Want the lowdown on what the Rules for Corporations campaign is all about? Then look no further. Here is your concise guide to what we’re fighting for and why.
1. What are our demands?
Multinational corporations have far too much power. They are increasingly richer than countries. They avoid tax. And they use their power to strong arm governments into letting them have their way. They also often act with impunity, getting away with human rights abuses – and even murder – by virtue of their status as multinationals. Our campaign seeks to redress this injustice in two ways:
- Stop ISDS.
Short for ‘Investor-State-Dispute-Settlement’, ISDS is an obscure parallel justice system only accessible to multinationals and the super-rich. This system is used to threaten governments that dare to stand up to them. Claims can be worth up to billions of euros. Getting rid of ISDS once and for all would weaken corporations’ ability to bully governments into letting them dictate policy.
- Binding global rules for multinational corporations
We need to change the fact that corporations can abuse their sheer power and complex structures to avoid being held to account. Voluntary standards are not working as corporations continue to commit abuses without facing justice. That is why we are demanding a strong UN Binding Treaty on multinational corporations and human rights. A strong set of global rules could allow communities from the global south win the right to take corporations to court in places like France, Germany and the UK. We also want stronger EU and national rules like the French Law on Vigilance which forces companies to ensure human rights abuses are not being committed in their supply chain
2. Why are we are making these two demands together?
Ending ISDS and securing binding rules for corporations are two sides of the same coin. Corporations have too much power. To change that, we need to both take power away from them and positively give it to the communities that suffer from the rights violations they commit.
Campaigners are sometimes accused of being too negative – always talking about what we want to stop instead of supporting positive alternatives. Not this campaign! We not only reject the unfair system of ISDS but support a new global system that actually puts people first. We do not oppose ISDS because of some opposition to supranational justice, we oppose it because it is unfair. International systems of justice are a good thing if they put the rights of people first. Corporations, however, do not need even more international privileges and protections. What they need are rules.
By campaigning on both of these issues together, we also expose the hypocrisy of our governments. They currently back a discredited and unfair system of “justice” for corporations defending their profits while denying real justice to the victims of real human rights abuses.
3. What is the UN Binding Treaty?
The UN Binding Treaty on Business and Human Rights is already being negotiated – primarily at annual negotiations held in Geneva every October. There is even already a Zero Draft of the treaty (which does not go quite far enough). The talks around the treaty are a very complex process but core to it is the idea that we should be ending the impunity of corporations. This means that it’s vital that there is a mechanism for allowing victims of corporate abuses to pursue justice in the corporation’s country of origin.
Unfortunately, EU countries are at the forefront of the effort to make sure there is no Binding Treaty at all. The very same countries that back reviving legally binding protections for corporations in the form of ISDS are rejecting legally binding mechanisms to hold them to account. This is double standards.
4. Why is ISDS so dangerous?
ISDS gives investors a way of stopping any rule changes they don’t like. This is because the system allows them to claim compensation if governments violate their “legitimate expectations”. This is a really broad phrase that has been used to justify damaging cases against governments trying to do the right thing.
For example, government policies that have been challenged using ISDS include:
- Regulating pollution levels on a coal power station
- Introducing health warnings on cigarettes
- Declaring a moratorium on fracking
- Halting a mine that would have destroyed whole communities
- Raising the minimum wage
- Freezing water tariffs to help the poor
- Introducing a public health system
5. How do we stop ISDS?
The good news is that ISDS is already dying. Countries around the world are already rejecting this unfair system. Ecuador, South Africa and Indonesia have already ripped up unfair investment agreements that include ISDS. If EU countries do the same, it will probably be enough to end the system for good. Most existing ISDS agreements are the competency of member states individually. But new deals are increasingly being negotiated at EU level – like the EU-Singapore Investment Protection Agreement. So we need both member states and the EU as a whole to reject ISDS.
The biggest threat is the effort by supporters of ISDS to revive the system under a different name. The EU is currently engaged in negotiations to expand ISDS into a permanent Multilateral Investment Court. Though such a Court would have some minor improvements over classic ISDS in terms of transparency (ISDS is currently a highly secretive system), the underlying system is going to be the same. We cannot let them get away with relaunching ISDS in this way. Our politicians must realise that a permanent court would be making matters worse not better. We need to stop ISDS completely and forever.