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What is your understand our system of government works? It could be along the lines of this. Citizens choose MPs. They debate and pass bills. Should a majority is achieved, the bills pass into law. The law are enforced by the courts. That's it. Well, that’s how it operated in the past. No longer.

The Emergence of Offshore Arbitration Panels

In the modern era, international firms, along with the oligarchs that control them, are able to litigate against elected administrations for the policies they pass, at secret arbitration panels composed of commercial attorneys. Such disputes are conducted in secret. In contrast to domestic courts, these bodies grant no right of appeal or oversight by judges. The general public are barred from bringing a case to them, just as our government, including businesses headquartered in this country. Access is granted exclusively to entities based overseas.

When a secret court determines that a law or policy may compromise the corporation’s expected profits, it has the power to grant compensation of hundreds of millions of pounds, potentially billions.

These awards are based not on tangible damages but money the arbitrators conclude the company would perhaps have made. The administration could be forced to rescind the measure. It will be hesitant to passing future laws in that area, worried about facing litigation.

A System Growing Exponentially

Unprecedented levels of cases are being brought, as corporations observe each other, and investment funds bankroll lawsuits in return for a cut of the awards. The result? National sovereignty and democracy are now unaffordable.

The process is known as “investor-state dispute settlement” (ISDS). The rationale it is permitted to override a country's own laws and the choices enacted by elected bodies is that this provision has been inserted – without public consent, and often in conditions of extreme secrecy – into international trade agreements.

A Specific Example: The UK Coal Mine

A year ago, environmental campaigners secured a significant win at the High Court. The presiding officer ruled that proposals to excavate the first deep coalmine in the UK for 30 years, in Cumbria, had been unlawfully approved by the Conservative government, which had agreed to the bizarre claim that the mine would have had no impact on our carbon budgets. The new government then withdrew the consent the previous administration had approved. Currently, this legal outcome is under threat by an secret arbitration panel answering to no one but the corporations bringing the case.

Last August, a company whose ultimate owners are located in the tax haven lodged a claim versus the UK government. Last week a tribunal in the US capital was established to consider the case.

The company is suing the UK for the money it would have generated if the mine had received permission to proceed. Citizens have no idea how much this might be. Which individual is representing it in opposition to the UK administration? A sitting MP, and previous senior legal advisor in the previous government, that great patriot Geoffrey Cox. The state makes a decision, the high court upholds it, then a international entity disputes it through an undemocratic private court, and a member of our parliament works for its behalf.

The Russian Case

On the same day that the tribunal on the coal mine dispute was established, information emerged from a parliamentary answer that the UK is subject to further litigation under ISDS by a Russian oligarch, an oligarch. We know nothing of the case to date, but it seems likely that he will utilise the ISDS mechanism to challenge the penalties the UK levied against him after the Russian aggression. He has already initiated proceedings against a small nation for this reason, demanding sixteen billion dollars: equivalent to half of nation's yearly income. Part of the legal team acting for him in that case? Cherie Blair, wife of the ex-UK leader.

International law scholars contend that the EU’s delay in using frozen oligarchs' funds as guarantee for its financial support package arises from Belgium’s fear that it could be sued in the secret arbitration panels, under a investment pact. This remarkable, secretive influence over elected governments may be obstructing the finance Ukraine desperately needs.

Empty Promises and Mounting Threats

We were assured that these scenarios were not possible. Previously, a former prime minister, championing the most significant and hazardous of all these agreements, told us: “Britain has agreed to trade agreement after trade deal and we have never seen a issue in the past.” An adviser on this topic labelled critics of “exaggeration … the truth is, ISDS has little impact on the UK much”. The prevailing narrative appeared to be that only poorer nations had to worry about these lawsuits. Predictions that “as corporations grasp the power bestowed upon them, they will shift their focus from the poorer states to the strong ones” were greeted by widespread derision.

That prediction has now materialised. In the current period, oil and gas and mining firms have initiated a historic level of claims against nations across the economic spectrum, contesting – as in the case of the Whitehaven project – state efforts to prevent environmental catastrophe. Corporations have thus far won vast sums via ISDS, of which fossil fuel companies have been awarded eighty-four billion dollars. That represents the combined GDP