Stop Multinationals from Extracting Pandemic Profits from Public Purse

Covid-19 has led governments around the world to make vital interventions to prevent market failures: renationalising failing privatised services, forcing private hospitals to care for Covid patients, converting manufacturing to produce Protective Personal Equipment. Many of these decisions have been key to preventing more deaths and protecting the public.

Yet the Investor State Dispute Settlement Mechanism (ISDS), built into many Free Trade Deals, allows multinationals to sue governments for exactly these sorts of interventions and force the taxpayer to pay for impeded future corporate profits.

To effectively respond to crises, governments need to have all options on the table. But ISDS seeks to put our democratically elected officials in policy handcuffs: to dissuade them from placing the public interest ahead of private profits with the looming threat of lawsuits and shady legal action.

Law firms who make millions off of such disputes are already holding webinars to line up a wave of devastating ISDS cases resulting from the pandemic.

To prevent this, Public Services International is supporting a letter to governments calling for urgent action to prevent strained public budgets from being further undermined by huge corporate pay-outs.

Instead we must terminate investment agreements with ISDS and promote people-first policy practices.

Will your organisation sign on to this letter?

Background

Globally, governments are taking actions to save lives, stem the spread of the pandemic, protect jobs, counter economic disaster and ensure peoples’ basic needs are met. The level of these actions has been unprecedented in modern times and the need for these actions has been clear.

But the expansive reach of the ISDS system — which allows multinational corporations to sue governments in secretive tribunals outside of the national legal system for unlimited taxpayer money — could open such critical government actions to claims for millions in compensation from foreign investors.

Law firms are already advising corporations on potential ISDS claims (for example, Shoosmiths, Alston & Bird, ReedSmith). Economics and human rights experts are calling for a moratorium.

Following discussions on global civil society email listserves on investment, the organisational sign on letter has been drafted, accompanied by an annex giving more technical detail.