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How Wealthy Corporations Use Investment Agreements to Extract Millions From Developing Countries
Key Excerpts from Article on Website of ScheerPost
Posted: February 19th, 2024
https://scheerpost.com/2024/01/25/how-wealthy-corporations-u...
When Rafael Correa entered Ecuador’s presidency in 2007, the nation faced an opportunity and a challenge. Ecuador’s economy depended on oil, and global crude prices were near a record high. Much of the oil was extracted by foreign companies ... as prices surged more wealth began flowing overseas. Soon after taking office, Correa increased a recently enacted windfall tax on oil companies. The idea was to use the tax as leverage to extract better terms from the companies. Within months, two oil companies working as partners—the independent Anglo-French firm Perenco and Burlington Resources, a subsidiary of ConocoPhillips—ceased paying the tax and sued the government through a system of international tribunals known as investor state dispute settlements, or ISDS. The system allows foreign investors to sue governments before tribunals outside the jurisdiction of national courts. Perenco and Burlington [convinced] arbitrators in two separate tribunals to award the companies more than $800 million. Critics say the ISDS system gives corporations an exclusive, parallel justice system that elevates foreign interests above human rights and environmental concerns. The vast majority of cases have been brought by companies based in North America or Europe against governments in Latin America, Africa and Asia, prompting many critics to liken the ISDS system to a form of market-based colonialism that continues to extract wealth from the Global South.
Note: According to the analysis in the article, fossil fuel companies and investors filed one in five of 1,720 claims since the 1970s, and "have been awarded at least $82.8 billion in compensation from governments." For more along these lines, see concise summaries of deeply revealing news articles on corporate corruption and income inequality from reliable major media sources.
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