crowd-sourcing’ by putting out an open call for contributions. We were keen to engage activist-scholars outside our immediate circles and curious as to how this would shape the content of the report. The compiled essays cover an impressive breadth of themes, from corporate law to the dominance of the financial sector, from big mining to food speculation. They also bring to the fore social struggles to challenge power dynamics, from Mexico to Mozambique, from Canada to Italy and Greece. Juan Hernández Zubizarreta unpacks how transnational corporations have secured ‘legal certainty’ through the multitude of norms, treaties and agreements making up a new body of global corporate law that goes against the interests of the world’s people – with the Transatlantic Trade & Investment Part- nership (TTIP) just one of the new bricks in the wall. This would not have been possible without what Judith Marshall calls the ‘promiscuously intimate’ relationship between governments and companies. Using the mining sector as her prism, she gives an illuminating account of how this relationship developed, and asks how the metamorphosis from cor- porate predator to ‘development partner’ happened. Marshall points to the ‘International Articulation of People Affected by Vale’ as a model for building counter-power. The extent to which the financial industry has captured government policy too is well analysed by Manolis Kalaitzake. He highlights the financial sector’s political victories since the crash, including the successful watering down of the EU Financial Transaction Tax. He offers some directions for what is needed to chasten this power and stimulate socially useful, sustainable economic recovery. Sasha Breger Bush also looks at the potent influence of the financial industry – from the global economic level down to that of households. She focuses on the role of financial speculation in fuelling hunger, land dispossession and climate change, and how the financial sector not only gets away with it but innovates false financial ‘solutions’ to the very problems it creates. She suggests a counter-strategy combining de-legitimation, stronger financial regulation and de-linking from global markets, particularly for food. Michael Perelman offers another angle on how corporate power is bolstered. He looks to how neo liberal economics has constructed a powerful ideological system to justify the exercise of abusive economic power and to counter every reasonable demand for environmental protections or better working condi- 4 State of Power 2015 Introduction Fiona Dove tions. Economists do this primarily, he argues, by obscuring or ignoring power. The author challenges misleading ‘economics as science’ claims by putting power back into the economic equation. Against the background of the concerted neoliberal attack on the power of labour that Perelman refers to, Lorenzo Zamponi and Markos Vogiatzoglou describe the radical innovations in ’organising the un- organised’ taking place under contemporary austerity in Italy and Greece. They argue that these experi- ments can only be sustained through new union structures and practices, as well as closer cooperation across labour-related movements in organising all parts of the population into the worker counter-power of tomorrow. Two arenas of power, often blind spots in analyses of the global economy, are covered in the State of Power 2015. One is the Internet and the other is organised crime. Both point to disturbing governance scenarios that signal the urgency of acting to build serious transformative counter-power. Few doubt the significance of the current information revolution, but most, Richard Hill warns, don’t grasp the power implications. US policy-makers do, however, and use their unilateral power over the ad hoc ‘multi-stakeholder’ governance of the Internet for political and economic ends (e.g. mass sur- veillance, quasi-monopoly profits for Google). The US and its professional coterie of commercial repre- sentatives work hard to keep it that way. I would refer readers back to State of Power 2014 and David Sogge’s essay on the Global Redesign Initiative of the World Economic Forum, which advocates this kind of ad hoc multi-stakeholder governance as the undemocratic model for global governance in the future. In light of the recent disappearances in Mexico, Sebastian Scholl paints a grim and complex picture of how organised crime and corruption thrive in conditions of institutional or democratic weakness, shaped to a large extent by distinctive transnational relations (importantly, in this case, with the US). He offers a glimmer of hope for Mexico in analysing how the Movement for Peace with Justice and Dignity has been accumulating ‘social power‘ among people affected by the ‘war on drugs’, extending this into ‘associative power’ (new alliances) for and beginning to translate that into political power. We hope these essays prove useful food for thought and contribute to the broad movement working to tip the balance of power in favour of democratic forces concerned with peace, justice, equity, solidarity and sustainability. Fiona Dove has been Executive Director of TNI since 1995. PS We received a number of other good papers, which did not make the report, but which we have published on our site as working papers. See http://www.tni.org/category/series/recommended-reading-state-power 5 State of Power 2015 The new global corporate law Juan Hernández Zubizarreta The global economic crisis that unfolded in 2009 was significant not just for the questions it raised over the power of big finance, but also for the attention it drew to other crises facing our planet – notably food, ecology and care work. What has been given less attention is the national and international legal systems that underpin these crises and the way legislation has been skewed in favour of capital and transnational corporations. The reinterpretation of legislation in favour of capital and transnational corporations and the regulatory asymmetry this causes vis-à-vis the rights of the unprotected majorities are undermining the rule of law, the separation of powers and the very essence of democracy. Now more than ever in history, law is being used to benefit political and economic elites. At the international level, this allows corporations to operate free from regulatory controls and with a high level of impunity. A recent example is the case of transnational oil corporation Chevron, which conditioned signing the investment agreement with YPF on Argentina’s Vaca Muerta oil field upon the adoption of reforms to federal and provincial laws. Chevron’s proposals were set out in a series of “strictly confidential” docu- ments, which focused on the maximum amount of taxes the provinces could charge the company, the duration and characteristics of the concessions, and tax stability for the oil company and its subsidiaries. The proposals favouring the oil corporation were written into the new law on hydrocarbons, which the Argentine Congress approved on 30 October 2013 in order to “promote investments in exploration”.1 6 State of Power 2015 The new global corporate law Juan Hernández Zubizarreta This is a very clear example of how corporations intervene in regulations designed to control them, which is leading to a profound crisis of democratic institutions and popular sovereignty, the violation of the sep- aration of powers and the rule of law, and the contractualisation of legal norms and economic relations. Finally, it also places the rights of corporations above the rights of people through the privatisation of legal norms and institutions. Transnational