50 years of ISDS

Today, Both ENDS, Friends of the Earth Netherland, TNI and SOMO launch a report (Dutch only) that analyses the damage that ISDS has caused over the past 50 years. The report shows what alternatives exist and how investment treaties could also protect environmental and human rights.

The report is being presented in the run-up to government review of Dutch BITs. In total, the Netherlands has 90 investment treaties.

A global power tool for multinationals, created and popularised by the Netherlands

Exactly 50 years ago, the Netherlands started ISDS – a system by which companies can sue states outside of national courts. The Netherlands first applied ISDS to an investment treaty with Indonesia in 1968. Many countries followed the Dutch example. There are now more than 3,000 treaties with ISDS clauses worldwide.

Protection

ISDS is often part of a so-called Bilateral Investment Treaty (BIT): a treaty between two countries which regulates the protection of foreign investors. A BIT lists only the rights of the foreign investor but contains nothing binding on the duties and responsibilities of that investor.

Political means to power

International investment treaties and ISDS clauses give multinational corporations means to significant political power. A government can be served with an ISDS claim when multinationals believe that government decisions and new legislation could threaten their investments, possibly resulting in lower profits. Claims can also be made against regulations that protect citizens, such as labour rights and food safety standards, or measures that protect the climate and the environment.

Threatening effect

The threatening effect of ISDS clauses can halt or mitigate social and environmental policy. Countries are often unable to cope with the intimidating legal strategies used by multinationals.

Read the publication “50 years of ISDS” (50 jaar ISDS, only in Dutch, see download below) or the English article Fifty years of ISDS: more than $US 100 billion claimed via the Netherlands.