Top Arbitration Lawyer Says Corporate Sovereignty System Needs 'Complete Overhaul'
from the weapons-of-legal-destruction dept
A few months back we wrote about the free trade supporter Cato Institute arguing that corporate sovereignty provisions should be dropped from trade agreements, for a variety of cogent reasons. You wouldn’t expect one of the top arbitration lawyers that actually uses the system to go quite so far, but this is pretty close:
A prominent international lawyer has launched a scathing critique of the international arbitration system that deals with investor-State disputes, calling for its “complete overhaul”.
Delivering the keynote address to the Eighth Annual Juris Investment Treaty Arbitration Conference held in Washington, D.C. in late March, George Kahale III — who has been lead counsel in several of the world’s largest international arbitration cases, including a pending claim against Venezuela — also listed the top ten of what he viewed were the most troubling aspects of investor-State arbitration.
His ten points are all good, and well-worth reading, but the first is particularly important. It helps to explain why corporate sovereignty has become such a big issue recently — and why some nations are starting to withdraw from such schemes:
many governments are jumping on to the bandwagon of investment treaties — which Kahale described as “weapons of legal destruction” — often without scrutinising the serious implications and significance of the obligations contained therein.
Governments also often overlook the changing nature of investment treaties — which are expanding in breadth and ambiguity — in favour of investors with the corresponding effect that more and more types of State acts, gestures or Statements are becoming liable to challenge and compensation by foreign investors, said Kahale.
It’s the fact that investor-state dispute settlement (ISDS) chapters are like a ticking trade time-bomb, just waiting to explode at some unknown future date, that makes them so dangerous. A country can’t predict which apparently innocuous change to its laws or regulations will trigger a multi-million — or even multi-billion — dollar ISDS claim against it. Since awards must be met from the public purse, that means there could be a huge unexpected shortfall in the national budget. That lack of certainty — and lack of financial control — is no way to run a country, and is yet another reason why all nations, even the largest, would be wise to refuse to include corporate sovereignty provisions in their trade agreements.
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Filed Under: arbitration, corporate sovereignty, george kahale, investor-state dispute settlement, isds, trade agreements
Comments on “Top Arbitration Lawyer Says Corporate Sovereignty System Needs 'Complete Overhaul'”
As long as a state has no contract with a corporation I don’t see anything that would (or should) make it liable to damages.
We ditched some monopolies? Tough luck that your patents are worth zilch. We increased environmental protection? Tough luck your fracking is now illegal. It wasn’t a contract, it was you who decided you could make a business out of it, and now the people decided the law supporting it wasn’t a good idea (perhaps even exactly because of your actions) and changed it.
But – but – free enterprise n stuff.
The right to rape and pillage anywhere is what they want, and they want the us armed forces to back them up. This has not worked out so well in the past and will continue to cause problems in the future.
Re: Re: Re:
Has anyone told these guys?
Corporate Sovereignty is just another weapon in multinational corporations’ Free Exploitation toolbox, which allows them to use international corporate law to trump a region’s national laws.
The multinationals need only register their company outside the borders of the region they wish to exploit. Then enter that Free Exploitation region and operate with impunity, with no fear of violating that region’s environmental, health, safety, or tax laws.
If regional authorities start to make a fuss. Simply sue that region’s government under international Free Exploitation law, which trumps regional law, and make the citizens of that region repay the lawsuit damages in for form of taxation and austerity measures.
To put it another way, Free Exploitation Agreements are nothing more than a way to bypass a nation’s regional laws. Laws that multinational corporations couldn’t get changed though that region’s domestic government. So the owners of multinational corporations created their own international corporate law tribunals, in the form of the WTO and USTR. Super rich CEOs then lobbied (bribed) regional policy makers to sign on to the Free Exploitation Treaties. Thus allowing international corporate law to trump a nation’s regional laws.
What we end up with is Free Exploitation Agreements that allow multinational corporations to rape, pillage and plunder a nation’s resources and economy, under the highest authority in the world. That authority is international corporate law, which is administered by international corporate trade tribunals, such as WTO and USTR.