Academic argues ISDS ruling against Pakistan shows global economic governance model is broken
July 24, 2019: Canadian academic Kyla Tienhaara argues in an article in the Conversation that a recent ISDS ruling, which ordered Pakistan to pay US$5.8 billion to mining company Tethyan Copper, is a sign that the global economic governance model is broken.
The ISDS case was launched after a provincial government backtracked on a deal with the mining company to develop a copper-gold mine, which it was allegedly the result of corruption. Tienhaara argues that, irrespective of the merits of the case, the tribunal’s decision to award Tethyan Copper US$5.8 billion reflects a failure in the ISDS system. The award amounts to more than 25 times the amount the company invested in the project and includes an unknown payout for ‘lost future profits.’
To add insult to injury, the ruling comes less than two weeks after Pakistan accepted a US$6 billion loan from the International Monetary Fund, which included strict conditions that have forced the government to impose severe austerity measures.