Published on 7th June 2019 by

What happens when a multinational company doesn’t like a law? It challenges it before an international tribunal with the proceedings held in camera. Billions are at stake for taxpayers in the power struggle between states and multinationals.

The Wallonia region in Belgium triggered a Europe-wide crisis in the fall of 2016 by refusing to sign the CETA free trade agreement with Canada, as millions of EU citizens took to the streets to protest against the agreement. The CETA negotiations had thrown the spotlight onto the system of private arbitration courts. It allows multinational corporations to sue countries for enormous damage settlements if their environmental, social or health policies affect their actual or even expected profits. The bill for this is paid by the taxpayer, which the state was originally supposed to protect. Why are there private arbitration courts at all? They exist mainly due to free trade agreements: In order to attract investments from large corporations, states conclude trade agreements with each other. These include special clauses that allow companies to appeal to private arbitration tribunals. The arbitration proceedings take place in camera and are conducted by specialized commercial lawyers from large law firms. As a result of globalization, the number of arbitration proceedings is increasing all over the world – in strong economies as well as in developing countries and emerging markets. But these are having a devastating effect on fundamental citizens’ rights such as health, environmental protection and labor laws and give rise to the question as to whether people want this this sort of globalization at all. This documentary examines three case studies to illustrate the power of the international arbitration tribunals: Canadian company Cosigo sued the Colombian state for 16 billion euros in damages before a private arbitration tribunal; in Germany, Swedish energy provider Vattenfall is demanding 4.7 billion Euros in compensation for the country’s nuclear phase-out; and the US company Renco, whose lead smelters poison the environment, wants 800 million Euros in compensation from Peru. Many states whose sovereignty is threatened are now finally waking up to the danger. But is it perhaps already too late to do anything about the seemingly over-mighty corporations?

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