Berlin, 17 September: Through billions of dollars in lawsuits, corporations and oligarchs are undermining the EU's sanctions policy against Russia, the European over-profit tax on energy companies, climate and environmental laws, and even national security. For this, they use their own parallel justice system and thus undermine democracy. Show that 10 new case studies, PowerShift, Friends of the Earth Europe, the European Trade Justice Coalition, SOMO, and the Transnational Institute.
A sensitive lawsuit against Germany can also be found among the case studies. She describes, as the oil and gas company Klesch Group, registered in the Jersey tax haven, is suing Denmark, Germany and the EU over the European excess profit tax for energy companies. Klesch uses ISDS to avoid paying his taxes. Germany was forbidden by the arbitral tribunal to collect the taxes in the first place, although the proceedings are still ongoing.
Termination of dangerous investment agreements.
Group lawsuits are based on outdated bilateral investment agreements (BITs) between EU states and non-EU states. About 1,000 such contracts are still in force. They include their own parallel corporate justice system (‘Investor-State Dispute Settlement Mechanism’, ISDS), which allows groups to circumvent national courts via private arbitration courts. Two new agreements with the ISDS mechanism will be submitted to the Bundestag for ratification in the coming months – the EU investment protection agreements with Singapore and Vietnam.
The authors of the study call on the EU and its Member States to terminate all relevant investment agreements and to remove ISDS from all future agreements.
“This parallel justice gives priority to private interests over the common good, undermines the rule of law and is incompatible with our democracy. It puts environmental protection and national security at risk and can cost taxpayers billions of dollars", criticises Fabian Flues of PowerShift.
Examples of how corporate lawsuits undermine democracy:
- Sanctions on Russia: Russian oligarch Mikhail Fridman uses ISDS to sue Luxembourg, which has frozen its assets over EU sanctions against Russia. Fridman is demanding a massive $16 billion compensation.
- Environmental protection I: Australian company Berkeley is demanding up to $1 billion from Spain. The Spanish Supreme Court had declared the licenses for a uranium mine invalid because of the violation of environmental regulations, as the dismantling would have left radioactive waste.
- Environmental protection II: The mining company Rio Tinto is using ISDS to pressure Serbia with a billion-dollar lawsuit. Rio Tinto wants to push through a toxic lithium mine that would destroy 22 villages and 2,000 hectares of fertile land and produce millions of tons of toxic waste.
- National security: The Chinese technology giant Huawei is complaining about Sweden's decision to protect its telecommunications infrastructure for reasons of national security to almost half a billion euros. Huawei has also threatened the Czech Republic and the UK with ISDS lawsuits and Germany is also at risk of being sued for its 5G policy.
Other examples:
- Shell and Eni v Nigeria: How Nigeria enforced oil licenses without profit sharing and averted corruption lawsuits.
- EcoDevelopment against Tanzania: The land robber who confiscated a Tanzanian plane.
- Suffolk and others against Portugal: The vulture funds that want to make cash with a bank failure.
- Andraous against the Netherlands: How to loot a pension fund and fight the liability lawsuit.
- InfraRed vs Colombia: The mutual fund that is suing for roadblocks and toll gains.
Background:
The German government wants to expand ISDS, while Germany is the country with the most bilateral investment protection agreements worldwide. German investors are among the most suing in the world and have already filed 87 arbitration lawsuits against other states. The German Government has described the German investment protection agreements as ‘obsolete in many respects’. denoted. Nevertheless, there is currently no effort to accept the outdated agreements. Instead, the German government plans to further expand ISDS by ratifying investment protection agreements with Singapore and Vietnam.
If you have any questions, please do not hesitate to contact:
- Fabian Flues, Trade and Investment Policy Officer at PowerShift, fabian.flues@power-shift.de, +49 (0)30 308 821 92
