PHM-Exch> Call for ISDS Moratorium During COVID-19 Crisis and Response

[Claudio Schuftan]

From: comercioredes at gmail.com


We call on the world community for an immediate moratorium on all
arbitration claims by private corporations against governments
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Email <ccsi at law.columbia.edu>

Extraordinary times call for extraordinary measures. The COVID-19 pandemic
is the greatest threat to humanity since World War II. The fate of billions
of people, and potentially millions of deaths, hang in the balance,
particularly in the developing world. The United Nations Secretary General
has recognized that COVID-19 is “the fight of a generation.” For this
reason, the global community has taken and continues to take extraordinary
and necessary actions. More than half of the world economy is locked down
and related economic fallout generates major stress in fragile economies.
Economic hardship is on the rise. Much of the world economy is in lockdown
and 191 countries have closed schools, affecting 91% of all learners
globally. The ILO is predicting an enormous number of job losses, while
people in many countries are falling into poverty, reversing a decade or
more of progress in poverty reduction. The G20 countries are implementing a
standstill on sovereign debt servicing
<https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=f81c6862a8&e=823ceafb15>
in
2020 for the world’s poorest countries, and further extraordinary relief
will surely come after that.

In this regard, we call on the world community for an *IMMEDIATE MORATORIUM* on
all arbitration claims by private corporations against governments using
international investment treaties, and a *PERMANENT RESTRICTION *on all
arbitration claims related to government measures targeting health,
economic, and social dimensions of the pandemic and its effects. These
investor-state cases
<https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=ebbc6b8384&e=823ceafb15>
(often referred to as “ISDS” cases) empower foreign private companies to
challenge government actions that affect narrow corporate interests, and
often result in large payouts, sometimes of billions of dollars, to these
companies for alleged lost profits. These suits pose an immediate danger to
the ability of developing nations, and the global community as a whole, to
confront the COVID-19 challenge.

There are three reasons for an immediate moratorium.

   - First, the necessary business closures and other emergency responses
   will create unprecedented changes in the business environment that will
   likely trigger a massive number of unjustified claims. Foreign investors
   will claim that they have lost their expected profits. And this will be
   true, but for the vital reason that every business in society will face an
   unprecedented situation. Governments have the duty to protect their
   citizens and to stop the pandemic without fear of lawsuits by foreign-owned
   businesses or foreign shareholders; typically these are claims that cannot
   even be brought against governments by their own domestic companies.


   - Second, governments must direct their attention to the urgent control
   of the COVID-19 crisis, and not be distracted by foreign companies and
   shareholders who might take advantage of the crisis using vague investment
   treaty standards to press their claims.


   - Third, awards against governments, frequently in the millions or
   billions of dollars, which can represent sizable percentages of
   governments’ budgets
   <https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=3812ea50e9&e=823ceafb15>,
   would weigh heavily against the dire budget crises facing developing
   countries in the context of the COVID-19 pandemic. As the International
   Monetary Fund has warned, the economic downturn in 2020 will be the most
   severe since the Great Depression. Governments must ensure that ISDS does
   not deepen the inevitable fiscal crisis.

We therefore call for a complete moratorium on all ISDS claims until the
pandemic has passed and governments have agreed on principles to ensure
that future arbitration cases will not hinder countries' good faith
recovery efforts. These principles should recognize the full and clear
scope that governments have, and are required, to take all appropriate
actions to save lives and fight global emergencies, even when the result is
a loss of profits or business opportunities, including by foreign
investors. Furthermore, they should ensure that any damages awarded in ISDS
cases should respect the dire financial situation facing governments
following the COVID-19 emergency. Short of these clear principles, there
will be no basis for restarting ISDS processes. In addition, we call for an
ongoing restriction on ISDS claims related to measures taken during the
pandemic, including those targeting health, economic, or social dimensions
of the pandemic and its effects.

We call on individual countries to advance this effort, and the United
Nations and specialized agencies, the World Bank Group, the Organisation
for Economic Co-operation and Development, and other multilateral
organizations to implement it. We similarly call on all people of
conscience -- including lawyers who initiate and arbitrators who decide
these arbitration cases -- to put the lives of people ahead of corporate
interests at this dire moment facing humanity.



*Phil Bloomer*
Executive Director, Business & Human Rights Resource Centre

*Juan Pablo Bohoslavsky*
Former UN Independent Expert on Foreign Debt and Human Rights (2014-2020)

*Carlos Correa*
Executive Director, South Centre

*Olivier De Schutter*
UN Special Rapporteur on Extreme Poverty and Human Rights

*Kerry Kennedy*
President, Robert F. Kennedy Human Rights

*Jeffrey D. Sachs*
University Professor, Columbia University
Director, United Nations Sustainable Development Solutions Network

*H.E. María Fernanda Espinosa Garcés*
President of the 73rd Session, UN General Assembly (2018-2019); Ecuadorean
Minister of Foreign Affairs (2017-2018)

CCSI and partner organizations are working on potential legal solutions for
implementing this call. Further details will be made available *here*
<https://columbia.us6.list-manage.com/track/click?u=ab15cc1d53&id=5e2c325fca&e=823ceafb15>.
Please fill out the information *here*
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to
express interest in becoming a signatory to this letter.



T
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