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‘Litigation terrorism’: the obscure tool that corporations are using against green laws | Arthur Neslen

WCan I get a hat if I cross the richest region on earth? 1%global legal system Compatible Do they have a chance to squeeze billions out of the government because of their fickle investments? The answer is “Investor-State Dispute Settlement,” or ISDS. dubbed “Litigation Terror” by Joseph Stiglitz, winner of the Nobel Prize in Economics. ISDS is a corporate court system in which a panel of unelected lawyers decides whether a company is liable for compensation when its assets are lost due to the actions of national governments.stuck”.

Hearings are often held in private and reveal ISDS documents, claims, awards, settlements, and even the nature of the case. No need to publishwithout regard to public interest considerations.

Last week, the Guardian revealed how the US-based undersea mining company Odyssey Marine Exploration Ltd. ISDS panel Mexico is suing Mexico for $2.36 billion (£1.87 billion) after the government moved to block dredging off its Pacific coast.

The company had acquired a 50-year concession to an undersea area off the coast of Baja California Sur state and was seeking permission to mine phosphate there. The area is a pristine breeding ground for giant gray whales and is also home to endangered sea turtles, octopuses, and abalone molluscs.Odyssey Said The dredging will take place in a small area and measures will be taken to help protect marine life and subsequently “regenerate” the seabed.However, deep sea phosphate mining requires risk pollution, radiation, biodiversity losssimilarly damage For coastal life and community.

When Mexico refused permission – once in 2016 and once again in 2018, the Odyssey decided to “continuously explore the ocean floor” of “a natural monument and the most important place for Mexico and the world.” The company took the matter to the ISDS Arbitration Tribunal, claiming that it was obligated to compensate for lost revenue.

According to the Transnational Institute, there are 1,383 known ISDS cases to date. These courts award the highest average damages claims and the highest average judgments of any legal system in the world.

The commission is made up of three lawyers, one appointed by the investor and one appointed by the state, with the president’s consent. Most of them are white men, business-minded investment lawyers from the northern world.

And so far, the system’s beneficiaries have been primarily investors, who have won 61% of ISDS litigation decisions between 1987 and 2017, with an average verdict of $504 million Each. Fossil fuel barons have won 72% of their lawsuits, swaying governments and winning more than $77 billion, according to the Transnational Institute.

The three panelists often serve multiple roles within an ISDS system. So-called””revolving door” and “double hat” practices allow attorneys to serve as arbitrators, presidents, or experts for both investors and states, sometimes simultaneously.

This could raise boundary issues, for example, when a lawyer represents a fossil fuel investor in an ISDS case, at the same time, or before or after.double hat” as an arbitrator (or president) in another ISDS case.

Allowing foreign investors to help form these panels creates “clear risks of bias, conflicts of interest, potential misconduct and other abuses of power,” said the UN Special Rapporteur on Human Rights and the Environment. warned David Boyd in his paper. report In October of last year.

In fact, oil companies helped shape the ISDS system, which began in the 1960s as a way to protect wealthy investors from expropriation of assets without compensation by newly independent former colonies.

Investors argue that ISDS protects investors from arbitrary, discriminatory, or unpredictable treatment in countries where there may be no independent or competent judiciary. There is. It protects their “legitimate expectations”. Regulatory certainty, proportionality and profit.

But investors and courts have also used this idea to prevent countries from taking action to address climate change, “even though action is necessary and foreseeable for decades.” The United Nations report states that

The amounts involved are skyrocketing and can be surprising. Singapore-based company Zeff Investments is suing Australia for A$300bn (£155bn) over the Australian government’s rejection of a proposed mining project. The company claims it breached free trade treaty obligations on which Australia relied. In another case, Abima Iron Ore seeks $27 billion Born in the Democratic Republic of Congo.

When faced with such claims, Boyd said, governments often “just capitulate.” Said. As a result, regulations could cool down and, as the UN’s Intergovernmental Panel on Climate Change (IPCC) notes, fossil fuel companies could “block national legislation aimed at phasing out the use of their assets.” There is sex. I got it..

new zealand retreated In 2018, existing offshore oil permits were revoked over ISDS concerns. Denmark is “incredibly expensive” claims ISDS. 2017, France diluted plan The United Nations has decided to phase out fossil fuel extraction by 2040 following the threat of an ISDS lawsuit by Canadian multinational Vermilion, according to a United Nations report. There are many other examples.

A UN report said the “fundamental contradiction” between ISDS and climate action poses “formidable obstacles” to effective and timely climate action.

And therein lies the friction. Extracting more fossil fuels will not prevent catastrophic global warming. That’s not possible with our remaining carbon budget. But by design, ISDS gives powerful oil, coal and gas companies the power to block progress until repayments are made. The estimated amount of bills that the ultra-wealthy will ultimately have to pay is 1.3 trillion euros (1.1 trillion pounds), but no one really knows.

A court ruling in the Mexican case could come later this year, but ISDS watchdog groups are not optimistic about the outcome. Manuel Pérez Rocha, an associate fellow at the Washington Institute for Policy Studies, said the committee’s decisions so far have “so far been tilted in the company’s favor.” Similarly, Helionor de Angiz, a lawyer at the International Environmental Law Center in the U.S. capital, said the court’s finding against Odyssey could trigger pro bono offers from other deep-sea investors looking to profit from ISDS claims. He added that it is possible. The related regulatory chill could be severe, given that Mexico has already paid $296 million in ISDS cases and has 27 cases pending, according to the Transnational Institute.

What is clear is that ISDS is a colonial zombie device whose useful life, if it ever existed, has passed. It grew up riding a legal shotgun against the birth of fossil fuel capitalism due to social, national, environmental, and human rights concerns. Now, its legal guns are aimed at governments that seek to meet the Paris climate accord’s 1.5 degree temperature target without first paying a multibillion-dollar ransom.

The problem is, I don’t have the time or resources to do this anymore. We can keep the planet a livable place, or we can continue to allow the richest and most sociopathic financiers to hold the world to ransom. You can’t do both.

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