The Justice System That Lets Executives Escape Their Crimes
The other side of the argument, submitted without endorsement, and, for simplicity&#x27;s sake in writing a comment that is slightly researched but still just an HN comment, with an unapologetic focus on the US:<p>* ISDS isn&#x27;t a &quot;secret court&quot;, but rather an instrument used in treaties, the way a venue or severability clause is used in normal civil contracts. Different investment treaties have different ISDS clauses with different rules. ISDS clauses are a big part of what make investment treaties &quot;investment treaties&quot;: they&#x27;re the enforcement part of the agreement.<p>* ISDS clauses don&#x27;t preempt or even involve criminal law. In what appear to be literally all cases, they&#x27;re handled by arbitrators with no formal judicial powers. Those arbitration panels are empowered exclusively to award damages, payable by the host state, to investors. If you look at who the arbitrators are in ISDS cases, they&#x27;re random industry and academic people. None of them have any ability to &quot;wipe sentences away&quot;.<p>* The US is undefeated in ISDS claims by foreign investors (<i>only</i> foreign investors have recourse to ISDS; a US investor cannot use the ISDS against the US). No person anywhere has ever won an award of money from the US through ISDS. Obviously, nobody has escaped a US criminal sentence through ISDS, because ISDS can&#x27;t be used to do that, but even if it could, nobody has, because nobody has won an ISDS claim against the US.<p>* The reason that nobody wins ISDS claims against the US is that ISDS --- as the argument goes --- is primarily designed to bake into treaty language the norms of US and Western European civil law, particularly with regards to private property and contract enforceability. US investors have a slightly better than 50&#x2F;50 average in winning ISDS cases, and make up about 20% of all such cases, which is proportional to the amount of foreign investing we do.<p>* Cases decided under ISDS, at least those with US jurisdiction, are appealable to US courts. You&#x27;ll find some of those when you go look for ISDS cases.<p>(End argument that I am repeating without endorsing, begin poorly-informed commentary).<p>The most important ISDS clause pertaining to the US and the one under which every case against the US has been made is NAFTA. You can read the NAFTA ISDS clause here; it&#x27;s pretty straightforward:<p><a href="https:&#x2F;&#x2F;www.nafta-sec-alena.org&#x2F;Home&#x2F;Legal-Texts&#x2F;North-American-Free-Trade-Agreement?mvid=1&amp;secid=539c50ef-51c1-489b-808b-9e20c9872d25" rel="nofollow">https:&#x2F;&#x2F;www.nafta-sec-alena.org&#x2F;Home&#x2F;Legal-Texts&#x2F;North-Ameri...</a><p>Skip forward to &quot;Article 1122: Consent to Arbitration&quot; and read downward. The investor gets to appoint an arbitrator, the state gets to appoint its own, and then both parties agree on a third presiding arbitrator. If the two parties can&#x27;t agree on a presiding arbitrator, the secretary-general of (I think?) the OECD picks them.<p>At least with respect to NAFTA, there appears to be legal precedent that ISDS cannot be used to challenge environmental protection laws: that taxes, zoning, and regulation pertaining to environmental controls cannot be challenged as unfair takings from investors. I have no idea how forceful that precedent is.<p>I spent 30 minutes clicking around the UN&#x27;s UNCTAD ISDS tracker site, which will make this shadowy world court controlling everything in the world with its shadowy clutches seem real, real boring <i>toute suite</i>:<p><a href="http:&#x2F;&#x2F;investmentpolicyhub.unctad.org&#x2F;ISDS" rel="nofollow">http:&#x2F;&#x2F;investmentpolicyhub.unctad.org&#x2F;ISDS</a><p>For instance, I went looking for the case in which Buzzfeed claims a Trump partner got their criminal sentence in Egypt vacated by an ISDS tribunal:<p><a href="http:&#x2F;&#x2F;investmentpolicyhub.unctad.org&#x2F;ISDS&#x2F;CountryCases&#x2F;62?partyRole=2" rel="nofollow">http:&#x2F;&#x2F;investmentpolicyhub.unctad.org&#x2F;ISDS&#x2F;CountryCases&#x2F;62?p...</a><p>Maybe you can find it?<p>* Egypt would have to be the respondent state<p>* The case would presumably have to be decided in favor of the investor (there aren&#x27;t many of those)<p>* You&#x27;d think the case would make mention of criminal law somewhere in the decision (there&#x27;s only one of those, and it pertains to a fine, not a custodial sentence)<p>* Some principal of that case would somehow be associated with Donald Trump (no principal of any case I can find associated with Egypt has principals who show up in Google searches along with Trump).<p>Not that Trump matters here; his is a name clearly added by Buzzfeed to juice up the story.<p>I don&#x27;t know whether ISDS is a bad thing, or is instead one of those sort of common-sense things that happen to be deployed in the middle of (often legitimate) controversies; like, most large-scale foreign fraud or environmental damage cases are going to involve some nominal form of &quot;investment&quot;, so the investment dispute processes of our treaties are always going to be at play, and so on.<p>What I do feel comfortable saying is that Buzzfeed --- which has often acquitted itself pretty well in reporting controversies over the last few years --- is hyping this issue up <i>way</i> past the point where people are getting an accurate picture from their reporting.