The Next Turn | 19 July 2016
Celebrating Uruguay’s ISDS victory over Philip Morris ?
A private ISDS tribunal has just ruled in favor of Uruguay over its tobacco labeling legislation against which tobacco giant Philip Morris filed an Investor-State Dispute Settlement (ISDS) lawsuit claiming that the legislation harms its brands and profits (link)
For those who are unfamiliar with the case, here’s a quick refresher :
The country won in a 2-to-1 split decision and Philip Morris was ordered to pay the court fees as well. Australia, which won a similar fight against the same corporate giant earlier (they won over some technicality), had to pay for its legal fees. The rumored amount of $50 million Australia has shelled out merely highlights the one-sided nature of the ISDS mechanism : only a corporation can sue a government but not the other way around. The best possible outcome for a sovereign government is that it wins the case and only gets to pay the legal costs.
For one thing, it was a 2-to-1 decision — 2 sided with Uruguay and 1 with the corporation. It could have been easily 2-to-1 in favor of the corporation, or worse.
A more circumspect reflection on the outcome of this legal case goes back to the deeper and more fundamental question one should be asking : why do we allow our government — and our entire legal system — to be subjected to overriding powers coming from private, conflict-of-interest-laced secret tribunals over our ability to set rules on our own health, environmental and other public interests ?
By way of analogy, let’s say your government and someone from outside of your country decide that you and your community should be engaged in a game of Russian roulette. You pick a representative for the game.
The trigger was pulled and it drew a blank. You and the community are now overjoyed that the person involved in the game did not die.
While it is indeed a relief that the person did not die, the more pertinent question is : why do we even allow this game to take place in the first place, regardless of the chance of a fatal outcome.
In Russian roulette your chance of a horizontal outcome (you come out horizontally) is 1 in 6. Your chance of losing an ISDS arbitration is much higher.
