Rene Colocho with an image of his daughter, Angela, who committed suicide after struggling with severe lead poisoning for years. Colocho blames her sickness on pollution from a company which escaped punishment after appealing to the ISDS.
International corporations have been able to avoid punishment for toxic pollution and worse by appealing to a secretive and little-known international tribunal. It’s called the Investor-State Dispute Settlement program, or ISDS. An 18-month investigation by BuzzFeed News raises serious questions about its judgement and its power.
The mechanism was setup with good intentions in the 1950s to protect individual and corporate property from arbitrary government action and expropriation. It's been reinforced by a variety of international trade treaties, including The North American Free Trade Agreement. It's also included in the proposed Trans-Pacific Partnership (TPP).
Governments can and do win cases against corporations. In fact, a UN assessment in 2014 showed that more cases have been settled in favor of "host states" rather than the investors.
But the BuzzFeed News investigation shows that lawyers in the "club" today are pushing corporations to initiate actions to contest government regulations and controls that might affect their bottom lines.
One example, according to Chris Hamby, the lead reporter for BuzzFeed News, is a case from El Salvador.
Hundreds of people, including dozens of children, are living with lead poisoning after a factory pumped toxic waste into their village, in violation of government regulations. Several people have died. One child, Angela Colocho, tired of the sickness and killed herself.
The government has forced the factory to close, but has been unable to prosecute its owners, who have moved to the United States. Attorneys for the owners sent a letter threatening the government with an ISDS complaint, saying their rights under the Central American Free Trade Agreement had been violated. The net result, says Hamby is that “the factory is not on the hook for a clean-up and medical care that the Salvadoran government says will cost $4bn.”
BuzzFeed News is not the first to comment on the ISDS. Hamby writes in his story:
"In a little-noticed 2014 dissent, US Chief Justice John Roberts, warned that arbitration panels hold the alarming power to review a nation’s laws and 'effectively annul the authoritative acts of its legislature, executive, and judiciary.' ISDS arbitrators, he continued, 'can meet literally anywhere in the world' and 'sit in judgment' on a nation’s 'sovereign acts.' "
Hamby says "basically, by design, the system lacks many of the safeguards that a developed court system would have."
You can read his full story here.