Investor State Dispute Settlement (ISDS) Tribunals are now starting to bite what used to be known as the first world, in the rear. Recently the threat of an Investor Suit in the World Trade court instigated Congress to rescind point of origin labeling laws. And another lawsuit was filed even more recently seeking damages for a ruling that the Keystone XL pipeline was too great a risk to the US water supply to be built. [see Washington Post: "TransCanada is suing the U.S. over Obama’s rejection of the Keystone XL pipeline. The U.S. might lose."]
Consequently, the Investor Class is fighting back with a vigorous defense of the tribunals. For example Oliver Wieck, writing in the Atlantic Community website states:
"On the basis of bilateral investment treaties, companies with activities abroad have the right to legal protection in many countries, a well proven tool against undue state interference. Rather throwing this protection out because of critiques that focus on exaggerated compensation numbers and undecided fringe cases, the present discussion on TTIP provides the opportunity to address concerns and to improve the framework of investment protection." [Atlantic]
The authors of its history note that ISDS "began to be discussed in the mid-50s because it was necessary to support the emerging international trade. The colonial powers and powerful/wealthy interests of the time were afraid that without binding treaties to "enforce arbitral awards across borders." ISDS courts were thus part of bilateral Investment treaties between European and Colonial powers and their former colonies.
This system was enshrined in a convention in 1958:
"New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards of 1958." [history/]
And Germany was one of the first countries to sign such an agreement:
"Germany [was] the first state to sign the first BIT, with Pakistan, in 1959. Other states quickly followed this effort: Switzerland in 1961, the Netherlands in 1963, Italy in 1964 and Sweden in 1965. BITs in this period were generally quite short – approximately five to six pages. These BITs focus on core protection such as the obligation to accord non-discriminatory and fair and equitable treatment to foreign investors." [History]
Western Countries were all for ISDS as long as it was a tool to protect them from third world countries. But as Hannah Arendt points out in her "Origins of Totalitarianism" what is done to colonies usually comes back to bite the colonials.
Olivar Wieck concedes that :
"the investor-state dispute settlement system is a "shadow justice" system beyond established state courts of law." when he notes that "indeed it is true that awards are only published if agreed by both parties" [Atlantic]
And deconstructing the defenses of the treaty by reading carefully, one sees that even the defenders of ISDS seem to be conscious they are defending an ugly and tyrannical regime of tribunals.
Undermining Democratic Government
Wieck also notes:
"A main concern is that arbitration proceedings undermine democratic structures and that these proceedings might infringe the "right to regulate" of sovereign states. It is said that investment protection via arbitration might have a negative impact on the capacity of states to introduce new laws if it is running the risk of being sued for damages worth billions. In this context, critics cite spectacular legal actions such as the claim by a Hong Kong affiliate of the Philip Morris tobacco company against the Commonwealth of Australia." [Atlantic]
He tries to minimize his example, but as we've seen with point of origin laws, even in originally colonial power states like the United States, these treaties are having exactly that effect on the countries that sign them. And with the Keystone XL lawsuit, this goes from being a theoretical risk to a threat.
This post is a follow on to ones I've done on the subject since 2013.
- Previous Posts:
- March 26 2015:TPP and it's assault on sovereignty and common people
- May 17 2015: Why Opposition to the Trans Pacific Partnership "Trade Promotion Authority" is warranted
- Sunday, May 24, 2015How the Defenders of the Trans Pacific Partnership have me supporting Warren
- September 17 2013:Move On Fast Track petition
- These are modern pirates!!! Tribunals, Admiralty Courts, Privateers versus Common Pirates
- Sources and Further Reading:
- History: http://isdsblog.com/tag/history/
- Washington Post: "TransCanada is suing the U.S. over Obama’s rejection of the Keystone XL pipeline. The U.S. might lose."
I didn't want to blog too roughly on TPP until I had all the information. But at this point the verdict is in.
The whole system needs reform!!!