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ISDS Expansion
Even at a time when the ugly reality of ISDS can no longer be ignored, corporations are pushing to expand the system further. Expanding and locking in this extreme corporate power grab would vastly increase the chances of more laws being attacked and more taxpayer money being grabbed by corporations. Mega-trade and investment pacts on the horizon would expand the extreme corporate rights delivered by the ISDS system — unless We the People organize to stop them.
Multinational corporations seek to maintain and deepen the threats of ISDS in the context of the North America Free Trade Agreement (NAFTA) renegotiations among the United States, Canada and Mexico. Already, $392 million of taxpayer money has been paid out, with more than $36 billion pending. We must organize to oppose any renegotiated NAFTA that maintains the toxic ISDS system.
The proposed Transatlantic Trade and Investment Partnership (TTIP) is an even greater threat of ISDS expansion. If completed and approved, it would newly empower more than 81,000 corporations and subsidiaries from the United States and European Union to launch ISDS attacks. Thanks to the massive opposition to ISDS in Europe, the TTIP talks stalled and have been put on hold, but powerful interests are pushing to resurrect them.
If ISDS-expansion pacts like the TTIP were to go into effect, the recent horrendous examples of ISDS corporate attacks against our public health, safety and environmental laws would be just the tip of the iceberg. Specialized corporate law firms are gearing up to take advantage of this potential bonanza of tens of thousands of new opportunities to raid public treasuries.
See the expanded ISDS threat that the TTIP would bring to each U.S. state with this interactive map, which also shows what the ISDS threat of the TPP would have been.
The good news is that a major ISDS threat was averted when trade activists around the world succeeded in stopping the Trans-Pacific Partnership (TPP). The inclusion of ISDS in the deal was one of the primary factors motivating the thousands of diverse organizations representing working people united across borders.
Thanks to their work, the TPP never received sufficient support in the U.S. Congress to be ratified. The TPP would have newly empowered more than 75,000 corporations and subsidiaries to launch ISDS corporate attacks against public interest laws.
Across the political spectrum, experts are now criticizing ISDS, and more governments are pulling out of treaties that include these extreme corporate rights and writing new treaty models that exclude ISDS. ISDS supporters are on the defensive, desperately trying to regroup to salvage the system through various “reform” proposals.
People power derailed the Trans-Pacific Partnership (TPP), which would have massively expanded ISDS.
Thanks to years of campaigning by people, the agreement could not garner a majority of support in the U.S. Congress. Watch U.S. Senator Elizabeth Warren explain the growing opposition to ISDS in the United States and around the world that led to the TPP’s demise.
5 Facts You Need to Know about ISDS
1
Investor-State Dispute Settlement (ISDS) fundamentally shifts the balance of power between corporations and countries. ISDS grants corporations the power to sue governments over the laws we rely on — and has been used to attack tobacco, climate, financial stability, mining, medicine, energy, pollution, water, labor, toxins and development policies, among others.
2
ISDS circumvents domestic courts. The cases are decided by panels composed of three corporate lawyers, some of whom rotate between serving as “judges” and bringing cases against governments. The corporate lawyers are paid by the hour and are unaccountable to any court system or electorate.
3
The number of ISDS cases has exploded in recent years as corporations and specialized corporate law firms have awakened to the profitability of the investor-state system. While only 50 cases were brought in the first three decades of the system’s existence, more than 50 cases have been launched each year during the past five years.
4
If a corporation wins, there is no limit to the amount of taxpayer money that governments can be ordered to pay, and there is no outside appeal. The corporate lawyers can even order a government to pay a corporation for loss of expected future profits — what a corporations claims it would have earned if the domestic law was never enacted.
5
Under U.S. trade and investment pacts alone, corporations have already won nearly $3 billion in taxpayer money, with $70 billion still pending in claims, all of which relate to environmental, energy, financial regulation, public health, land use and/or transportation policies.
Even within developed countries that supported ISDS in the past, massive citizen opposition has forced ISDS into the public debate. The word “controversial” is now firmly attached to ISDS whenever it is mentioned and many government officials are now joining the opposition or are on the defensive, scrambling to make so-called “reforms” to the system.
U.S. Senators
Twelve U.S. Senators in letter to President Obama, September 2016
“ISDS challenges, and even mere threats of ISDS challenges, have been used to secure extractive permits over community objections, to get executives out of criminal convictions, and to exonerate managers connected to a factory’s lead poisoning of children. Such a corporate handout does not belong in our trade agreements.”
U.S. National Conference of State Legislatures (NCSL)
Bipartisan association representing U.S. state legislatures
“NCSL will not support any bilateral investment treaty or free trade agreement that provides for investor/state dispute resolution. NCSL firmly believes that when a state adopts a non-discriminatory law or regulation intended to serve a public purpose, it shall not constitute a violation of an investment agreement or treaty, even if the change in the legal environment thwarts the foreign investors’ previous expectations.”
European Commission
Cecilia Malmstrom, European Union’s Trade Commissioner, admitted in September 2015
“ISDS is the most toxic acronym in Europe.”
French Senate
Passed unanimous resolution against inclusion of ISDS in trade agreements with Canada and the United States, February 9, 2015
“The Senate … urges the Government to ensure the principle of democracy in any proposed investment protection agreement and systematically refuse to insert an investor-state dispute settlement mechanism.”
Resolutions opposing ISDS were also passed in Dutch and Austrian parliaments in 2014.
Public Citizen's Global Trade Watch
Keystone XL crude oil pipeline
Case reopened
Coal-fired electric plant/climate change
Case settled (environmental protections rolled back)
Fracking
Case pending
Ban of toxic fuel additive
Case settled (investor received $13 million, ban reversed)
Medicine patents
Case dismissed
Nuclear energy
Case pending
Oil concession
Investor win (awarded $2.3 billion; reduced to $1.4 billion after partial annulment)
Research and development
Investor win (awarded $13.2 million plus interest, additional claims pending)0
Too-big-to-fail
Investor win (awarded $236 million)
Emergency stability measures
Investor win (awarded $133 million plus interest)
Insurance privatization
Case settled (investor received $1.6 billion)
Water
Investor win (awarded $165 million plus interest)
Transportation
Investor win (awarded $18.6 million)
Electricity
Case settled (investor received $26.5 million)
Amazonian oil pollution
Case pending
Metal smelter pollution
Case pending
Toxic waste
Investor win (awarded $16.2 million)
Toxic waste
Investor win (awarded $5.6 million)
Toxic waste
Investor win (awarded $40 million plus interest)
Quarry Mining
Investor win (award amount pending)
Gold Mining
Case pending