The right to Free, Prior, and Informed Consent (FPIC) is a cornerstone of Indigenous rights. It recognizes their inherent authority to agree to or reject proposals that may impact their lands, resources, or territories.
ISDS Amounts to Corporate Colonialism
- Regulatory Chill: The mere threat of launching an ISDS case can deter government regulation, known as regulatory chill. Wary of the financial and legal ramifications, governments may become reluctant to enact policies essential for protecting public health, safety, and the environment.
- For example, in Uber v. Colombia, after the U.S. company threatened and then filed an ISDS claim against the government of Colombia, the government backed down from a regulation to ensure fair competition between Uber and local taxi companies.
- Only Investors Can Launch a Case: Governments cannot initiate ISDS cases against investors; only investors can sue governments in ISDS, which means corporations are not held accountable for wrongful actions or omissions that harm host countries.
- In the case of Occidental Petroleum v. Ecuador, a tribunal ordered Ecuador to pay USD 1.2 billion to the company while acknowledging that the company had broken the law and violated the terms of its contract. In Azurix v. Argentina, after failing to provide potable water services as per its contract, Azurix still won a USD 165 million ISDS claim against the Argentine government.
- Conflict of Interest by Arbitrators: The practice of “double-hatting,” where a legal professional serves as arbitrator and legal counsel in different cases, creates an incentive structure that benefits corporations at the expense of governments. For instance, one Swiss arbitrator served as the corporation’s appointed arbitrator, when only shortly before accepting the role, they had been appointed director at an international bank whose investment portfolio included an interest in one of the claimants.
Originally published by Public Citizen, June 2024. under the terms of a Creative Commons Attribution-Noncommercial-NoDerivs 3.0 United States license.
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