Skip to main content

Lobby-occupied bureaucrats attempt to bypass the enormous popular opposition against ISDS

ISDS [investor-state dispute settlement system], is included in thousands of international agreements. It allows companies to sue governments if policy changes – even ones to protect public health or the environment – are deemed to affect their profits. These lawsuits bypass domestic courts and take place before an international tribunal of arbitrators, three private lawyers who decide whether private profits or public interests are more important. Across the world, investor-state tribunals have granted big business billions of dollars from taxpayers’ pockets – often in compensation for public interest measures.


When the European Commission proposed to include this powerful legal regime for corporations in the trade deal under negotiation with the United States, the Transatlantic Trade and Investment Partnership TTIP, this triggered massive opposition: over 97% of a record 150,000 participants rejected such corporate privileges in a public consultation. Criticism also mounted in EU member states and the European Parliament. ‘ISDS’ has become “the most toxic acronym in Europe”, according to EU trade chief Cecilia Malmström.

In an attempt to get around the enormous opposition generated by ISDS, the European Commission chose a different label when, in autumn 2015, it released a revised proposal for all the EU’s ongoing and future investment negotiations, including TTIP. Instead of the ‘old’ ISDS system, the Commission promised a ‘new’ and allegedly independent system, supposed to protect governments’ right to regulate: the Investment Court System or ICS.

The analysis in this report shows that the proposed ICS does not put an end to ISDS. Quite the opposite, it would empower thousands of companies to circumvent national legal systems and sue governments in parallel tribunals if laws and regulations undercut their ability to make money. It would pave the way for billions in taxpayer money being paid out to big business. It could curtail desirable policymaking to protect people and the planet. And it threatens to lock EU member states forever into the injustices of the ISDS regime.

Key findings:

  • The number of investor-state cases, as well as the sum of money involved, has skyrocketed over the last two decades from a total of three known treaty cases in 1995 to nearly 700 known investor-state claims by January 2016 and an absolute record high of 70 new investor lawsuits filed in 2015 alone. The amount of money has also expanded dramatically, with a compensation award against a country reaching the staggering sum of US$50 billion in one case. The main financial beneficiaries have been large corporations and rich individuals.

  • The last two decades have seen billion-dollar investor lawsuits against the alleged damage to corporate profit of legislation and government measures in the public interest. Countries on every continent have been challenged for anti-smoking legislation, bans on toxic chemicals, anti-discrimination policies, financial stability measures, restrictions on dirty mining projects, and more. For example, 60% of the claims against EU member states concerned the environment. A lawyer defending countries in these cases has called their legal base, international investment agreements, “weapons of legal destruction”.

  • The EU’s ‘new’ ISDS model (re-labelled ICS) is as dangerous for democracy, public interest law, and public money as the ‘old’ model enshrined in the EU-Canada trade agreement CETA. With the exception of some procedural improvements – an enhanced selection process for arbitrators, stronger ethics rules, and the establishment of an appellate body – the rebranded version essentially contains the same investor privileges, often in wording identical to the CETA text.

  • Investor claims against non-discriminatory and lawful measures to protect health, the environment, and other public interests would be possible under the new EU proposal as it includes the same far-reaching investor rights relied upon by companies like Philip Morris (suing Uruguay over tobacco control measures) and TransCanada (which has announced it will sue the US for US$15 billion over the rejection of the controversial Keystone XL oil pipeline).

  • Under the EU proposal, billions in taxpayers’ money could be paid to corporations, including for future lost profits that they hypothetically could have earned (like in one case against Libya which was ordered to pay US$905 million to a company which had only invested US$5 million). Countries could also be ordered to pay compensation for new laws and regulations in the public interest. The EU’s proposed formulations on the protection of the right to regulate would not shield governments from these potentially crippling costs.

  • The EU proposal increases the risk of costly lawsuits against public interest measures as it arguably grants investors even more rights than many existing investment treaties, which have already led to hundreds of investor-state lawsuits around the world:
      a) By protecting investors’ “legitimate expectations” under the so-called “fair and equitable treatment” clause, the EU risks codifying a very expansive interpretation of the clause that would create the ‘right’ to a stable regulatory environment. This would give investors a powerful weapon to fight regulatory changes, even if implemented in light of new knowledge and democratic choice.
      b) The type of dangerous umbrella clause proposed by the EU would lift all written contracts of a state with regards to an investment to the level of international law, multiplying the risk of costly lawsuits. The clause is not part of the CETA between the EU and Canada, presumably because Canada rejected it as too risky.

  • If the US-EU trade agreement TTIP included the proposed investor rights, liability and financial risks would multiply for EU member states and far exceed those posed by any existing treaty signed by them: under TTIP, 19 more EU countries could directly be sued by US investors (compared to only 9 with an investment treaty with the US today); TTIP would cover 99 per cent more US-based investment in the EU (up from only 1 per cent under existing treaties); and more than 47,000 companies would be newly empowered to sue (compared to around 4,500 today). TTIP could invite the launch of nearly 900 US investor lawsuits against EU member states (compared to 9 claims under existing treaties).

  • Under the EU proposal, transnational companies could even sue their own governments – by structuring their investment through a subsidiary abroad or asking an abroad shareholder to sue. In the context of TTIP, this danger is particularly real given the US$3.5 trillion worth of US-held securities in the EU. There is hardly a ‘European’ company that does not have a ‘US’ investor who would have standing to bring a TTIP claim against the EU or its member states.

  • The EU’s investor rights proposal is a sure-fire way to bully decision-makers, potentially curtailing desirable policymaking. There is already evidence that proposed environmental and health protections have been abandoned, delayed or otherwise adapted to corporate wishes because of expensive claims or the threat of litigation. Canada and New Zealand, for example, have delayed anti-smoking policies because of looming investor lawsuits from Big Tobacco.

  • The dispute settlement process proposed by the EU is not judicially independent, but has a built-in, pro-investor bias. Since only investors can sue, there is an incentive for the arbitrators (re-labelled ‘judges’ in the EU proposal) to side with them as this will bring more lawsuits, fees, and prestige in the future. Restrictive selection criteria, the lack of cooling off periods and loopholes in the proposed ethics code for the arbitrators also give rise to concerns that tribunals will be staffed with the same private lawyers who have until now driven the boom in investment arbitration and grown their own business – by encouraging investors to sue and by interpreting investment law expansively to encourage more claims.

  • There are serious doubts about whether the investor rights proposal is compatible with EU law, one reason for growing concerns amongst judges. The Commission’s proposal sidelines European courts and is fundamentally discriminatory, granting special rights to foreign investors only. They could challenge court rulings as well as actions by governments and laws passed by Parliament, from the local to the European level.

  • Rather than putting an end to ISDS, the EU’s investment protection agenda threatens to lock EU members into ISDS forever. It will be practically impossible for them to exit from the investor privileges once those are enshrined in larger trade deals such as TTIP or CETA (because they would effectively have to leave the EU). The Commission’s proposed multilateral investment court – essentially a world supreme court exclusively available to corporations – risks perpetuating an already gravely unjust system where one side, typically large companies or wealthy individuals, get exceptionally powerful and actionable rights while the other side, the people of a country, get only responsibilities.

Full Report:

Comments

Popular posts from this blog

WikiLeaks paper reveals Congressional think tank specific techniques for 'persuading' audiences

This document was obtained by WikiLeaks from the United States Congressional Research Service. The CRS is a Congressional "think tank" with a staff of around 700. Reports are commissioned by members of Congress on topics relevant to current political events. Despite CRS costs to the tax payer of over $100M a year, its electronic archives are, as a matter of policy, not made available to the public. Individual members of Congress will release specific CRS reports if they believe it to assist them politically, but CRS archives as a whole are firewalled from public access. This report was obtained by WikiLeaks staff from CRS computers accessible only from Congressional offices.
globinfo freexchange
A report from April 12, 2007, was "Prepared primarily for congressional staff members called upon to help prepare speeches for Members,” and “provides basic guidance on obtaining speech material, using it to prepare a speech draft, and presentation.”, as we read in the abstract. …

Mystery solved: here's why the Western mainstream media suddenly 'discovered' the war in Yemen

globinfo freexchange
Why it took so long for the Western mainstream media to 'discover' the war in Yemen and the war crimes committed by the Saudi coalition in full co-operation with the US?
One might think that the humanitarian disaster there - caused also by the blockade of goods for the relief of the civilians - has become so obvious, condemned multiple times by the UN, that the media finally forced to speak about it.
In previous article we attempted to explain the 'unexplained phenomenon' and the fact that CNN surprisingly returned to the issue to openly condemn the US support to the Saudi coalition atrocities against civilians in Yemen.
Yet, despite that the Saudi regimes have been, traditionally, the best allies of the Western neocolonialists, this time, the US had serious reasons to overthrow the Saudi crown prince Mohammed bin Salman (MBS). And, surprisingly enough, at the center of this underground conflict lies an attempt by the US to privatize Aramco, Saudi Arab…

The Snowden files: NSA's plans for a hundred percent coverage of every square inch of the planet

NSA wants to take its battlefield targeting alert system that they used to kill people in Iraq and in other war zones and implement it globally, so that they can target anybody anywhere.
globinfo freexchange
Suzie Dawson, asylum-seeking journalist and current President of the Internet Party of New Zealand, is being targeted by New Zealand intelligence agencies as a result of her activism in the Occupy movement and against the TPP, among other causes.
Dawson spoke with Jimmy Dore and made some astonishing revelations coming from Edward Snowden that were very little known. Here are the most impressive:
According to the NSA, it takes a whole village for them to spy on the UN. That's a direct quote they worked with the State Department and the CIA to spy on and monitor and infiltrate the United Nations.
The NSA was literally planning a system of global control. They refer to it in their documents as the global network and they want that spying network to cover the entire globe. They actua…

Recent US elections confirmed that progressives will have to fight two monsters at once: Donald Trump and corporate Democrats

failed evolution
Nancy Pelosi's speech after Democrats took the House in recent US elections was not just a huge disappointment. Many progressives became furious about her empty speech, which was full of the most obsolete political generalities and cliches.
But it was not just that Pelosi didn't want to committ that Democrats will fight for specific issues - in favor of the vast majority of Americans - that returned in the political debate by Bernie Sanders and the progressive movement.
She actually 'gave the finger' to the progressives straight and clear.
If you don't believe it, just check her own words: “... we will strive for bipartisanship. [...] we have a bipartisan marketplace of ideas that makes our democracy strong ...
Translation: ‘We will do business as usual. The bipartisan dictatorship will remain strong and under the control of the plutocratic elite. Nothing will change, don't bother.
That's all you need to know.
Here is another evidence that the c…

The establishment apparatus fabricates another poll to 'adjust' popular preference in favor of Joe Biden, against Bernie Sanders

globinfo freexchange
In late August, we identified an effort by Politico (rather sloppy), to present Joe Biden as the most suitable leader for the Democratic party, based on the fact that he could beat Donald Trump.
The sloppiness of the effort was proved by the way in which Biden was promoted against Bernie Sanders, despite that the latest was beating Trump with the same percentage, according to Politico's poll.
It was CNN that came now with another poll to contribute to this pro-Biden operation and actually verify the title of our article back then. That is, corporate Democrats will promote Joe Biden against Bernie Sanders. Indeed, as usatoday reports:
           Former Vice President Joe Biden holds a wide lead over the other potential candidates to challenge President Donald Trump in 2020, a CNN survey found. About a third of respondents named Biden as their choice to carry the Democratic banner in the next presidential election (33 percent), while Vermont Sen. Bernie Sanders cam…

Liberal plutocrats preparing ground to wipe out progressives and directly take over the Democratic party in US

globinfo freexchange
Through his own humorous style, comedian Lee Camp pointed out something quite serious. As he explained, Facebook's founder and CEO, Mark Zuckerberg, fulfilled all the conditions necessary to run for president of the United States.
One key condition is certain and obvious: tons of money.
Another one, is to pretend to be religious. And this condition is, of course, particularly important in the America of Donald Trump. Indeed, as Camp says, the former Atheist Mark Zuckerberg has suddenly found religion.
And the most recent fulfilled condition by Facebook's boss, was to secure the alliance with the US deep state.
Indeed, on October 11, Facebook announced the removal of 559 pages and 251 accounts from its service, accusing the account holders of “spam and coordinated inauthentic behavior.” The primary thread connecting victims of the purge seems to be that they are critics and/or opponents of the American political “mainstream” or “establishment.”
Also, as Ben Nort…

Major cheerleader of the Iraq war says entire Arab world is completely dysfunctional!

globinfo freexchange
           I got news for you. The entire Arab world is dysfunctional right now. Completely dysfunctional. And I think it has the potential to be a giant Yemen. A giant human disaster area.
Guess who said that, and most importantly, why he said it:

For a moment we thought that a miracle was about to happen. We thought that Thomas Friedman would become one of the few exceptions that would declare regret for supporting the Iraq war, in a self-criticism short 'crisis'. You know, the war that was based on big lies and opened Pandora's box for the Middle East chaos. But no. It was too good to be true.
As Ben Norton of the Real News explains:
For the past two years, many leading pundits have been portraying Mohammed bin Salman (MBS) as essentially the savior of the Middle East, if not of the world. Thomas Friedman is probably the most egregious example. But Thomas Friedman is a powerful New York Times columnist, a so-called expert on the Middle East. And he, of c…

George Soros tried to get rid of Yanis Varoufakis because the neoliberal regime could not handle Greece and Ukraine simultaneously

globinfo freexchange
In a recent interview at the Greek channel, Crete TV, the former Greek Minister of Finance, Yanis Varoufakis, made some interesting revelations. Among other things, he actually confirmed what the blog thought until now to be an exaggerated far-right conspiracy theory. He essentially confirmed that George Soros intervenes directly to political leaderships, substituting political institutions in Europe and elsewhere.
Varoufakis said that, on June, 2015, George Soros tried to contact Alexis Tsipras via his own ‘channels’. In the interview, Varoufakis claims that he had no idea what Soros wanted to talk about.
As Varoufakis also writes in his book Adults in the Room: My Battle with Europe's Deep Establishment, for years he has been falsely portrayed by the pro-troika establishment and the anti-Semitic Right as Soros’s stooge in Greece.
Yet, Soros’s message to the Greek prime minister, Alexis Tsipras, came as a perverse vindication. ‘Fire Varoufakis! Europe cannot affo…

New poll gives evidence that the establishment upgrades the identity-politics weapon to crush Bernie Sanders and his progressive movement

globinfo freexchange
Another suspicious poll came out to promote various establishment options against Bernie Sanders. As the Hill reports:
President Trump trails Michelle Obama, Oprah and Sen. Kamala Harris (D-Calif.) by double digits in potential 2020 presidential races, according to a new poll.
Trump also trails several other female candidates in potential races, although by slimmer margins, the Axios poll conducted by SurveyMonkey found.
The poll shows Trump trailing by 13 points to Obama among registered voters polled, by 12 points to Oprah and by 10 points to Harris. He's also down by 9 point to Sen. Amy Klobuchar (D-Minn.) among registered voters surveyed, by 6 points to Sen. Kirsten Gillibrand (D-N.Y.) and by 5 points to his 2016 opponent, Hillary Clinton.
The closest race would be between Trump and Sen. Elizabeth Warren (D-Mass.), the poll found. Warren has a 2-point lead among registered voters, according to the poll.
The poll includ…

The real reason the knives are out for Mohammed bin Salman

In the six weeks before Khashoggi’s disappearance, MBS not only managed to anger the U.S. military-industrial complex but the world’s most powerful bankers.
by Whitney Webb
Part 4 - Trouble in neoliberal paradise
While it is impossible to know MBS’ exact reason for getting cold feet in his once-ambitious plans to privatize the kingdom, we can guess. Indeed, there is a reason that MBS’ elders in the Saudi Royal family have long rejected neoliberal reforms and the mass privatization of their economy.
A 2016 report from Foreign Policy succinctly states why past Saudi Royals have avoided “free-market reforms” as the older generations of the House of Saud “understand the fragility of a monarchy whose brittle pillars rest on the quiescence of conservative clerics and a merchant class hostile to the free-market reforms that will undercut their privileges.” However, far more Saudis than just the “merchant class” have grown accustomed to the largesse of the Saudi state, as the majority of Saudi c…