The obscure legal system that lets corporations sue countries by Claire Provost and Matt Kennard, The Guardian, June 10, 2015
http://www.theguardian.com/business/2015/jun/10/obscure-legal-system-lets-corportations-sue-states-ttip-icsid Fifty years ago, an international legal system was created to protect the rights of foreign investors. Today, as companies win billions in damages, insiders say it has got dangerously out of control
“No a la mineria, Si a la vida” (No to mining, Yes to life). The Pacific Rim case has been framed in El Salvador as a test of the country’s sovereignty in the 21st century
“The ultimate question in this case,” he said, “is whether a foreign investor can force a government to change its laws to please the investor as opposed to the investor complying with the laws they find in the country.”
Most international investment treaties and free-trade deals grant foreign investors the right to activate this system, known as investor-state dispute settlement (ISDS), if they want to challenge government decisions affecting their investments. In Europe, this system has become a sticking point in negotiations over the controversial Transatlantic Trade and Investment Partnership (TTIP) deal proposed between the European Union and the US, which would massively extend its scope and power and make it harder to challenge in the future. Both France and Germany have said that they want access to investor-state dispute settlement removed from the TTIP treaty currently under discussion.
Investors have used this system not only to sue for compensation for alleged expropriation of land and factories, but also over a huge range of government measures, including environmental and social regulations, which they say infringe on their rights. Multinationals have sued to recover money they have already invested, but also for alleged lost profits and “expected future profits”. The number of suits filed against countries at the ICSID is now around 500 – and that figure is growing at an average rate of one case a week.