(Post updated to fix mis-spelling and a typo which added 3 Justices to the Supreme Court).
Yes, something like that could be the reality the next time municipalities or U.S. states attempt to stop doing business with an undemocratic repressive state. Lost in all the tributes to Nelson Mandela is one chilling fact: no sooner did the South African Apartheid regime end then the usual suspects cooked up a plan to stop another divestment movement from happening again. First they tried the the MAI (Multilateral Agreement on Investment). Formulation of this international agreement started in the OECD in the secret in 1995. It would have stopped localities from pursuing their own economic sanctions against an oppressive regime -- removing decision-making power from governments by making sanctions a matter of corporate rights and restricting trade decisions to economic factors only. Massive grassroots push-back created delays in voting on this in the OECD. Then France backed out causing the matter to drop at that time.
Secret negotiations took place from 1995 until 1997 when an OECD source leaked a copy of the draft agreement to a Canadian citizen group. The leak revealed that the MAI sought to establish a new body of universal investment laws that would guarantee corporations unconditional rights to buy, sell and do financial operations all over the world, without any regard for national laws and citizens' rights.
Unfortunately, the MAI continues to rise up, typically in WTO negotiations (most recently in Cancun 2003). To paraphrase Monty Python and the Holy Grail "It's not dead yet" and probably never will die. Grassroots push-back has kept it at bay up to now.
But there's more than one way to subvert democracy. Also in the late 1990s a group called The National Foreign Trade Council (which represents major U.S. corporations that it won't name for fear consumers will boycott them) brought suit against a Massachusetts law against trade with Burma. Using a different argument than corporate rights, Crosby v. National Foreign Trade Council attacked the Massachusetts law on the basis that it "impermissibly infringes on the federal government's power to regulate foreign affairs."
On June 19, 2000 the U.S. Supreme Court decided 8-4 8-1 in favor of the National Foreign Trade Council. Souter delivered the opinion "The issue is whether the Burma law of the Commonwealth of Massachusetts, restricting the authority of its agencies to purchase goods or services from companies doing business with Burma, 1 is invalid [**2291] under the Supremacy Clause of the National Constitution owing to its threat of frustrating federal statutory objectives. We hold that it is."
Whether this prevents future divestment movements we can not tell for certain. Most likely divestment by legislative action will have to happen at the national level or not at all. This also has nothing to do with non-governmental entities, such as private universities. (For example, at Columbia University in the 80s the divestment protests forced the administration to disclose that it had over $100 million of its portfolio invested in companies that did business with South Africa and even included some South African companies). A future divestment movement will have a much harder time than the anti-apartheid one did.
I admit that I felt astonishment when South Africa not only let Nelson Mandela out of jail but then elected him President. That he proved a great statesman, president and world leader gave me hope that decent human beings can win sometimes. With Mandela humanity won a trifecta.
However, (and there's always this however) what the National Foreign Trade Council and its secret members have demonstrated (along with a Supreme Court already positioned far to the right) is that they will cheerfully steam-roller over countless people in order to enjoy their wealth, power and privilege. Anything good the rest of us do they will scheme and lie and do anything they can get away with to undo it. These people have more in common with the patricians of ancient Rome than any citizen in a democracy in the 21st century. By all means celebrate Nelson Mandela's life and accomplishments. But humanity -- watch your back!
Sources:
Citation for the Supreme Court case:
STEPHEN P. CROSBY, SECRETARY OF ADMINISTRATION AND FINANCE OF MASSACHUSETTS, ET AL., v. NATIONAL FOREIGN TRADE COUNCIL No. 99-474
SUPREME COURT OF THE UNITED STATES
530 U.S. 363; 120 S. Ct. 2288; 147 L. Ed. 2d 352; 2000 U.S. LEXIS 4153; 68 U.S.L.W. 4545; 2000 Cal. Daily Op. Service 4852; 2000 Daily Journal DAR 6469; 2000 Colo. J. C.A.R. 3538; 13 Fla. L. Weekly Fed. S 441
March 22, 2000, Argued
June 19, 2000, Decided
Citations for analysis of the case:
Time for a new approach? Federalism and foreign affairs after Crosby v. National Foreign Trade Council. James J. Pascoe. Vanderbilt Journal of Transnational Law. 35.1 (Jan. 2002) p291.
Wide Impact Possible From Decision Axing Burma Law. The Legal Intelligencer. (November 6, 1998 Friday) Pg. 4 By Leslie Miller, Associated Press.
