The crisis of legitimacy in international investment agreements and investor-state dispute settlement

Click here to access article by Jane Kelsey, Professor of Law at the University of Auckland, from Stop Investor-State Dispute Settlement. 

The ISDS (investor-state dispute settlement) section is installed in all neoliberal trade agreements, and are the main weapon used against nations wanting to protect their populations from the predatory actions of corporations of the US-led Empire. The legitimacy of this weapon is being increasingly examined and questioned. Kelsy summarizes her report in these paragraphs:

The legitimation crisis facing IIAs [international investment agreements] is entering a new phase. Capital exporting states have regrouped to defend an investment regime that serves their corporate interests. Large developing countries are promoting alternatives that offer a new balance between their offensive and defensive interests. Governments in rich and poor countries continue to face potentially crippling investment disputes that are often designed to intimidate their regulatory decisions. Boutique law firms and third-party funders are intent on defending a lucrative source of income.

As the turbulence in the global economy and backlash against neoliberalism continues, opposition to the international investment regime and ISDS from the left seems destined to grow. A system in which rules that privilege capital are enforced through a biased extra-territorial dispute process cannot be fixed. The South African remedy that brings the disputes back into the domestic jurisdiction may be the best of the current alternatives. For many on the left, however, that would presage a return to the more traditional contest over the authority of the legislative and judicial branches of the state in relation to capital.