Monday, February 08, 2016

ISDS : Investor-State Dispute Scam

A German documentary on the investor rights in trade agreements - ISDS - now with English subtitles : "Corporations Complain - We Pay".

Canada and Canadian ISDS losses - described as the "gold rush in the ISDS industry" - figure prominently in the film :
"Canada is the only western country that has ever accepted ISDS with the United States. We're actually one of the most sued countries, always by US companies, because we signed one treaty that allowed ISDS with the United States.
And ultimately it only exists because at some point everyone expects the public will have to pay." 
In 1989 not a single lawsuit was filed; by the end of 2014 there were over 600:
"It's a new way to access public money."
The film traces the story of the two Nova Scotia lobster fishermen who fought for five years and successfully turned back US corp Bilcon's bid to build a basalt quarry on environmental grounds, only to have the ISDS tribune rule against them. Bilcon sued for US $300M over future financial loss on a quarry they hadn't even started building. As lobsterman Kemp Stanton remarks :
"If you can make US$300 million and not have to build the quarry, it'd be stupid to build it."    
And because ISDS litigation costs US$4-8 million, New York lawyer Selvyn Siedel brokers deals between "those who want to sue and those who want to invest in such litigation - litigation funders". A whole new industry model with returns of $20M of taxpayer money on an initial $5M investment. US litigation financiers have seen their own profits rise 900% by fuelling more corporations to launch more cases against sovereign governments over domestic policies :
"The litigation funders are the ones greasing the wheels of this system" 
as they did against the easy pickings of Spain and Greece during their financial insolvencies, using shell companies in Luxembourg, phantom mailbox companies with no employees, to sue their own governments for lost profits. 

In Germany, the government of Hamburg gave in to a German corp suing them for $1B through a New York company rather than face the loaded odds of an ISDS tribunal. Liberal Marc Lalonde was president of that ISDS tribunal, working alongside US Republican Larry Craig.

Sylvan Seidel in New York sees a new business opportunity in these lawsuits - bundle them as investment stocks :
"Banks, hedge funds and insurance companies are investing in this growing market. It's like a casino and the party for litigation funders is not over yet. As this grows, more corporations launch cases against governments."

CETA, TPP, TTIP - they're all trojan horse casinos designed to enable the arbitration industry to change laws in sovereign states while bleeding the public purse. 

Good doc.  h/t Murray Dobbin who circulated the link to it last night.

The Osgood Hall law prof featured in the doc wrote a Tyee column last month on the TPP :
Gus Van Harten : Seven Ways TPP Favours Mega-rich Foreign Investors, Not Canadians


The Mound of Sound said...

Thanks for this post, Alison.

Anonymous said...

Investor state arbitration is a nice little run around actual legal institutions.

Been following its nefarious deeds for a while now. I often wonder about if Mulroney's negotiators had read over their work on NAFTA ,would the Canadian forestry sector not be inundated with trade disputes. I mean who would've thunk it that most of the industry relied on Crown land and would - from the outside - appear to offer an unfair subsidy.

There's been at least two recent investor-state actions in Nova Scotia in the past little while. One involving a pulp mill in Cape Breton that has received taxpayer money to stay open, and has been getting raw product from New Brunswick, a mix of Crown and Irving land. Sued for $200 million which is close to what the taxpayers have put in.

Another additional taxpayer bilk in Nova Scotia is Exxon's unilateral push for an extra $100 million from $40 million in a royalty refund based on their own projections not factoring in a lower CDN$ to pay for the decomissioning of its offshore gas terminal and wells. Bit rich.

Hugh said...

Claimed benefits of TILMA, a 2006 deal between BC and Alberta, which has ISDS:

$4.8 billion in GDP,78,000 new jobs in BC. Hasn't happened.

Claimed benefits of CETA, between Canada and EU, also with ISDS:

$12 billion GDP, 80,000 new Canadian jobs.

I see a pattern here.

Hugh said...

I think I'll plan a power plant which burns old tires, to be situated near a major Canadian city. When it gets rejected, I'll sue for $10 million, under ISDS. Yeah, that's it.

Alison said...

Been looking at Canadian adjudicators in ISDS cases - particularly those chosen by corps to represent them. At least one has pushed for ISDS to be included in all trade agreements.

Anonymous said...

Yes there's a clear line between the lobbyists advocating for the inclusion of ISDS and their follow-up involvement in adjudicating ISDS cases.

Love (or hate) how these trade agreements are now being written and designed outside of the Public's legal system. It seems a bit of a precarious situation though, as the europeans try to push back against these provisions in trade agreements. What gets me is the concerted effort to allow for suing the public purse ad infinitum for future lost profits while also getting unfair and unequal treatment when it comes to the watered-down regulatory infractions, tort damages and many other loopholes that allow actual damages from being levied against them (bankruptcy, havens,PO boxes,etc.)

Something's gotta give.

Hugh said...

Hugh said...

Over 3 million Europeans have signed a petition opposing TTIP and CETA, both of which have ISDS:

Hugh said...

Hugh said...

"Trump declared that the North American Free Trade Agreement is "a disaster" and that he would renegotiate it if he's elected president. He also opposes the Trans-Pacific Partnership, the Barack Obama-led deal with Pacific Rim countries"

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