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Report

1 Jun 2019

Author:
Lora Verheecke,
Author:
Pia Eberhardt,
Author:
Cecilia Olivet,
Author:
Sam Cossar-Gilbert

Red Carpet Courts: 10 stories of how the rich and powerful hijacked justice

"Imagine an environmentally or socially destructive corporate project – say, a toxic mine, which could poison your local supply of water, or a luxury real estate project, which would displace hundreds of people in its neighbourhood. You and your community oppose the plans, the courts judge in your favour and the project is stopped. Seems like a community victory right? But then, the company behind the project sues your country for interfering with its profits, demanding millions or even billions in compensation, including for future profits. Imagine the lawsuit takes place in a biased pseudo court where rulings have been so devastating for countries that many respond to a case, or even the mere threat of one, by offering vast concessions, such as rolling back their own laws.

Actually, you do not need to imagine all this. It is the reality. Under the ISDS (investor-state dispute settlement) parallel justice system for corporations and the rich, companies can sue countries when they think that government decisions or court rulings – even ones whose explicit aim is to protect people or the environment – affect their profits. These lawsuits bypass domestic courts and take place before an international tribunal of arbitrators: essentially three investment lawyers who decide whether private profits or public interests are more important.

For example, after Colombia’s Constitutional Court banned mining activities in a sensitive ecosystem which provides drinking water for millions of Colombians, Canadian mining company Eco Oro sued the country for US$764 million in damages. When Croatian courts cancelled illegal permits issued for a luxury golf resort in the city of Dubrovnik, Croatia was hit with a US$500 million compensation claim. Romania is defending itself from a shocking US$5.7 billion claim by Canadian mining company Gabriel Resources, after the country’s courts declared the company’s proposed toxic Roşia Montană gold mine illegal... "

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