Nearly $114 billion is the total amount that arbitration tribunals have made states pay private companies to date. To arrive at this figure, several NGOs or groups of organizations, including Trade Justice Movement and Powershift, compiled years of data and synthesized them on a site launched Thursday June 6, 2024. The number of cases increased to from the 2000s and has exploded over the past fifteen years. Among the most greedy applicants are companies in the fossil fuel sector.
Countries around the world are facing a growing number of claims from private companies through a little-known legal mechanism called investor-state dispute settlement (ISDS). They are provided for in several free trade agreements. Many cases are linked to environmental protection issues, mining and fossil fuels. This data can now be found on the Global ISDS Tracker website.
“The company initiated proceedings after President Biden decided to revoke permits for the construction of an oil pipeline from the Canadian border to the American coast,” he explains to Pauline Gleize of the Environment department of RFI. The president justified his decision by explaining that the pipeline would significantly contribute to global warming. And now the company is seeking $15 billion in compensation. This includes the hypothetical profits that the company could have made with the pipeline,” said Fabian Flues, a member of Powershift, citing the example of Transcanada and referring to the 1,300 requests.
These arbitration tribunals do not always give complete satisfaction to companies. In total, they demanded $857 billion, seven times more than what they have obtained to date. But their victories are not without consequences. “This can be a significant constraint on public accounts. The second consequence is that, often, when companies initiate procedures, governments want to avoid waiting for the court decision and give in.” And the 114 billion dollars identified by this study do not include matters that remained confidential.
Moctar FICUU / VivAfrik
