Investor-State Dispute Settlement (ISDS)

ISDS allows foreign investors to sue our Government

Investor-State Dispute Settlement (ISDS): corporate power vs the public interest

An unbalanced and unfair system

All trade agreements have state-to-state dispute processes. ISDS is only included in some trade agreements and gives special rights to foreign investors (that are not available to local investors) to bypass national courts and sue governments for millions of dollars if they can claim that a change in law or policy will harm their future profits. ISDS has been included in some trade and investment agreements. All such agreements have government-to-government dispute systems, but not all have ISDS. 

ISDS  is a fundamentally unbalanced system that gives additional legal rights to global corporations that already have enormous market power. Strong community opposition has kept it out of World Trade Organisation agreements, and of recent agreements like the Regional comprehensive Economic Partnership (RCEP), the Australia-UK Free Trade Agreement and the Australia-EU Free Trade Agreement. 

ISDS tribunals consist of investment lawyers who can continue to be practicing lawyers, with obvious conflicts of interest. Australia’s High Court Chief Justice and other legal experts have said that ISDS is not a fair legal system because it has no independent judges, no precedents and no appeals. There are  1303 known cases, many against health, environment, regulation of carbon emissions and other public interest laws.

 

Mexico sued for billions after rejecting marine mine due to environmental concerns

12 February, 2024: As reported by the Guardian, Mexico is currently facing a US$2.36 billion Investor-State Dispute Settlement (ISDS) case from US company Odyssey Marine Exploration after rejecting a seabed mining permit due to environmental concerns. The permit would have allowed Odyssey Marine Exploration to dredge nearly 270,000 hectares of shallow Mexican coastline for phosphate.

AFTINET’s submission to the general review of the CPTPP calls for removal of international investor rights to sue governments

5 February, 2024: AFTINET’s submission to the general review of the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP) calls for the removal of ISDS provisions and stronger commitments to human rights, labour rights, women’s rights, Indigenous rights and environmental standards.

International Chamber of Commerce former arbitrator says ISDS has “lost battle of public opinion” and “legitimacy”

1 February, 2024: In a lecture earlier this month Alexis Mourre, the former president of one of the Investor-State Dispute Settlement (ISDS) arbitration systems, run by the International Chamber of Commerce (ICC) said that defenders of ISDS had been “defeated” by civil society movements and “lost the battle of public opinion," and, "to a large extent, the battle of legitimacy."

Fossil fuel companies are still using the ECT to sue EU countries, despite their decision to withdraw from the treaty

4 December, 2023: Despite the EU formally proposing the collective exit of the Energy Charter Treaty in July 2023 and the withdrawal by EU countries including France, Germany and Denmark, the treaty remains in effect and fossil fuel companies are still using it to sue EU countries for

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