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Investigative series looks at inequalities & injustices in intl. investment arbitration

Buzzfeed News investigates the injustices of investor state dispute settlement (ISDS) in a four part series. The series explores how the threat of arbitration is enough to chill government regulation, how ISDS helps executives escape punishment & how financial companies use the system for profit. 

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Article
1 September 2016

A Homegrown Disaster

Author: Chris Hamby, BuzzFeed

…Designed to protect international companies when rogue governments seized their assets or flagrantly discriminated against them, this worldwide private justice system has morphed into a tool companies can use to force nations to fork over hundreds of millions or even billions of dollars for enforcing ordinary laws…[I]nvestor-state dispute settlement, or ISDS, has widened into a torrent of legal claims, many of them against countries that are poor…But ISDS has a towering champion, a backer with immense economic and diplomatic muscle: the United States of America. Indeed, President Barack Obama is asking Congress to usher in an enormous expansion of ISDS by ratifying a sprawling new trade deal, the Trans-Pacific Partnership, or TPP…But just this year, TransCanada filed a $15 billion ISDS claim against the US, arguing that the Obama administration’s rejection of the company’s controversial Keystone XL pipeline was unfair and discriminatory…and the denial actually was motivated by politics…The Nobel laureate economist Joseph Stiglitz…and other leading scholars last year urged members of Congress to keep ISDS out of the Trans-Pacific Partnership. Their stark warning: ISDS “risks undermining democratic norms because laws and regulations enacted by democratically-elected officials are put at risk.”…

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Article
31 August 2016

To Bankers, It’s Not Just A Court System, It’s A Gold Mine

Author: Chris Hamby, BuzzFeed

An 18-month BuzzFeed News investigation reveals how the financial industry is elbowing its way inside the doors of this global super court, transforming a system of justice into an engine of profit…[T]he financial industry, once largely absent from the system, is increasingly pressing ISDS claims, often against nations that are poor or in the throes of economic crises…But critics say that ISDS is vulnerable to exploitation by elite corporate lawyers and their financial-industry clients...[Refers to Citibank, Deutsche Bank, Gramercy Funds Management & Standard Chartered Bank]

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Article
30 August 2016

The Billion-Dollar Ultimatum

Author: Chris Hamby, BuzzFeed

…Though most people have never heard of it, this justice system has the power to make entire nations fork over hundreds of millions or even billions of dollars to companies…Of all the ways in which ISDS is used, the most deeply hidden are the threats, uttered in private meetings or ominous letters, that invoke those courts. The threats are so powerful they often eliminate the need to actually bring a lawsuit…ISDS is so tilted and unpredictable, and the fines the arbitrators can impose are so catastrophically large, that bowing to a company’s demands, however extreme they may be, can look like the prudent choice…[I]nvestigators for the [Indonesia]’s human rights agency found that authorities had illegally detained people, tortured them, and murdered one [while protecting a Newcrest mine]…[T]he government had violated the people’s economic, social, and cultural rights in allowing Newcrest to mine the sensitive forest area.  The agency wanted the government to re-evaluate the company’s permit.  But human rights agencies had only the power to recommend. Foreign businesses had the power to sue for billions…[Refers to Karaha Bodas Company, Maersk Oil & Tullow Oil].

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Article
28 August 2016

Inside The Global “Club” That Helps Executives Escape Their Crimes

Author: Chris Hamby, BuzzFeed

Imagine a private, global super court that empowers corporations to bend countries to their will…Imagine that a company could turn to this super court and sue the whole country for daring to interfere with its profits, demanding hundreds of millions or even billions of dollars as retribution…[I]magine that the penalties this court has imposed have been so crushing — and its decisions so unpredictable — that some nations dare not risk a trial, responding to the mere threat of a lawsuit by offering vast concessions, such as rolling back their own laws…Known as investor-state dispute settlement, or ISDS, it is written into a vast network of treaties that govern international trade and investment…Companies and executives accused or even convicted of crimes have escaped punishment by turning to this special forum…ISDS has morphed from a rarely used last resort, designed for egregious cases of state theft or blatant discrimination, into a powerful tool that corporations brandish ever more frequently, often against broad public policies that they claim crimp profits…[E]ven some supporters of ISDS now worry that the system has been misused to help the powerful evade justice and to hold hostage the economy of a nation still in turmoil...[Refers to Bank Century & Damac Properties].