$114 billion has been awarded to investors in secret corporate courts, new data reveals

Posted on June 06, 2024
Chimneys from a coal plant

Investor-state dispute settlement (ISDS) clauses in trade and investment agreements allow companies to take legal action against states and their climate protection measures. New data reveals the staggering scale of corporate claims brought against countries led by the fossil fuel industry.

The Transnational Institute, the Trade Justice Movement and PowerShift have jointly launched a new ‘Global ISDS tracker’ website which tells how secretive corporate tribunals are delaying climate action and threatening our future. New data analysis reveals that to date a staggering $114 billion public money has been awarded to investors with the largest sums going to the fossil fuel industry.

"The data shows that there is a consistent trend of foreign investors using these corporate courts to sue countries that implement environmental policy. And it is mostly investors located in the USA and Europe suing countries in Latin America and Africa." says Lucía Bárcena, Trade Policy Officer at the Transnational Institute.

The data also illustrates a consistent increase in fossil fuel-related cases over the past three decades, amounting to 261 in total. Among the top 10 most expensive awarded cases, 8 are related to fossil fuels. Fossil fuels are also on average much larger than non-fossil fuel claims and can devastate public budgets - sharply increasing the likelihood that a government gives in to the investor's demands. With fossil fuel assets worth trillions protected by ISDS, the threat of arbitration poses a serious obstacle to the transition to a fossil-free world.

“The data backs up what we’ve been saying for years: ISDS is the secret weapon for fossil fuel companies against climate laws. Corporate courts are also used to threaten governments not to give into popular local or national demands for climate action. This needs to be put to an end and the data shows reform is urgently needed.” says Tom Wills, Director of the Trade Justice Movement.

”The injustice is glaringly obvious: countries in the Global South are the main victims of ISDS, while corporations from Europe and North America benefit. It transfers public money into the hands of a few corporations and their shareholders. This has to stop. It is high time for countries everywhere to leave the treaties that include ISDS so that they can build a fair and sustainable future.” says Fabian Flues, Researcher and Campaigner at PowerShift

"In this challenging moment, when there is more climate action needed from States, it is unbearable to have corporate courts that can wash all the efforts away. Getting rid of investment protection agreements that protect fossil fuel companies and mining companies should be our number one priority in the next few years." says Lucía Bárcena, Trade Policy Officer at the Transnational Institute.

Read related Guardian article.


About the Global ISDS tracker website

The Global ISDS Tracker website with an incorporated database contains information on all publicly known 1362 ISDS cases. The information is updated annually. The database allows you to navigate through the complexities of ISDS cases, shedding light on the urgent need for reform and accountability in global investment practices. The Global ISDS tracker is a joint initiative from the Transnational Institute, the Trade Justice Movement and PowerShift.