Ecuador scraps ‘corporate court’ investment treaties

26 May 2017 - 11:30am
News

At the same time that the European Commission faces a huge internal blow to its corporate trade deal agenda, the global fightback against corporate courts has taken another huge step forward.

Ecuador has decided to terminate all its bilateral investment treaties due to its recognition of the immense dangers posed by corporate courts.

In recent years, there has been a wave of opposition to ISDS corporate courts spreading across Southern countries including India, South Africa, Indonesia and Bolivia.

And the timing couldn’t be better: the European Commission is currently trying to institutionalise ISDS into the ‘Multilateral Investment Court’, a proposal which may never become a reality if the Commission can’t gain a critical mass of support from countries around the world. (For an analysis of the Court proposal, see this from the Seattle to Brussels Network.)

Ecuador reached its decision after establishing an international audit commission to examine the benefits and costs of Ecuador’s investment treaties.

In short, it found that the deals offer no benefits but significant costs (much like research the UK government commissioned – and then buried - into ISDS impacts on the UK under TTIP), they fail to boost investment and undermine constitutional commitments centred on development objectives.

In 25 cases, Ecuador has been ordered to pay out $1.5 billion to business, with another $13.4 billion (or half the country’s annual budget) on the table in open ISDS cases.

As Cecilia Olivet of the Transnational Institute, who chaired the audit commission, said: “Ecuador is not alone in denouncing these unjust investment agreements. It is joining a wave of countries around the world calling for a new international legal framework for investment which prioritises public interest over corporate profits.”

(You can listen to an interview with Cecilia about the Ecuador audit commission’s work here or access its full report (in Spanish) here.)

The experience of Ecuador is a pattern that has been repeated across Latin America, one of the prime regional targets for ISDS profiteers, often mining or energy companies.

In a corporate court case against El Salvador, mining company Oceana Gold demanded, at one point, $300 million – twice the amount the country receives in development assistance – after failing to gain a mining permit due to a lack of environmental permissions, not holding land rights for the project, and failing to submit a final feasibility study.

El Salvador spent millions on its defence, prompting the president of the Association for the Development of El Salvador to say: “This is a law suit that should never have been allowed. The millions of dollars that El Salvador has spent in legal costs could have been used to strengthen badly needed social programmes in our country.” 

Such experiences prompted the country to become the first in the world to impose a blanket ban on all metal mining.

With the global fightback against ISDS corporate courts growing daily, activists and campaigners in the UK can play a critical role in ensuring that corporations are held accountable to the rule of law. Stay tuned for upcoming campaign opportunities, and read our co-published ISDS report here.

Latest news

BDS is a legitimate means of protest against human rights abuse, says War on Want

14 December 2017 - 12:15pm

Campaigning for BDS is a legitimate means of protest, a fact that has been affirmed time and time again by bodies such as the European Union. It’s effectiveness is one of the main reasons why there is an organised campaign led by the Israeli government to shut it down. Students have every right to use their democratic rights to organise and exercise freedom of expression, and should be applauded for calling out violations of international law and human rights abuse.

Read more

Was it too much to expect the WTO to deliver for women?

14 December 2017 - 12:00pm

Argentina, host for this week’s World Trade Organisation, welcomed hundreds of government representatives to Buenos Aires to negotiate the rules of the global trade in goods, services and ecommerce. Lagging far behind other international fora, the WTO made attempts to draw attention to the impact of trade on gender equality, and correspondingly the impact women’s economic productivity can have on trade.

Read more

Join the conversation

Get War on Want materials for your #union, #campaign or #protest. We'll send you FREE publications and merch:… https://t.co/oKt06npIzn 7 hours 42 min ago
Was it too much to hope the #WTO would deliver for #women? War on Want asks: https://t.co/kXHmd0SUrH https://t.co/Onm5oGPOVk 10 hours 43 min ago
A significant victory for campaigners against the Government's HostileEnvironment. Everyone should be entitled to e… https://t.co/D2eO54lISp 11 hours 26 min ago