Earlier this year, it was revealed that India is facing legal claims from international investors in as many as 23 arbitration cases, before various tribunals. These claims, worth billions of dollars, arise out of bilateral investment treaties between India and other states. One striking feature of such treaties is that they allow international investors (primarily MNCs) to initiate a dispute directly in an international tribunal, bypassing the state’s own constitutional system and its courts. Often, the disputes revolve around measures that were triggered by public health emergencies, economic crises or other matters directly involving public welfare — which would therefore be permissible under the Constitution, but which a corporation believes have negatively impacted its financial interests.
This reveals an important truth about the contemporary, globalised world: issues that were earlier resolved within a sovereign state in accordance with its constitutional system have now acquired a transnational character. There are other contemporary examples: because of its attempts to make essential medicines affordable through amendments to its Patent Act, India has come under pressure from the U.S. and the European Union (at the behest of prominent pharmaceutical companies), while finding support and emulation in countries like South Africa and Thailand. Indeed, in 2011, the EU seized shipments of life-saving Indian drugs that were being transported to Africa and Latin America, on the basis that it could apply its more restrictive patent and customs laws to goods in transit through its territory.
Clearly, while global problems cannot be solved without nation-states, nation-states cannot solve their problems on their own. India’s battle to preserve affordable access to medicines is part of a larger struggle, where participation in the global intellectual property regime has severely constrained the ability of countries to respond to public health crises. Whatever a country’s Constitution may say about the right to life and the right to health for its citizens, it will still be dragged before an international tribunal if it attempts to forestall or mitigate a public health crisis by lifting patent restrictions upon, for example, a life-saving drug. The point is not only about who finally succeeds in litigation — rather, it is that the final decision is taken by a set of individuals who are beyond the structures of accountability that are established in democratic and constitutional states.
As pointed out above, the transnational character of these issues suggests that the response cannot succeed if it is unilateral. In the latest version of the model bilateral investment treaty drafted by India, for example, the scope of investor-state dispute settlement by international tribunals has been curtailed. But it takes many to tango: until the perils of bypassing national constitutional systems are accepted more broadly, individual attempts will fall short.
The issues are not limited to conflicts before international forums. Recent months have seen clashes between national regulatory authorities and the corporations that drive the new “gig economy”, such as Uber. In October, Uber and Ola drivers in Mumbai called for an indefinite strike over low pay, after a similar strike in Delhi earlier. In the U.K., the EU and various States in the U.S., there has been protracted and bitter litigation over the legal obligations that Uber owes to its drivers. The conflict may take different forms in different countries, but each time there are striking similarities, stemming from Uber’s business model, which is transnational in character. And, like in the case of investment treaties, it is often difficult for one country to tackle the problem alone – especially when the corporation is global in character, and can issue a credible threat of withdrawing substantial levels of investment. Nor is worker power, as long as it is confined within borders, and not trans-nationalised, sufficient to combat the power of MNCs.
The example of DiEM25
It is always helpful to look elsewhere, to see how people in other parts of the world have attempted to engage with such issues. A recent example is that of the Democracy in Europe Movement 25. DiEM25 arose after the debt crisis in Greece had resulted in a wide-ranging “structural adjustment programme” imposed upon that country by the European Commission, the European Central Bank, and the International Monetary Fund (or “the troika”). This included severe austerity measures (including cuts to public funding, resulting in mass unemployment) and widespread privatisation, in direct contravention of the publicly expressed will of the people, through both elections and a public referendum.
The central insight of DiEM25 — one of whose co-founders, Yanis Varoufakis, was Greece’s Finance Minister during the debt crisis — is precisely that today a progressive movement oriented towards social justice and fundamental rights cannot succeed if it is constrained within national borders. Many of the fundamental decisions that shape national policy (with wide-ranging consequences) are simply beyond the ken of nation-states themselves. For this reason, DiEM25 identifies as “pan-European”, and isolates a range of issues “currently left in the hands of national governments powerless to act upon them” — including public debt, banking, inadequate investment, migration, and rising poverty. In its manifesto, DiEM25 returns these issues to democratic control, but also acknowledges that the solutions needed to achieve this can only come from transnational action.
Another important insight of the DiEM25 manifesto is that the world today is based on “the reduction of all political relations into relations of power masquerading as merely technical decisions.” For example, what steps a country like India must take to ensure the availability of life-saving drugs (and not only during a public health crisis) is a decision that must be taken democratically and politically, within the constitutional framework. At present, however, it always remains ultimately subject to a “technical decision” (potentially taken by an international tribunal) about whether India has breached its obligations under an international intellectual property rights treaty regime. What needs to be done is to reshape that regime to make it more democratic, an effort that, by its very nature, cannot be undertaken by a single country.
The focus on democracy is particularly important with respect to a third issue: the increasing role of technology in our daily lives. This debate has come to the fore recently, with the long-running conflict over Aadhaar, and the draft DNA Profiling Bill. The relationship between technology and human freedoms will be vital in the future. It is therefore particularly interesting that, through the evolving concept of “technological sovereignty”, DiEM25 has drawn a specific link between technology and democracy, which can help us think through contemporary issues such as platform monopolies, the ubiquity of AI in public decision-making (including on public welfare), etc.
An international new deal
In September, writing for The Guardian , U.S. politician Bernie Sanders called for a “progressive international”: “an international progressive movement that mobilizes behind a vision of shared prosperity, security and dignity for all people, and that addresses the massive global inequality that exists, not only in wealth but in political power.” Mr. Varoufakis responded to this by calling for an “international new deal”. Movements such as DiEM25, which have sprung up in various parts of the world, serve as potential blueprints and models for what a “progressive international” may look like. It is a conversation that progressive movements in India must take heed of, and engage with, if we are to adequately address the transnational problems that face us today.
Gautam Bhatia is a Delhi-based lawyer