US corruption critical to getting the TPP over the line

The United States, Malaysia, the Trans-Pacific Partnership, and Corruption

This article explores an astonishingly corrupt action by the United States Administration, in a desperate attempt to allow the Trans-Pacific Partnership (TPP) agreement to proceed. Although this happened a year ago, it has received relatively little publicity, especially given the drama of events leading up to the election,. It is however timely to review it, especially as a recent US report (see below) re-affirms the pretence of Malaysia’s ‘improvement’ in human rights issues, and further evidence of corruption at the highest level in Malaysia emerges.

The ILO and people trafficking.

The International Labour Organisation (ILO) estimates that there are currently more than 20 million people being forced to provide labour, or who are otherwise being trafficked or are enslaved. Around 90% of this occurs in the private sector, in industries such as agriculture and others equally as labour intensive.¹ WTO rules do nothing to prohibit any State from importing goods produced by other States with unacceptable labour standards — the ILO is essentially toothless.² Perhaps WTO rules should be better linked to prevailing standards of labour.³

United States and ILO Conventions

The United States has failed to ratify six of the Fundamental ILO Conventions, including Convention No. 29, the Forced Labour Convention.⁴ It joins China, the Republic of Korea (for a total of 12 countries) that find themselves unable—or unwilling—to ratify more than half of the ILO Conventions. ⁵

The most commonly stated reason for non-ratification, according to the Tripartite Advisory Panel on International Labor Standards (‘TAPILS’) is that to do so would be at variance with Federal and State laws. In the case of Convention No. 29 in particular, the conflict would arise from the US practice of having private firms run prisons for profit. ⁶

The ILO once wrote of Malaysia and its human rights status in quite glowing terms. ⁷ On the other hand, Malaysia, has ratified Convention No. 29. The irony!

Malaysia and the ‘Trafficking in Persons Report’

Coming now to Malaysia’s human rights record and the TPP.  The ‘Trafficking in Persons Report (‘TIP’) released by the United States Government ⁸ analyses countries in which there is observed human trafficking, and is used by the US Government to pressure countries on the issue. It is also used by various non-Governmental organisations (‘NGOs’), and the governments of some other countries. The document is written under the ægis of the Trafficking Victims Protection Reauthorization Act. ⁹ Countries are graded in three tiers from 1 (not so bad) to 3 (worst). The intent is admirable, the document is valuable, and the US should be applauded for its creation.

The report lists the various countries in each tier. ¹⁰ Tier 3 (the worst) includes what we might call the ‘usual suspects’. North Korea is an obvious example. Surprisingly, in 2014, Malaysia had become a Tier 3 country, after being in Tier 2 the previous year. The report on Malaysia is indeed harrowing to read. ¹¹ I’ve worked in Malaysia, and taken vacation there, and I was completely ignorant of these kind of abuses.

Trans-Pacific Partnership

Happy TPP Campers

The Trans-Pacific Partnership (‘TPP’) is a significant trade treaty involving 12 countries. ¹² Early last year, after a very close series of votes, the US Congress passed the Trade Promotion Authority (‘TPA’) legislation, which allows for a ‘fast track’ of the Administration’s approval of the Agreement, ¹³ and the signing of the TPP implementing legislation. This would deny Congress the ability to debate it point to point, which would quite possibly deny its passage. Rather, Congress gets a ‘yes or no’ vote only. The TPA was extremely important to President Obama. However, the Trade Promotion Authority Bill was amended in May last year at the behest of Senator Bob Menendez (D-New Jersey). The amendment disallowed signing trade agreements (such as the TPP) with any country designated in Tier 3 of the TIP. Malaysia was at that time on Tier 3, and was a party to the (yet to be signed) TPP. The Washington Post called the amendment a potential poison pill. ¹⁴ The Obama Administration considered this a major setback to its attempt to get the TPP over the line. ¹⁵

Rumours started to emerge that Malaysia would be upgraded to Tier 2 in the 2015 report. There had been no change in the status of human rights in Malaysia, nor had the Malaysian Government taken any significant human rights decisions or initiatives.¹⁶

The report was delayed until after the TPA legislation had been approved by Congress, presumably in case a Tier change was not required. Then, the report was released and indeed, Malaysia had been promoted!¹⁷ The change in status allowed for the TPP to proceed unhindered, despite Senator Menendez’ amendment. Not surprisingly, the decision was met with outrage.^{18 19}

It’s fairly well documented that this, amongst other assessments, was politically driven: ²⁰

A Reuters examination, based on interviews with more than a dozen sources in Washington and foreign capitals, shows that the government office set up to independently grade global efforts to fight human trafficking was repeatedly overruled by senior American diplomats and pressured into inflating assessments of 14 strategically important countries in this year’s Trafficking in Persons report.

John Kerry without a leg to stand on

The decision put John Kerry, Secretary of State, on the back foot. But the success of the ‘trade deal’²¹ was considered more important than principle, which is a sad indictment of the actions of such a significant State and trader.

A year later, and the 2016 report has been published.²² We read, for example: (p254)

Malaysia is a destination and, to a much lesser extent, source and transit country for men, women, and children subjected to forced labor and women and a small number of children subjected to sex trafficking.

Reports allege some corrupt officials impede efforts to address trafficking crimes.

The Washington Post provides its own summary of the report: ²³

WITH ANOTHER year comes another report from the State Department on trafficking in persons and another shocking account of human rights abuses around the world: Laborers sweat past nightfall in brick kilns for no pay. Girls are trapped in hotel rooms with barred windows and are repeatedly raped by whomever their captors let in the door. Young boys are made to beg for money on the streets — but maimed first to increase profits.

1MDB Scandal

So there we have it — the US administration corruptly distorts an important report to help get its ‘trade’ deal passed. At the time of writing the TPP is looking more and more unlikely, because of election shenanigans, but that’s a topic for another day. However, corruption goes on apace in Malaysia.

Najib Razak prepares to give a speech on the equality of women.

Although it’s not had that much press in the US and elsewhere, a huge scandal has been brewing involving the Malaysian Prime Minister, Dato’ Sri Haji Mohammad Najib bin Tun Haji Abdul Razak,  and a Government owned development company, 1Malaysia Development Berhad (1MDB).

The scandal garnered attention this week when the US Justice Department took action on the basis of alleged money laundering through the US, of money apparently misappropriated from 1MDB.²⁴ Razak is specifically implicated.

Tan Sri Mohamed Apandi Ali

Surely this can’t be true? Let’s hear from the Malaysian Attorney General.
²⁵

Malaysian Attorney-General Tan Sri Mohamed Apandi Ali reiterated earlier today that local investigations by multiple agencies did not uncover any criminal activity at 1MDB and no criminal prosecution has been initiated in any jurisdiction either.

And you know, it’s pretty easy to overlook three quarters of a billion dollars going into your private offshore account when you’re a busy prime minister, right?

So how did Tan Sri Mohamed Apandi Ali come to be the Attorney-General? The previous A-G, Abdul Gani Patail was preparing corruption charges against the Prime Minister, Najib Razak, over the 1MDB affair. Razak got wind of this, and sacked the A-G, appointing Apandi. Who promptly ‘examined’ the charges and found that they had ‘no basis’.²⁶

This is the country that the US was happy to fudge its own human rights report for, to get a trade deal completed.

Footnotes:

1. International Labour Organisation, Stopping Forced Labour and Slavery-like Practices; The ILO Strategy for 2012-2015′.
2. Wolfgang Plasa, Reconciling International Trade and Labor Protection: Why We Need to Bridge the Gap between ILO Standards and WTO Rules (Lexington Books 2015) 16.
3. Ibid.
4. C029 – Forced Labour Convention, 1930 (No. 29) – International Labour Organisation.
5. Wolfgang Plasa, Reconciling International Trade and Labor Protection: Why We Need to Bridge the Gap between ILO Standards and WTO Rules (Lexington Books 2015) 41
6. ‘U.S. Ratification of ILO Core Labor Standards’ 8 <http://www.uscib.org/docs/US_Ratification_of_ILO_Core_Conventions.pdf>
7. Internationales Arbeitsamt (ed), The Cost of Coercion: Global Report under the Follow-up to the ILO Declaration on Fundamental Principles and Rights at Work ; International Labour Conference, 98th Session 2009, Report I (B) (Internat Labour Off 2009) paras 209, 244, 272, 286.
8. http://www.state.gov/j/tip/rls/tiprpt/index.htm
9. Bureau of Public Affairs Department Of State. The Office of Website Management, ‘Trafficking Victims Protection Reauthorization Act of 2005’ (U.S. Department of State, 10 January 2006) <http://www.state.gov/j/tip/laws/61106.htm>  s.104(2)(b).
10. Bureau of Public Affairs Department Of State. The Office of Website Management, ‘Tier Placements’ (Department Of State The Office of Website Management, Bureau of Public Affairs 2014) Report <http://www.state.gov/j/tip/rls/tiprpt/2014/226649.htm>
11. Bureau of Public Affairs Department Of State. The Office of Website Management, ‘Malaysia’ (U.S. Department of State, 20 June 2014) <http://www.state.gov/j/tip/rls/tiprpt/countries/2014/226770.htm>
12. Jessica Glenza, ‘TPP Deal: US and 11 Other Countries Reach Landmark Pacific Trade Pact’ The Guardian (5 October 2015) <http://www.theguardian.com/business/2015/oct/05/trans-pacific-partnership-deal-reached-pacific-countries-international-trade>
13. ‘Trade Promotion Authority | Office of the United States Trade Representative’ <http://www.ustr.gov/trade-topics/trade-promotion-authority>
14. Lydia DePillis, ‘There May Have Been a Poison Pill in the Fast-Track Trade Bill’ The Washington Post (23 April 2015) <http://www.washingtonpost.com/blogs/wonkblog/wp/2015/04/23/there-may-have-been-a-poison-pill-in-the-fast-track-trade-legislation/>
15. ‘Huffington Post’ (Obama Takes Unexpected Setback On Trade Agenda As Fast Track Passes Senate) <http://www.huffingtonpost.com/2015/05/22/senate-passes-fast-track_n_7425614.html>
16. ‘Exclusive: U.S. Upgrades Malaysia in Annual Human Trafficking Report – Sources | Top News | Reuters’ <http://ca.reuters.com/article/topNews/idCAKCN0PJ00F20150709>
17. For a very detailed report see Karin Sun, ‘State Department Faces Backlash Over “Politicized” Trafficking Report’ (The Washington Diplomat, 30 September 2015) <http://www.washdiplomat.com/index.php?option=com_content&id=12470:state-department-faces-backlash-over-politicized-trafficking-report&Itemid=428>
18. Reuters, ‘Outcry as Malaysia’s Human Trafficking Record Brings Praise from US’ The Guardian (8 July 2015) <https://www.theguardian.com/us-news/2015/jul/09/us-to-move-malaysia-off-lowest-tier-on-list-of-worst-human-trafficking-centres> accessed 25 July 2016
19. ‘Obama Accepts Malaysia Slavery in Order to Seal TPP Deal’ <http://www.digitaljournal.com/news/world/obama-accepts-malaysia-slavery-in-order-to-seal-tpp-deal/article/437932>
20. ‘Special Report: State Department Watered down Human Trafficking Report’ Reuters (4 August 2015) <http://www.reuters.com/article/us-usa-humantrafficking-disputes-special-idUSKCN0Q821Y20150804>
21. I would argue that the ‘trade deal’ has little to do with trade, and more to do with the US asserting its political influence in the region.
22. http://www.state.gov/documents/organization/258876.pdf
23. Board E, ‘An Annual Demand to End Human Trafficking around the World’ The Washington Post (4 July 2016) <https://www.washingtonpost.com/opinions/globalopinions/an-annual-demand-to-end-to-human-trafficking-around-the-world/2016/07/04/2ef4bedc-3f01-11e6-80bc-d06711fd2125_story.html>

24. Paddock RC, ‘Justice Dept. Rejects Account of How Malaysia’s Leader Acquired Millions’ The New York Times (22 July 2016) <http://www.nytimes.com/2016/07/23/world/asia/malaysia-1mdb-najib-razak.html>

25. http://www.themalaymailonline.com/malaysia/article/malaysia-meets-us-ambassador-over-dojs-1mdb-suit
26. Report S, ‘ARREST WARRANT FOR THE PRIME MINISTER! – The Real Reason The Attorney General Was Fired – EXCLUSIVE!’ (Sarawak Report) <http://www.sarawakreport.org/2015/07/arrest-warrant-for-the-prime-minister-the-real-reason-the-attorney-general-was-fired-exclusive/>