If you are sick of big corporations rigging the system to their benefit at the expense of people and the planet, you will be outraged by the latest corporate power grab: Investor-State Dispute Settlement (ISDS). ISDS empowers multinational corporations to sue our governments before panels of three corporate lawyers. These corporations need only convince the corporate lawyers that a U.S. law or safety regulation violates their special investor rights. The corporate lawyers can award the corporations unlimited sums to be paid by America's taxpayers, including for the loss of expected future profits the corporations claim they would have earned if the domestic law was never enacted. The corporate lawyers’ decisions are not subject to appeal and the amount they can order taxpayers to give corporations has no limit.
The ugly reality of the ISDS system can no longer be ignored. Get outraged when you learn about dozens of real-life ISDS attacks and the billions in taxpayer compensation the tribunals of corporate lawyers have ordered to be paid to corporations. Get inspired by governments and public figures who are standing up to say "No!" to this extreme system. Get engaged to stop multinational corporations' attempts to expand their power at the expense of the rest of us.
ISDS grants foreign corporations shocking new powers to attack the laws we rely on – for safe food, decent jobs, affordable medicines, a clean environment, and financial stability – and demand unlimited payments from taxpayers over such laws. ISDS elevates individual multinational corporations to the status of a government by allowing them to privately enforce a public treaty. This system empowers multinational corporations to bypass domestic courts and directly “sue” governments before three corporate lawyers sitting on special tribunals that exist outside of any domestic legal system. These corporate lawyers can award the corporations unlimited sums to be paid by taxpayers – including for the loss of expected future profits – as compensation for policies they do not like that they say violate the new corporate rights the ISDS system grants them. There is no outside appeal. If a government does not pay, the corporate lawyers can authorize a corporation to seize government property to extract the money they have ordered taxpayers to fork over.
The ISDS system gives multinational corporations even more rights and powers than local communities and domestic businesses. Among the outrageous grounds corporations can assert to demand taxpayer compensation under this system is that a change in government policy violates their new rights in a way that undermined their “expectations.” It does not matter if the change came in response to a major financial crisis or environmental catastrophe or emerging knowledge about a new health risk – or that this change applies to domestic and foreign firms alike or has been approved by the highest court in a country. Under ISDS, three corporate lawyers can still order our governments to hand over unlimited sums of taxpayer money to corporations.
Three corporate lawyers unaccountable to any electorate decide ISDS cases. Some of these lawyers rotate between judging cases and representing corporations against governments, which is a conflict of interest. Such dual roles would be deemed unethical in most legal systems. U.S. judges, for example, are forbidden from representing private clients. The lawyers on ISDS tribunals are paid by the hour, creating an incentive for cases to go on for years, even if they have no merit.
Tribunals are not bound by precedent – the three corporate lawyers can make up new interpretations of what rights and powers they think corporations have. The lawyers are also not bound by even what the governments that signed ISDS treaties think the treaties require of them. There is no outside appeal to the three corporate lawyers’ rulings.
Under ISDS, corporations alone can launch cases. The corporations have no responsibilities to governments, nor can governments sue corporations in this system. The corporations that launch ISDS cases also pick one of the lawyers who will act as a "judge." (Imagine if the plaintiff were allowed to pick the judge in a domestic court case.) This creates a perverse incentive for the panel of three corporate lawyers – formally called tribunalists – to invent sweeping rights for foreign firms and rule against governments. By helping out the multinational corporations, tribunalists can boost firms’ interest in launching more ISDS cases and in picking them for the next lucrative tribunalist gig.
The number of ISDS attacks on public interest policies has been soaring. While treaties with ISDS provisions have existed since the 1950s, just 50 known ISDS cases were launched in the regime’s first three decades combined. In contrast, corporations have launched more than 50 ISDS claims in each of the last five years. The types of policies being attacked are also expanding. Most of these cases are not about a government seizing (expropriating) a mine or factory or land. Rather, most recent ISDS attacks have targeted tobacco, climate, financial stability, mining, medicine, energy, pollution, water, labor, toxins and development policies.
If the three corporate lawyers rule against a challenged policy, there is no limit to the amount of taxpayer money that they can order a government to pay to a corporation. The amount is based on any actual damages (what the investor actually spends to establish an investment, if anything) plus the “expected future profits” that the three corporate lawyers surmise that the corporation would have earned in the absence of the public policy it is attacking. Under U.S. pacts alone, tribunals have ordered billions of dollars in taxpayer compensation to multinational firms. Tens of billions remain in pending ISDS claims just under U.S. pacts, all of which relate to environmental, energy, financial regulation, public health, land use and/or transportation policies.