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[mainiac]

Yeah that's a bit of an exaggeration.

[lijacote]

Yeah that's a bit of an exaggeration.

"Investor-state dispute settlement (ISDS) is an instrument of public international law, that grants an investor the right to use dispute settlement proceedings against a foreign government. Provisions for ISDS are contained in a number of bilateral investment treaties, in certain international trade treaties, such as the North American Free Trade Agreement (Chapter 11) and in international investment agreements, such as the Energy Charter Treaty. If an investor from one country (the "Home State") invests in another country (the "Host State"), both of which have agreed to ISDS, and the Host State violates the rights granted to the investor under public international law, then that investor may bring the matter before an arbitral tribunal." Wikipedia

TTIP, according to TTIPInfo, an activist organisation in Finland, would (freely translated)

"allow companies investing in Europe to sideline European courts in favour of supernational tribunals whenever they feel legislation protecting public health, the environment, or social rights is cutting into their profits."

(Independent) - In one case alone the US oil company Occidental Petroleum successfully sued the government of Ecuador for $1.8bn. A separate case claiming $6bn has also be filed. The tribunals are used to rule on disputes between nation states and aggrieved companies.

This is how they'll sideline national laws and democratic sovereignty (where that elusive creature may be found).

[Sheb]

I was not defending ISDS, on the contrary. I was just pointing that company can already look for redress in national courts.

However, your original sentence ("If a company fails to turn a profit in a country, they can sue.") wasn't correct. I'm fairly certain however you didn't actually mean that any company going bankrupt can sue for its god-given right to be profitable.

[mainiac]

case

I dont think that link points where you intend it to?
http://kluwerarbitrationblog.com/blog/2011/11/25/tecnimont-the-saga-continues-but-is-not-yet-over/

If the Ecaudor case is the one I think it is then isn't that the case of a national government illegally seizing property after the company failed to live up to some obligations?  I can understand why the company would be given partial damages in those circumstances.

[Reelya]

case

I dont think that link points where you intend it to?
http://kluwerarbitrationblog.com/blog/2011/11/25/tecnimont-the-saga-continues-but-is-not-yet-over/

If the Ecaudor case is the one I think it is then isn't that the case of a national government illegally seizing property after the company failed to live up to some obligations?  I can understand why the company would be given partial damages in those circumstances.

There's an extra /t/ on the end of lijacote's link which causes it to redirect to something else.

http://kluwerarbitrationblog.com/blog/2012/12/19/icsids-largest-award-in-history-an-overview-of-occidental-petroleum-corporation-v-the-republic-of-ecuador/

Here it says, that the original contract was actually illegal under Ecuadorian law. Interestingly, the same tribunal that awarded damages actually cut the damages sought by the company, because they had entered into the original agreement while all the time knowing it was illegal to start with. Should you be rewarded for loss of income when what you were doing to make the income was illegal in the first place?

So it's not cut and dried in either direction. The company did something it knew was illegal, to exploit resources in a foreign country, that they had no right to exploit. Then, the government took control of the resources, but also took some of the companies equipment. Since the oil didn't belong to the company (and they had no legal right to be there digging it up) the company should have only been recompensed for the equipment at most, not $2 billion dollars. If you go around digging up things that don't belong to you, you should not be bailed out when those things are taken away.

[lijacote]

case

I dont think that link points where you intend it to?
http://kluwerarbitrationblog.com/blog/2011/11/25/tecnimont-the-saga-continues-but-is-not-yet-over/

If the Ecaudor case is the one I think it is then isn't that the case of a national government illegally seizing property after the company failed to live up to some obligations?  I can understand why the company would be given partial damages in those circumstances.

You're right. My mistake. Here's where I intended to link. "ICSID’s Largest Award in History: An Overview of Occidental Petroleum Corporation v the Republic of Ecuador"

I was not defending ISDS, on the contrary. I was just pointing that company can already look for redress in national courts.

However, your original sentence ("If a company fails to turn a profit in a country, they can sue.") wasn't correct. I'm fairly certain however you didn't actually mean that any company going bankrupt can sue for its god-given right to be profitable.

My comment was ambiguous in the sense that it could be interpreted in various ways, this is true, and I'll try not to be as ambiguous.

Regardless of whatever justification you might use for any of the actions here, state sovereignty is damaged further (we already have Greece/Syriza not being able to fulfill its mandate of reversing austerity within the confines of the troika and the eurozone, as one very current example). Rather than state sovereignty, we get corporate sovereignty. Rather than public, private. Considering the history of companies as outgrowths of the monarchic state (IIRC), this is rather funny.

[mainiac]

state sovereignty is damaged further

The government of Ecuador entered into a contract.  While the company in question was guilty of wrongdoing, Ecuador was in breach of contract.

[lijacote]

state sovereignty is damaged further

The government of Ecuador entered into a contract.  While the company in question was guilty of wrongdoing, Ecuador was in breach of contract.

Much like the "governments" of European states will enter into a contract. What government, and with whose permission, with what mandate? TTIP negotiations continue behind closed doors and there's much secrecy. If an official behind closed doors signs a contract the contents of which are secret to the public (as much as they aren't leaked), does this mean that the public has agreed to this contract? What if the official was one of the types that was actually voted by the public into office, does that then mean that the public has signed to this address? No.

This must be the democracy that so many people are enamored with. Fetishised, euphemistic, and rather limited for the demos.

[Reelya]

The government was not involved in the contract. The contract was between two corporation, and it broke the existing law. It's explained in detail in the article. There is nowhere where it says the government first approved, then changed it's mind.

On 19 October, 2000, Oxy sought to explore ways to finance the expansion of its operations in Ecuador and diversify and reduce its exposure in the country. Coincidentally, Alberta Energy Corporation Ltd (“AEC”) was looking to expand its investment in Ecuador. In order to further these goals, Oxy and AEC entered into a Farmout Agreement where AEC acquired a 40% economic interest in Block 15 in return for certain capital contributions. The transfer, however, violated both the Participation Contract and Ecuadorian law, which required ministerial approval.

If you breach a contract, you lose the contract. Plain and simple. Contract law.

[mainiac]

The government was not involved in the contract. The contract was between two corporation, and it broke the existing law.

I was talking about the other contract, the agreement of Ecuador to accept international arbitration according to rules that it was fully aware of at the time in cases such as this.  It was because of that agreement that the facility went up.

Ask yourself, do you think that companies should be able to appropriate the property of foreign investors without cause?

[Sheb]

I also wouldn't call the Syriza affair a "loss of sovereignty". Syriza is free to do whatever it wants. But the rest of Europe is also free to not give them money anymore if they do something else. I think the austerity policy were a stupid idea, but it's not an issue of loss of sovereignty.

[Reelya]

without cause

They breached the original contract. Hence the contract is null and void, and they no longer had any rights to the oil in block 15. Honor your contracts and you won't be breached.

[mainiac]

Hence they have no rights in the matter anymore.

Not even remotely true in the least.

I also wouldn't call the Syriza affair a "loss of sovereignty". Syriza is free to do whatever it wants. But the rest of Europe is also free to not give them money anymore if they do something else. I think the austerity policy were a stupid idea, but it's not an issue of loss of sovereignty.

It's blackmail, Syriza is free to do what it wants but Europe is threatening to ignore international custom and impose cruel and unusual punishment upon Greece unless Greece acts like a good little bitch.

[Sheb]

What's 'international custom' in this case?

[mainiac]

What's 'international custom' in this case?

Either treat Greece like the US treated Mexico in the 90s or treat Greece like the US treated California seven years ago.

If the US had treated Mexico like Greece is being treated Mexico would have said "Fuck you too, buddy" and just unilaterally defaulted and gone to the IMF and World Bank for an adjustment program.  If the US had treated California like Greece is being treated California would have sued and received damages through the Federal courts.  The California case is such an outlandish scenario though that it's almost absurd to contemplate and I certainly can't provide an examples.  And that's the thing, people thought that Greece being mistreated like this would be an outlandish scenario.  Germany overturned the founding principles of the Euro to protect a few banks. It's amazingly inefficient, a few bank nationalizations and tens of billions of dollars would have solved the banking side of things.