ISDS is coming this way and it is disastrous

A disease going by the name of ISDS is threatening the citizens of Europe.

Its symptoms are a very strong pain in the wallet, a pain of the sort you’ve probably never felt before.

ISDS is a court of law in which companies (and only companies) can sue countries for large sums of money, even though the countries broke no law. We are talking billions here. Small countries can easily be bankrupted by ISDS. All that is required for a country to be found guilty is that some measure taken by the country is affecting the company’s bottom line.

The abbreviation ISDS stands for Investor-State Dispute Settlement. Feudal courts for robber barons, that is what ISDS really means. Courts that are an instrument for companies rather than an arbiter between two parties.

Imagine that you go to school and every day a much older bully beats you up and takes your lunch money. Sometimes you get lucky and the head master catches the bully. In this analogy, ISDS is when the head master hates you and the head master is actually the parent of the bully and only believes their story.

Here is a real life example. The sovereign and presumably democratic country of Australia recently committed to ISDS. In 2011 Australia proposed to implement its Tobacco Plain Packaging bill. This bill makes it obligatory to sell cigarettes in packages from which almost all brand information has been stripped. This is I guess because tobacco kills people and Australia wants to make smoking seem less attractive.

In April 2011 tobacco manufacturer Philip Morris started an ISDS procedure against Australia. The company argued that since it no longer could brand its cigarette packages clearly, the law would cost them money. They told the Australian government to kill or amend its law. Their extortion letter (if anyone has a better word, please let me know) claimed that they would lose billions of dollars if the law were to pass. (At the time of writing one Australian dollar is worth slightly less than an American one.)

That year Australia passed its Tobacco Plain Packaging law which went into effect on January 2012. In November 2011 Philip Morris started the second phase of its procedure, telling Australia one last time to revoke its law or suffer the consequences. Again the ‘damage’ to Philip Morris was claimed to be ‘an amount to be qualified but of the order of billions of Australian dollars’.

In 2012, 2013 and 2014 the ISDS court has been setting up and outlining the way the proceedings would go. As is the case when you let multi-nationals write your laws for you, vast parts of the proceedings are off limits to the public. The document for instance in which Philip Morris tells the court how much money it wants (the so-called Statement of Claim) is a secret.

It probably doesn’t come as a surprise that Australia now wants to get rid of its ISDS agreements.

It’s clear why multi-nationals want ISDS. It’s not at all clear why politicians want ISDS, but they do ever so much. When politicians aren’t wringing their hands while whining about how little voters understand them, they’re walking around with rock hard erections (men and women alike) while thinking of ISDS.

ISDS is a fairly new phenomenon. In a 2013 overview published by UNCTAD (PDF) you can see how the world has gone from 0 cases in 1992 to dozens per year now. In 2012 alone there were nine wins for the multi-nationals who managed to steal over 2 billion dollars from the public. These are the damages awarded, the number excludes compound interest and I cannot be bothered to figure out who payed for the proceedings, although that doesn’t seem hard to guess.

Is there anything we can do about ISDS? It seems very unlikely. If the state wants complete sovereignty except where multi-nationals are concerned, something is very rotten with the way the state works. Puttering around the edges isn’t going to help much.

Meanwhile I’m not too bad. It is the people that always say politics don’t interest them that will get hit the worst. Cynical this may be, but I will allow myself a little wry smile when ISDS comes to these shores wrapped in secret trade agreements such as TTIP, CETA or TiSA.

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