What’s wrong with ISDS? Romania’s environment & history under attack
The latest example of what’s wrong with Investor-State Dispute Settlement (ISDS) – the privileged route to riches for foreign investors who can persuade a separate international court that they have been disadvantaged by a democratically-elected government – is a case being lodged by Canadian mining enterprise Gabriel Resources, which has filed a billion-dollar case against the Romanian government for blocking its plans to develop four open-cast gold mines.
Environmental campaigners claim that the mines would destroy four mountain tops and wipe out three villages in an effort to obtain 314 tons of gold and 1500 tons of silver in the town of Rosia Montana. The project has drawn fierce criticism from environmental and civil rights groups, who have been arguing that it will destroy ancient Roman sites and lead to ecological disaster.
Bizarrely, given the supposed purpose of ISDS – to protect foreign investors from discrimination – the body that Gabriel Resources helped set up to develop the mines is a partnership with a Romanian state-owned corporation! But because Gabriel Resources has already invested in the proposed project ($550 million of a proposed $1.5 billion construction budget), it has the right under a bilateral treaty between Romania and Canada to sue the Romanian government.
Many bilateral investment treaties between Canada and the USA were signed with Eastern European countries after the fall of communism. But Canada itself has suffered from the ISDS provisions in the North American Free Trade Agreement (NAFTA) with the USA and Mexico. Sujata Dey, trade campaigner for the Council of Canadians, says:
“Investor-state dispute settlement provisions are a Pandora’s box. Canada has suffered under NAFTA, where we are the most sued nation, and we will suffer under other trade agreements with these provisions. They give undue power to already powerful transnational corporations at the expense of environmental and human rights. We need a new approach to trade agreements and we need it now.”
As more and more ISDS cases are publicised, the whole idea of investor privilege will come under scrutiny and lose support. Trade agreements up for approval, like the Trans-Pacific Partnership, the Canada-EU deal (CETA) and the EU-US Transatlantic Trade and Investment Partnership (TTIP) will lose support.