Report exposes bias in tribunals used by foreign investors to sue governments

The Australian Government is being sued for damages by the Philip Morris tobacco company in an international tribunal over its tobacco plain packaging legislation. The Government is opposing the inclusion of investor rights to sue in the Trans Pacific Partnership (TPPA) negotiations which begin in New Zealand on December 2.

A study by the Amsterdam-based Transnational Institute shows how these tribunals, made up of investment lawyers who can also be advocates, lack independence and result in decisions which favour business at the expense of health, environment and other public interest legislation.

The report reveals:

• 15 arbitrators have decided 55% of all known investment-treaty disputes

• law firms have encourage legal cases, often against countries in crisis, fuelling a twelve-fold increase in cases since 1996 by multinationals against states for any action deemed to have unfairly affected corporate profits

• exorbitant legal and arbitration costs averaging over US$8 million per investor-state dispute, and exceeding US$30 million in some cases, paid for by ordinary taxpayers in countries where many don't even have access to basic services

• lobbying by arbitration law firms and elite arbitrators that have succeeded in stopping necessary reform of investment agreements in the EU and US in the last four years
The report argues that the alleged fairness and independence of international investment arbitration is an illusion and puts forward new arguments why governments should refuse to include investor rights to sue in trade agreements like the TPPA.

See the report at