UN Warned Corporate Courts Could Thwart Climate Efforts

Campaigners are urging reform of an obscure system that allows coal, oil and gas companies to sue governments if climate policies hit their profits.

Little known but ubiquitous corporate courts will increasingly hamstring climate efforts unless governments take urgent action to reform them, campaigners warn.

The EU is locking horns with a bloc of countries led by the US and Japan over a mechanism included in more than 3,000 trade deals, ahead of UN talks in Vienna in October.

Investor state dispute settlement (ISDS) is a system of private courts that allows foreign investors to bypass domestic courts and sue governments in cases where national policies hurt their profits. It raises the prospect of fossil fuel corporations claiming billions of dollars in compensation for climate legislation enacted under the Paris Agreement, including carbon taxes or initiatives to phase out fossil fuels.

“The ISDS system has given rise to an alarming number of claims against environmental measures, which are already the fastest growing trigger for dispute,” said Amandine Van Den Berghe, a lawyer with Client Earth.

“Amid this climate emergency, we call on governments to respect their international commitments, and push for a deep and systemic reform of ISDS, so that these mechanisms are not able to undermine efforts to save the planet.”

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