Stop group lawsuits - No parallel justice for investors

Stops corporate lawsuits to protect the climate

With multi-billion-dollar lawsuits before non-transparent arbitration courts, corporations are enriching themselves with taxpayers' money and hindering ambitious climate policy. PowerShift is committed to ending these investor arbitral tribunals.

Example: RWE and Uniper against the Netherlands

Shortly after the Dutch government passed a coal phase-out law to meet 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 Their lawsuits, which have since been withdrawn, were filed in private arbitration courts.

Arbitration tribunals as a “miracle tool” for corporations

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 ‘miracle means’ of arbitration. Arbitration tribunals offer clear advantages to these investors:

Proceedings are conducted by three arbitrators, two of whom can be determined 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 balance play no role in these procedures.

More than 1,300 corporate lawsuits worldwide

Worldwide, there are now over 1300 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 filed corporate lawsuits for more than $110 billion in taxpayers' money. 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. The Swiss company AET is currently suing the Federal Republic of Germany over the coal phase-out.

Investment protection: A problem for Germany

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.
All six lawsuits against Germany have taken place under the Energy Charter Treaty, an energy investment agreement 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, it is now imperative that the exiting states conclude an agreement with each other that excludes future lawsuits. PowerShift is strongly committed to this.

Our demands: End of group 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 litigants: 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 contain group rights.

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.