We need to take back control from Corporate Courts, which threaten our Green Progress.

byStephen Pennells

Recent centuries have seen massive international investment: the Suez and Panama Canals spring to mind, but massive infrastructure projects such as ports, railways,  roads, power stations and grids, mines, wells, pipelines, and roads are no less important.  Now in our digitalised world, this is extended beyond steel and concrete to include our data, pharmaceuticals and finance.  Most of this has been done by private enterprise and money. 

When people have invested, they should be able to benefit from the investments without having them ripped off.  It’s only fair.

But does the same apply to a profit-maximising corporation impacting life chances and provoking trouble? 

Once sewage was thrown into the street, later poured untreated into rivers.  Overt slavery was unremarkable and acceptable; now we reject it.  Formerly, children worked long, dangerous hours in mines and factories…

To eradicate these miseries, government action and expenditure were needed, which were achieved by public pressure.  Benefits became apparent later.  Compensating owners (not slaves!) cost the exchequer approximately £20m,-  £16.5bn in today’s terms.

Today, the fundamental threats are pollution and climate and environmental collapse.   Indestructible “forever chemicals” and synthetic microplastics invade our bodies, as do microparticles in the air. 

It’s not just humans suffering.  Species extinction results in falling biodiversity and genetic variety; a narrower gene pool risks an ever-accelerating mass extinction as diversity hedges against risks when facing disaster. It’s madness to put all one’s eggs in one basket.

With the extinction of wildlife, our very survival is jeopardised as biosystems liberating nutrients, such as the unique breakdown of lignin (wood) by fungi (microscopic in the guts as well as visible mushrooms), may collapse, leaving us with barren soil in a couple of years or unfertilised fruit blossom, wiping out crops that are insect-pollinated.

All this will (un)naturally lead to greater displacement of people, conflict and suffering.

The vast majority of the electorate appreciates that regulation for the common good can achieve goals for which commercial interests and their stooges have no concern. 

However, there is often a major impediment- the unbalanced system of corporation-favouring trade deals, which include “justice” which only works one way.

As colonialism came to an end, the powerful countries protected their interests using schemes that prevented new nations from nationalising the assets in their territories. Named “Investor-State Dispute Settlement” (ISDS) or “Investor Courts System” (ICS), the schemes were incorporated into trade deals.   

ISDS has various names but is essentially the same- foreign corporations can sue sovereign governments if legislators’ actions are said to impact profits, or even potential profits!  Note: only foreign corporations, not “home businesses”.  Transnationals, therefore, get subsidiaries to claim; a smaller firm cannot.  International conglomerates sue governments, governments cannot reciprocate and spend millions fighting off vexatious claims. 

Governments simply can’t win- at best, they don’t lose!

So what?  Well, in recent years, ISDS  has been used to bully governments into abandoning health, environmental and climate policies.  E.g. to challenge a ban on fracking in Quebec.  In 2013, the Lone Pine oil and gas company used a USA subsidiary to sue Canada seeking £90m for a moratorium on Quebec’s permission to explore the feasibility of fracking (drilling and cracking rocks for fossil fuels) under the St. Lawrence River.  Although the plea was rejected, the Canadian government was left with a bill of $703,511.76.

Since then, German firms RWE and Uniper sought damages over the Netherlands’ decision to phase out coal by 2030, seeking compensation of over $1.6 billion.

Worldwide fossil fuel companies have used ISDS to wriggle out of payments for devastating pollution and human rights abuses in Ecuador and Colombia, where they sought $13 billion+.

Even if ISDS litigation is unsuccessful, it is useful as comparatively cheap to launch, cheaper still to threaten!  The spectre of a lengthy suit chills vulnerable governments, coercing them into inaction. 

Now it’s come home to us.  A Singaporean holding company, owned in the Cayman Islands, is appealing the High Court’s blocking of West Cumbria Mining’s proposal to develop a new deep coal project at Whitehaven- a project potentially responsible for climate-trashing emissions for decades.  

Realising their vulnerability to claims against decarbonisation programmes, the EU and our government announced withdrawal from the Energy Charter Treaty last year.   (The ECT sought  market “fairness”,  integrating all sorts of energy sources and systems and encouraging investment after the fall of the Communist Bloc.)  

But we’re still vulnerable.  ISDS liabilities remain in bilateral trade treaties, which our governments have been pushing in the flurry of hasty post-Brexit deals.

Karine Nohr recently (Oct. 16) spelt out the health toll of fossil fuels hitting us all, especially poor people living near extraction sites.  With transnational business networks, a vulnerability is easily exploited. 

We need to take back control.  Can we afford to pay off corporations for not being poisoned and having our environment trashed so they can continue profiteering?  Can we afford to lose secure long-term green jobs?  Can we afford ever-higher fossil fuel energy bills?  I think not!

Our government needs to do many things about climate; getting rid of ISDS is an obvious one (also helping in many other fields).  To encourage them visit globaljustice.org.uk/stop-isds.