‘Litigation terrorism’: the obscure tool that corporations are using against green laws
Investor-State Dispute Settlements are legal, huge and often hush-hush – and fossil fuel firms and others are using them to hold the planet to ransom
Arthur Neslen
Mon 12 Feb 2024 16.00 CET
What do you get if you cross the planet’s richest 1%, a global legal system adapted to their investment whims, and the chance to squeeze billions from governments? The answer is “Investor-State Dispute Settlements”, or ISDS, alternatively dubbed “litigation terrorism” by Joseph Stiglitz, the Nobel prize-winning economist. ISDS is a corporate tribunal system, where a panel of unelected lawyers decides whether a company is owed compensation if the actions of national governments leave its assets “stranded”.
In hearings, which are often held behind closed doors, ISDS documents, claims, awards, settlements – even the content of cases – need not be made public, regardless of any public-interest considerations.
Last week the Guardian revealed how Odyssey Marine Exploration, a US-based subsea mineral extraction company, was using an ISDS panel to sue Mexico for $2.36bn (£1.87bn) after the government moved to prevent it dredging off the Pacific coast.
The company had obtained a 50-year concession over an area of sea floor off Baja California Sur, and sought a permit to mine phosphate in it. The area is a pristine breeding ground for giant grey whales and is also home to endangered sea turtles, octopus and the abalone mollusc. Odyssey said that its dredging would take place in a small area, with protection for sea creatures and measures to help “regenerate” the sea floor afterwards. But deep-sea phosphate mining entails risks of pollution, radiation and biodiversity loss, as well as damage to coastal livelihoods and communities.
When Mexico turned down the permit – once in 2016, and again, definitively, in 2018, saying Odyssey “sought to uninterruptedly dredge the sea floor” of a place “that constitutes a natural treasure and of utmost importance for Mexico and the world” – the company took it to an ISDS arbitration tribunal, arguing it was owed compensation for lost revenue.
According to the Transnational Institute, there have been 1,383 known ISDS cases to date. These courts dish out the highest average claims for damages and the highest average awards of any legal system in the world.
The panels are composed of three lawyers – one appointed by the investor, one by the state, and a president agreed by both. They are mostly white, male, business-friendly investment lawyers from the global north.
https://www.theguardian.com/environment ... overnments 