TTIP, ISDS and the contract mismatch

c: | f: /

The proposed trade deals between the US and Europe are shady at best. Shrouded in secrecy until recently, I couldn’t figure why aspects of it were necessary. Until now.

With a typical BuzzFeed-esque slant towards the sensational, their article on the LCIA arbitration service has finally allowed me to clear the murky waters surrounding the TTIP and ISDS. But it’s not the article itself, but one of the commenters who made me see how everything fits together.

Before I divulge the quote, some brief background on the source of my confusion. TTIP in and of itself is a noble notion. Reducing trade barriers means potentially lower costs which benefit consumers and attract foreign businesses to invest in the country. I don’t agree with the cutting of red tape to the extent that slapdash food safety standards or unlabelled GM crops are permitted, but some parts do make sense.

The trouble is, now that the lid has finally been lifted on the secrecy behind it all, proponents are using words similar to how the EEC was marketed to us in the 1970s: free trade between nations, borderless controls, greater employment opportunities, yahde yahde. And now look at the EU as we have it: one failing currency, bailouts, countries going bankrupt, ridiculous anti-business laws, restrictive borders, blah blah. The EU mess was born out of a noble gesture, but corporate greed and power subverted the process. Thatcher was duped too, signed away our country’s rights, and realised (too late) that a single currency was merely a way to introduce a federal Europe through the back door.

The part I couldn’t fathom is why a government would willingly enter into an agreement such that a private company could sue the state for millions over policy decisions. It seemed ludicrous to me that it would enter into an agreement arbitrated by a secret court staffed by lawyers who had a vested interest in seeing the business win the case. It’d cost the taxpayer — the country — millions each time it was sued. Surely that would fly in the face of the charter they’re supposed to uphold to represent us, the people?

Then, in the midst of the usual accusations of trolling and name-calling, Chris Worth summed the entire debacle up in three paragraphs and made me see how it all fits together:

A good article on the “scary secret courts” bit that’s worrying everyone about the TTIP. It’s not as scary as it sounds – arbitration services, after all, are routinely used between contracting parties. What the article misses, though, is the real reason our government uses them – to keep mistakes out of public view. And in large IT projects, there are many, many mistakes to hide.

I’ve seen the skills mismatch between civil servants and technical partners on large public sector projects – not in intelligence, but relevant experience. How can an Oxbridge Classicist or PEP grad approve the technical specs of a £1bn IT system? This problem is global – essentially no major IT project led by civil servants has ever delivered value; billions are lost in mission creep and mismanaged expectations. A shark and a jaguar can’t breed no matter how much time you spend justifying the need for it.

Secret courts let both parties keep their mistakes hidden. And that’s the real scary part.

There it is in black and white, and I can’t believe I didn’t spot the link beforehand because it’s something I’ve mentioned a lot in conversations. Time and again, contracts are put up for tender by people who understand the need for a service but don’t understand the intricacies of implementing it. Companies bid for the work. They understand how to implement complex systems, but have only a limited notion behind the basic need for the service, because it’s been badly specified in the first place. Thus there’s always a mismatch between what is desired and what is delivered.

It’s the same in mundane software. Someone says they want to build self-service checkouts for supermarkets. They state what they want the devices to do, but they don’t understand software engineering or UI design. A software/hardware company goes away and builds the system to that (idealistic) spec as best they can. They need to change things to satisfy the framework du jour, make UI decisions, meet current legislation, and tweak the system to cater for inadequacies in the spec.

The result? Something that meets what the specification company thinks the user wants, and the design company delivered to much fanfare, but is a sack of crap. The end user is left with a system that isn’t fit for purpose.

By the time everyone realises they’ve made a mistake and the two sets of people’s visions didn’t actually align, it’s too late. Money’s changed hands and fights ensue over blame. Since in government contracts, this reveals an utter waste of public money, that’s when ISDS — a sort of corporate pre-nuptual agreement — would kick in to sort out the mess. In secret.

As Chris states, that’s the really scary part, and why we should campaign for transparency in such proceedings. Perhaps then, if decisions were publicly accountable, it would be possible to draft in project managers who know what the hell they’re doing, and private firms who can ask the right questions.

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