Stop group lawsuits - No parallel justice for investors

Current action: Stop corporate lawsuits – Sign the petition now!

Corporations can sue states before private arbitral tribunals for billions in compensation, for example for measures to protect the climate, the environment or health. These special rights for investors (ISDS) place corporate interests above democratic decisions.

Why corporate lawsuits endanger democracy, climate and environmental protection, we explain below on this page.

That must end. Together with organisations and movements from all over Europe, we are committed to finally abolishing the special rights for corporations. With a joint petition, we therefore address the national governments and call on them to act:

We call on you to remove ISDS from existing agreements, ideally in cooperation with other countries, and not to conclude new agreements with ISDS.

Sign the petition now and increase political pressure for a world without ISDS!

Stops corporate lawsuits to protect the climate

With multi-billion-dollar lawsuits before non-transparent arbitration courts, corporations and oligarchs are enriching themselves with taxpayers' money, hindering ambitious climate policy and undermining European sanctions. PowerShift is committed to ending these special rights for investors.

Example of coal phase-out

The German coal phase-out has been hindered several times by corporate rights. With the two lignite companies RWE and LEAG, the Federal Government negotiated a waiver of its group rights. They had to pay them dearly and received a billion-dollar payment, among other things, for the promise not to bring arbitration suits.. Withdrawal from coal Swiss company AET is currently suing an arbitral tribunal for a million-dollar compensation. AET would like to receive hypothetical revenues from the coal-fired power plant from taxpayers’ money by 2053 – although Germany must already be climate-neutral by 2045.

Example: Sanctions against Russian oligarchs

After the Russian invasion of Ukraine, the EU and Ukraine imposed extensive sanctions on Russian corporations and oligarchs. In more than 28 cases, they use corporate litigation rights to take action against the sanctions. Although the claims for compensation are not known in many of the lawsuits, the sum of the filed and threatened lawsuits amounts to more than USD 60 billion. Thus, arbitral tribunals are now also being used to undermine EU and Ukrainian security policy.

Arbitration tribunals as a ‘secret weapon’ for corporations and oligarchs

This is not an isolated case: Time and again, when democratically adopted laws or new regulations in the climate and environmental field limit the profits of international investors, they resort to the ‘secret weapon’ arbitration courts. Security policy is also increasingly in the crosshairs. Arbitration tribunals offer clear advantages to these investors:

Proceedings are conducted by three arbitrators, who are selected by the plaintiff investors.
Claim for hypothetical gains: Investors can claim future hypothetical profits – something that would not be possible under national or European law.
There are no appeals for rulings of the arbitral tribunal and decisions of the arbitral tribunal can be enforced worldwide.
Climate protection, human rights and social balance play no role in these procedures.

More than 1,500 group lawsuits worldwide

Worldwide, there are now over 1,500 of these lawsuits, most of them against countries of the Global South. How we documented on a website, States have been sued for more than $850 billion and investors have been able to recover more than $110 billion in taxpayers' money through corporate lawsuits (as of 2023). Most lawsuits and the highest amounts of compensation are in the fossil fuel industry. This uses the group lawsuit system to take action against climate protection measures or against higher taxes. Germany must act

These lawsuits are made possible by intergovernmental investment protection treaties, which allow investors to go to private arbitration courts. Germany has concluded most of these contracts, a total of 114. In addition, investors from Germany have brought the fourth most lawsuits worldwide, while the Federal Republic itself has now been sued six times. Germany is thus a core country of the group lawsuit system. As our scorecard shows, Germany has the third most harmful investment protection policy among European countries.. Only Great Britain and the Netherlands are ahead of the Federal Republic of Germany in this negative ranking.
Germany is increasingly suing itself. A total of eight group lawsuits are publicly known, including against the nuclear and coal phase-out, as well as against the excess profit tax and Ukraine-related sanctions. The Federal Government has described the German investment protection agreements as ‘obsolete in many respects’, but does not draw the necessary consequence of denouncing them. PowerShift is strongly committed to this.

Our success: Withdrawal from the Energy Charter Treaty

A beginning has already been made. In 2022, the Federal Republic of Germany withdrew from the Energy Charter Treaty, which protects investments in the energy sector from government regulations, and led to most group lawsuits worldwide. After a civil society campaign, a total of 12 European states, including France, Spain, Poland, the UK and the EU itself, decided to withdraw from the Energy Charter Treaty. They justified their withdrawal by the fact that the treaty restricts their climate protection policy too much. However, the investment protection agreements that still exist enable group lawsuits as well as the Energy Charter Treaty.

Our demands: End of group lawsuits

That's why PowerShift demands:

Termination of existing investment protection contracts: Germany has signed 114 of these treaties, more than any other country. These agreements must be terminated as soon as possible.
No new free trade agreements with corporate litigants. The EU-Mexico agreement, for example, would introduce additional group litigation rights. In the EU-Indonesia agreement, the Bundestag and other European parliaments are not allowed to approve it.

What we do: Together against group lawsuits

Together with our partner organisations from all over the world, we are committed to an end to corporate litigation rights. To this end, we inform the public about particularly scandalous lawsuits, organise appeals to politicians, participate in reform processes at the international level and put pressure on the streets.