People Begin To Wake Up To Massive Dangers Of Investor-State Dispute Resolution

from the this-is-the-big-one dept

Techdirt has been writing about investor-state dispute resolution (ISDR) mechanisms in international trade treaties like TPP and TAFTA/TTIP for two main reasons. First, because of the scale involved: ISDR allows companies to sue entire countries for huge sums, alleging loss of future profits. And secondly, because few seem aware of this growing threat to the national sovereignty of many countries around the world. That finally seems to be changing, with a number of articles warning about the dangers of ISDR appearing recently.

For example, here's a report from the Transnational Institute looking at ISDR in the proposed free trade agreement between the EU and Canada (CETA): This briefing highlights the public debate around fracking; the interests of Canadian oil and gas companies in shale gas reserves in Europe; and the impacts an investment protection clause in the proposed CETA could have on governments’ ability to regulate or ban fracking. It examines the case study of the company Lone Pine Resources Inc. versus Canada, which, using a similar clause is challenging a fracking moratorium and suing the Canadian government for compensation, and warns this could be the state of things to come in Europe. It recommends that the investor-state dispute settlement mechanism should not be included in CETA. An article on the Huffington Post site considers ISDR in TPP: That agreement aims to secure a binding agreement among signatory countries for "trade" rules that would trump national laws in a wide range of areas, including rights to protect the health of the public. It could require countries to rescind national regulations, even laws that protect public health, in the face of claims that they restrict trade. An important post from Corporate Europe Observatory points out (as Techdirt did) that the leaked European Commission mandate for TAFTA/TTIP explicitly includes ISDR: Leaked draft versions of the EU negotiating mandate for a far-reaching free trade agreement with the US -- to be approved at next week's trade minister meeting (14 June) -- reveal the European Commission's plans to enshrine more powers for corporations in the deal. The proposal follows a persistent campaign by industry lobby groups and law firms to empower large companies to challenge regulations both at home and abroad if they affect their profits. As a result, EU member states could soon find domestic laws to protect the public interest challenged in secretive, offshore tribunals where national laws have no weight and politicians no powers to intervene. It goes on to give an excellent summary of how ISDR has already been used to sue governments around the world, and discusses the case of Chevron, and its single-minded efforts to get ISDR into TAFTA/TTIP: Chevron is currently engaged in a controversial legal battle with Ecuador. The company initiated arbitration to avoid paying US$18 billion to clean up oil-drilling-related contamination in the Amazonian rainforest, as ordered by Ecuadorian courts. The case has been lambasted as "egregious misuse" of investment arbitration to evade justice. No wonder Chevron dedicated its complete contribution to the US government's TTIP consultation to investment protection, "one of our most important issues globally" as they put it. Finally, a new 24-page report from The Democracy Center (available in English and Spanish), entitled "Unfair, Unsustainable, and Under the Radar," offers perhaps the most approachable introduction to this subject: We look at how the international investment rules system is being used to punish El Salvador for blocking poisonous gold mining, against Germany for stopping nuclear power, and to attack public health regulations for the tobacco industry in Uruguay. And we flag the next target for the system: government ability to regulate 'fracking'.



Unfortunately, wide knowledge of this system and how it works doesn't really exist beyond a small collection of lawyers and advocates. Published in May 2013 this report explains what seems to many a highly technical issue for a non-technical audience, and in so doing aims to help put a much wider public spotlight on this corporate power grab while there is still time to fight it. Let's hope so: some of the world's most powerful corporations have realized that ISDR allows them to override national laws by invoking a newly-invented right to expected future profits, and are pushing hard to enshrine that "right" in all the main trade agreements -- TPP, CETA and now TAFTA/TTIP. If they succeed, it will undoubtedly become a standard part of every new FTA thereafter, and practically impossible to eradicate in the future.

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Filed Under: investor state disputes, public awareness, tafta, tpp