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Power Grab: “Investor-State Dispute Settlements” Are the Worst Thing You’ve Never Heard Of

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In an interesting and humorous take on the bevy of secret, international trade agreements currently being negotiated, Rabble writer Scott Vrooman details some of the ways the deals could be used to make countries “second class citizens.”  

Vrooman goes into detail about a mechanism included in all three agreements (TTIP, TTP, CETA) known as “investor-state dispute settlements” — or ISDS’s — which effectively allow corporations to sue governments who reduce their profit margins.  The rise of these ISDS’s could take the already harmful concept of ‘corporate personhood’ to a new level of corporate superhumanism in which corporations are above the law and answer to no sovereign government.  From Vrooman’s piece:

Think of ISDS as an insurance policy that protects companies from catastrophes like floods of democracy.

To demonstrate exactly how messed up ISDS is, take the case of Philip Morris v. Australia. The company is suing the government for requiring cigarettes to be sold in plain packaging. If they win, that means brands legally trump votes. From there it’s a short, slippery slope to Emperor For Life Crunch.

Philip Morris tried to challenge these regulations in an Australian court and lost. But ISDS lets companies bypass domestic courts (notoriously biased towards laws and constitutions) and effectively turns a country’s justice system into the referee at a Harlem Globetrotters game.

The original aim of ISDS was to shield companies if a country seized their assets, like factories. But they’ve mutated into redefining regulations as theft. So now ISDS is used as a shield in the same sense that you use brass knuckles to shield your knuckles.

• Energy company Vattenfall is suing Germany for $5 billion after the government decided to phase out nuclear energy.
• Eli Lilly is suing Canada for $500 million for refusing to grant it a couple of drug patents, and oil and gas company Lone Pine is suing them for $250 million for Quebec’s fracking ban.
• Pacific Rim is suing El Salvador for $315 million for stopping a gold mine that threatened to contaminate water supplies.
• The Veolia group is suing Egypt for $110 million for increasing the minimum wage.
• Occidental Petroleum won a $1.8 billion settlement from Ecuador because they cancelled a contract Occidental breached.
• The Renco Group is suing Peru for $800 million for shutting down their metal smelter — among the most polluted sites in the world — and wants Peru to pay any damages due to 700 children poisoned by it.

Since 2000 the total number of ISDS cases has increased from 50 to over 500. It’s a growth industry created and fueled by corporate lawyers who help write the agreements, then use those same agreements to sue governments. They’ve basically designed their own Wheel of Fortune for their corporate clients to spin, and host the game like a soulless Pat Sajak (i.e. Pat Sajak).

Courthouses? Forget about it. Try tribunals where corporations have a 99% win percentage.  Vrooman, a comedy writer by trade, explains this scenario in his native tongue:

Instead of slumming it in seedy courthouses, ISDS cases are presented before a posh, exclusive tribunal of three high-paid lawyers. And if citizens affected by the decisions try to testify or appeal, the bouncer will inform them they’re not on the list (but then let in like three hot corporations who say they know the DJ, which is such bullshit).

One tribunal judge said:

“When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all.”

And then he shrugs and goes back to sleep on his gold-plated, Evian-filled waterbed, which he can afford with his $400 -$700 per hour wage. And at those rates, they have every incentive to drag cases out. For $700 per hour, a professional human centipedist would be begging for overtime. Unfortunately though, The United Human Centipede Workers union is suffering from historically low wages after many failed attempts at sit-down strikes.

Often just the threat of lawsuits is enough to make countries change course. A former Canadian government official had this to say about the effects of ISDS in NAFTA:

“I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation and proposition in the last five years. They involved dry-cleaning chemicals, pharmaceuticals, pesticides, patent law. Virtually all of the new initiatives were targeted and most of them never saw the light of day.”

To be fair, one of those environmental regulations was the infamous “Stand Your Soil” law that would have made it legal for trees to fire a gun in self-defense. Probably dodged a few literal bullets on that one.

Using humor as his weapon, Vrooman echoes the concerns of progressives and labor leaders everywhere; that these trade agreements could easily destroy a century of human progress in one fell swoop and allow corporations to trample freely on democracy at the expense of human rights.  

Below are links to online resources regarding these trade agreements.

WikiLeaks Trans Pacific Partnership page
Public citizen TPP
Washington Post WonkBlog’s “Everything You Need To Know About the TPP”
The Guardian “The TTIP deal hands British sovereignty to multinationals”
European Free Alliance’s TTIP page


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