Stop corporate lawsuits to protect the climate

With billions of dollars in lawsuits before non-transparent arbitration tribunals, corporations enrich themselves with taxpayers' money and impede an ambitious climate policy. PowerShift is committed to ending these investor arbitrations.

Example: RWE and Uniper against the Netherlands

Shortly after the Dutch government passed a coal phase-out law to comply with its international climate commitments, two lawsuits were filed by German energy companies RWE and Uniper. Together, they demanded almost 2.4 billion euros in compensation for the Dutch coal phase-out by 2030, as their power plants can now run shorter than originally planned. Their lawsuits, which have since been withdrawn, they filed before private arbitration tribunals.

Arbitration courts as a "miracle tool" for corporations

This is not an isolated case: Time and again, when democratically adopted laws or new regulations in the field of climate and environment limit the profits of international investors, they resort to the "miracle remedy" of arbitration tribunals. Arbitration courts offer these investors clear advantages:

• Proceedings are conducted by three arbitrators, two of whom may be appointed 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.
• Climate protection, human rights and social compensation play no role in these procedures.

More than 1,300 corporate lawsuits worldwide

There are now more than 1,300 of these lawsuits worldwide, most of them against countries in the Global South. How we documented on a website, States have been sued for more than $850 billion and investors have raised more than $110 billion in taxpayers' money in corporate lawsuits. Most of the lawsuits and highest compensation amounts are in the field of the fossil industry. This uses the corporate lawsuit system to take action against climate protection measures. For example, the Swiss company AET is currently suing the Federal Republic of Germany for phasing out hard coal.

Investment protection: A problem for Germany

These actions are made possible by intergovernmental investment protection treaties, which allow investors to go to private arbitration tribunals. Germany has concluded most of these contracts, a total of 114. In addition, investors from Germany have filed the fourth-most lawsuits worldwide, while the Federal Republic itself has now been sued six times. Germany is thus a core country of the corporate lawsuit system.
All six lawsuits against Germany have taken place under the Energy Charter Treaty, an investment protection agreement in the energy sector that has generated more lawsuits than any other agreement. In the meantime, Germany, the EU and ten other countries have left the Energy Charter Treaty. After this important step, the withdrawing states must now conclude an agreement among themselves that excludes future lawsuits. PowerShift is strongly committed to this.

Our demands: No more corporate lawsuits

PowerShift requires:

• Termination of existing investment protection contracts: Germany has signed 114 of these treaties, more than any other country.
• No new free trade agreements with corporate lawsuits: Despite the promise of the traffic light coalition, there have so far been no initiatives to address the problem of corporate lawsuits. The EU continues to negotiate agreements such as CETA, which include corporate rights.

What we do: Together against corporate lawsuits

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