Corporate Sovereignty Provisions Called Into Question Around The World
from the ISDS-is-*so*-twentieth-century dept
South Korea plans to hold talks with the United States to rework the investor-state dispute (ISD) clause in their two-year-old free trade pact that has long been cited by critics as being unfair, a government source said Sunday.That's possible because of the following prescient move by South Korea at the time of the trade agreement's signing:
To receive parliamentary approval, Seoul forwarded a proposal to lawmakers that promised a "reevaluation" of the ISD clause down the line.One country that has already "re-evaluated" ISDS, and found it wanting, is South Africa, as Techdirt explained at the end of last year. But the Lexology site reports that it could soon be joined by another major economy:
According to the Netherlands Embassy in Jakarta, Indonesia has informed the Netherlands that it has decided to terminate the Bilateral Investment Treaty between the two nations from 1 July 2015. The Embassy also states that "the Indonesian Government has mentioned it intends to terminate all of its 67 bilateral investment treaties".Once more, it seems that painful experiences of corporate sovereignty played their part in the decision:
it would not be surprising if the Churchill Mining Plc v Indonesia cases (ICSID Cases ARB/12/14 and 12/40) have prompted more sweeping action by the Indonesian Government. Churchill and Planet Mining Pty began arbitration against the Indonesian government in May 2012 at ICSID in Washington. On 24 February 2014 the ICSID Tribunal rejected Indonesia's jurisdictional challenges leaving Churchill free to proceed with a claim for damages of not less than US$1.05bn, excluding interest. This decision has caused outrage in Indonesia.That outrage is understandable, since it will be the Indonesian public that will have to foot the billion-dollar bill if the ISDS tribunal rules against Indonesia. In a way, the almost unfettered power of corporate sovereignty has become its own worst enemy. The possibility of making claims for billions of dollars has naturally caught the attention of both the public and politicians in the nations affected, prompting many to re-consider the wisdom of agreeing to this kind of one-sided bargain.
If Indonesia does indeed start terminating its 67 bilateral investment treaties, we can expect other countries to take note and consider following suit. One knock-on effect will be that US insistence on putting corporate sovereignty provisions in TPP will begin to look distinctly out of place in a world where prudent nations are starting to move away from them.