Fossil Fuel Companies Want Governments To Pay $18 Billion For Bringing In Laws Tackling The Climate Crisis Largely Caused By Fossil Fuel Companies
from the corporate-sovereignty-at-work dept
Back in 2013, Techdirt started writing about the boring-sounding Investor-State Dispute Settlement (ISDS) system. It was so boring, we decide to use a better term for it: corporate sovereignty. It’s an appropriate name, since this system of secret courts effectively places companies above a government, by allowing them to sue a nation if the latter takes actions or brings in laws that might adversely affect their profits. It was originally designed to protect companies that invested in unstable parts of the world, and to discourage things like expropriation by corrupt officials. But clever lawyers soon realized it was much more general than that, and could be used as a weapon against even the most powerful — and stable — nations.
It allows deep-pocketed companies — typically multinational corporations — to threaten governments with big fines if they pass laws or make decisions that aren’t to the companies’ liking. That includes actions that are clearly justified and in the interests of the country’s citizens. For example, over the years Techdirt has written about how corporate sovereignty was used to threaten governments that wanted to protect public health, even measures to tackle COVID-19.
In 2015, this blog warned that the TAFTA/TTIP trade agreement under discussion then would allow companies to challenge actions taken to protect the environment, such as bringing in laws to tackle the climate crisis. TAFTA/TTIP never happened, so fossil fuel companies have now turned to other treaties to demand over $18 billion as “compensation” for the potential loss of future profits as a result of recent decisions taken around the world to tackle climate change. Global Justice Now has a summary:
Five fossil fuel companies are suing governments for more than $18bn for taking climate action that could harm their profits, new figures reveal, as protestors demand an end to secretive corporate courts.
TC Energy, RWE, Uniper, Rockhopper, and Ascent are suing governments through investor-state dispute settlement (ISDS), a shadowy system of corporate courts that operates outside of a country’s domestic legal system as it is built into trade and investment deals.
Four of the five cases are under the Energy Charter Treaty (ECT), an energy investment agreement that includes ISDS, which the UK and EU are signed up to. TC Energy’s case against the US government is under the North American Free Trade Agreement (NAFTA).
The $18bn (?13bn) demanded by just five companies is almost equivalent to the entire net annual climate funding provided by rich countries to the developing world, which Oxfam assesses as $19-22bn.
As that last paragraph points out, if the companies are successful — by no means guaranteed, but entirely possible, given the nature of the special ISDS courts — the money needed to pay companies would amount to the the entire annual climate funding provided to the developing world. It seems a bit rich that these companies should not only make huge profits from selling fossil fuels that are largely responsible for our climate crisis, but also want to be paid serious money for being forced to stop. But that’s corporate sovereignty for you; it’s clearly time to get rid of it.