> I'm not ok with private companies suing sovereign nations
Do you think government agencies and leaders should be above the law in general, or only with respect to companies?
Do you think government agencies and leaders should be above the law in general, or only with respect to companies?
ISDR (investor state dispute resolution) is usually arranged as a private arbitration, with arbitrators who conspicuously do not meet conflict of interest or probity rules of even a hicksville kangaroo court. ISDR has the power to force judgements which are strongly not in the public interest, under the pretence of 'market interference'. The most obvious case is the tobacco lobby trying to prevent plain packaging legislation.
This idea that trade deals can guarantee commercial justice for large multinationals in authoritarian countries, but we shouldn't expect any such improvement for citizens, is quite abhorrent.
Why shouldn't we? Does TPP prohibit that? No. Are you saying that countries with poor rule of law should not make any improvement to the Trent tho for the rule of law unless it does it all completely in one go? Are incremental improvements undesirable or actively bad? That's a pretty extreme absolutist position to take.
At the moment governments are pressured by other governments and multinationals to have stronger rule of law. The cost of capital is higher in more corrupt countries. The threat of capital flight is a significant disincentive to government crackdowns on democratic movements -- building stops, bond returns skyrocket, lines of credit disappear, arms sales stumble.
TPP is the promise that your foreign capital is safe, even though locals are screwed. Even better, companies sue governments for raising the minimum wage, or enforcing OH&S.
This isn't 'give a little, get a little', this is 'we're taking your rights'.
In particular, a government that changed the law because certain behaviour was found to be harmful would potentially be required to pay huge amounts of compensation to a company whose business model relied on doing those harmful things. This is particularly relevant in fields like public health, environmental protection and sustainable exploitation of natural resources.
The problem with this is that the same governments that might genuinely legislate to, say, protect public health by banning smoking in restaurants or protect the environment by banning diesel-powered vehicles with unacceptable levels of particulate emissions can also legislate for protectionist purposes in ways that really do screw over foreign companies. This makes countries with such governments, or the fear that their government go down this path, much less attractive for foreign investors. And so those investors look for safeguards that will ensure governments can't arbitrarily take advantage of them once they've put their money in.
Which brings us back to step 1 in the case of foreign investors whose investments turn out to be in harmful things, whether or not anyone realised that in advance, and so the cycle continues.
That doesn't mean we should fear the bogeyman, since in reality such provisions have not been unusual in previous free trade agreements and the most notable ISDS cases were ultimately failures for plaintiffs like Big Tobacco. But even though results have usually gone the right way in the past, they have still cost the governments involved a lot of time and money to fight the case, and that alone is grounds for asking whether the ISDS provisions are a good idea.
No foreign nation or individual should be able to override what a country has decided to do via the democratic process. There is no absolute higher authority to appeal to in a true democracy.
In this case - it's not about suing the government for doing anything outside the law.
Company ABC decides to extract tons from freshwater from country XYZ.
Country ZYZ realizes this is damaging the environment, and puts in some regulations.
Company ABC can now sue country XYZ - just for having good governance.
There are many reasons that company ABC should be able to sue country XYZ ... but the it's so broad that it can lead to problems.
https://www.pressprogress.ca/5_times_canada_got_sued_under_n...
http://www.huffingtonpost.ca/2015/01/14/canada-sued-investor...
Canada banned a fuel additive that was only used by one company (foreign) called Ethyl Corp on the basis of health reasons. Ethyl Corp sued, saying the additive was actually banned for political reasons rather than on any scientific grounds, and the Canadian government chose to settle - paying them some $20 million dollars and withdrawing the law they were implementing.
On the face of it, it seems like Ethyl Corp was the bad guy and the Canadian government was pursuing legitimate policy in the public interest, and this is certainly how it was played out in the media. In actual fact, Ethyl Corp presented the Canadian governments own documents coming from the Health and Environmental departments, dating to about a year prior that unequivocally stated that there was absolutely zero danger from using the additive in fuel. In fact, the party that tried to get the law through had had strong historical links with the domestic companies competing with Ethyl Corp.
In all the papers, it was portrayed as 'Company sues government over environmental protections/health protections', and that's how all ISDS cases get presented in mainstream newspapers. 'Company screwing with our laws' sells way more papers than 'company disputes unfair government policies', I guess. I don't know about you, but I don't think it's fair that foreign investors should be unfairly discriminated against in this way. ISDS prevents political parties from favouring their contributors over foreigners by enacting biased laws such as these. Why should Joe Public lose out because one of the parties is trying to cozy up to their largest donors, and why is it fair that international investors get screwed just because they're foreigners? In actual fact, ISDS is a great way of keeping governments accountable by limiting the political favours they can hand out whilst in office.
Regulations aren't grounds for an ISDS suit, unless they're implemented discriminatorily.
[0] http://www.economia-snci.gob.mx/sic_php/pages/importa/sol_co... (p.4 onwards)
If a company believes they can sue, and convince a judge ... well, they'll sue.
I get that it's nuanced, but it's a problem, is my point.
And its their right to have their case heard if that's the case, no?