Talk:Investor–state dispute settlement/Archives/2017

Rubbish sources and unsubstantiated claims do not belong in this article

This text is not substantiated by any source in the article:

• "The practice was made widely known through the Philip Morris v. Uruguay case, where the tobacco company Philip Morris sued Uruguay after having enacted strict laws aimed at promoting public health."

No source says that ISDS became "widely known" through this case. It's ludicrous to say that it was.

The text below cites two rubbish sources ("The International Journal of Socialist Renewal" + "Centre for Research on Globalization") and one source which doesn't support the text[1]:

• "ISDS has been criticized because the United States has never lost any of its ISDS cases, and that the system is biased to favor American companies and American trade over other Western countries, and Western countries over the rest of the world."

The "Centre for Research on Globalization" is a crackpot conspiracy site, see this[2]. "The International Journal of Socialist Renewal" looks like a crackpot blog with a website template from the 90s. Snooganssnoogans (talk) 15:58, 4 June 2017 (UTC)

I agree with the removals. Neither the "International Journal of Socialist Renewal" nor the Centre for Research on Globalization are reliable sources. The Tim Worstall Forbes "contributor blog" post is also unacceptable - Worstall is not an economist, a trade expert, a diplomat, a historian, a trade lawyer, etc., and those Forbes contributor blogs are essentially user-generated with no editorial controls. This stuff is bad and should go.

The 2011 working paper (Gallagher/Shrestha) Tufts Global Development and Environment Institute working paper is an OK source, but it does not support the content for which it is cited. I've moved it down to the body of the article and changed the text so it actually matches up with what the working paper says. Neutrality^talk 19:42, 4 June 2017 (UTC)

Seems you are right, however several of the statements are correct even if the sources used could have been chosen better. I will look around for some higher quality sources that can be used instead. Carl Fredrik ^talk 19:56, 4 June 2017 (UTC)

One of the concerns here is also that the lede should reflect the content of the article (per WP:lede guidelines), which the aforementioned text does not. New sources and content shouldn't just be dropped straight into the lede. Snooganssnoogans (talk) 19:59, 4 June 2017 (UTC)

Two suggested better sources to use

These two studies seem interesting and noteworthy: they come to different conclusions about fairness/unfairness between developed/developing nations:

• Susan D. Franck, Development and Outcomes of Investment Treaty Arbitration, Harvard International Law Journal, Vol. 50 (2009):

The legitimacy of investment treaty arbitration is a matter of heated debate. Asserting that arbitration is unfairly tilted toward the developed world, some countries have withdrawn from World Bank dispute resolution bodies or are taking steps to eliminate arbitration. In order to assess whether investment arbitration is the equivalent of tossing a two-headed coin to resolve investment disputes, this article explores the role of development status in arbitration outcome. It first presents descriptive, quantitative research about the developmental background of the presiding arbitrators who exert particular control over the arbitration process. The article then assesses how (1) the development status of the respondent state, (2) the development status of the presiding arbitrator, and (3) the interaction of these variables affect the outcome of investment arbitration. The results demonstrate that, at the macro level, development status does not have a statistically significant relationship with outcome. This suggests that the investment treaty arbitration system, as a whole, functions fairly and that the eradication or radical overhaul of the arbitration process is unnecessary. The existence of two statistically significant simple effects – namely that tribunals with presiding arbitrators from the developing world made smaller awards against developed states in particular circumstances – suggests that particularized reform could enhance the procedural integrity of arbitration. Irrespective of whether future research replicates the results, reforms targeted to redress possible imbalance in the system have the potential to enhance procedural justice and the perceived legitimacy of arbitration in an area with profound political and economic implications.

• Gus Van Harten, Arbitrator Behaviour in Asymmetrical Adjudication: An Empirical Study of Investment Treaty Arbitration, Osgoode Hall Law Journal, Vol. 50 (2012). Gives opposite conclusion:

Unlike earlier studies, the study examines trends in legal interpretation instead of case outcomes and finds statistically significant evidence that arbitrators favour: (1) the position of claimants over respondent states and (2) the position of claimants from major Western capital-exporting states over claimants from other states. There is a range of possible explanations for the results and further inferences are required to connect the observed trends to rationales for systemic bias. The key finding is that the observed trends exist and that they are unlikely to be explained by chance. This gives tentative empirical evidence of cause for concern about the use of arbitration in this context.

(Van Harten also responds to Franck directly at p. 254).

--Neutrality^talk 20:03, 4 June 2017 (UTC)

Debates and Criticisms - Jargon / legalise

Apologies in advance for my critique of the writing, but this section is a bit difficult to understand, specifically but not limited to this section:

"Proponents of ISDS argue that states and their governments are bound by public international law, which includes bilateral investment treaties and international investment agreements. Under this view, the "right to regulate" has not been "lost" by the states, but on the contrary has been consciously designed by states not to allow for breach of investor's protected rights. The accession to instruments of public international law guaranteeing such rights is an exercise of democratic constitutional power and binds the acceding state, even if its future government changes."

First off, there are quotes in there, but who is being quoted and from where? Do we have a citation for this? Further the use of the word 'accession' is confusing to me; do countries pass treaties where they access to public international law in part or in whole? Further the implication is that the states in question never had the right to regulate and thus could not lose something they never had; the bilateral investment treaties and international investment agreements are public international law which is a higher order than local state regulation. Overall it seems to imply that investor's protected rights (for which there is no definition given nor Wikipedia entry for) trump local law via the mechanism of public international law. To me, if more questions are asked than answered in reading a section, there's a dearth of teaching going on.

Again, sorry to all the lawyers out there for whom this makes perfect sense, but a certain amount of simplification would be appreciated so that complicated topics can be easily understood by the lay public. — Preceding unsigned comment added by BlaineGond (talk • contribs) 03:17, 30 September 2016 (UTC) BlaineGond (talk) 14:46, 31 May 2017 (UTC)

As an example of plain English, here's the way a professional writer in the New York Times explained it:

The provision that Bilcon used — known as investor-state dispute settlement — gives a tribunal of private sector lawyers the power to rule on whether countries treat foreign investors fairly. It’s a tool that critics, including labor unions and environmental groups, say puts billions of taxpayer dollars at risk by taking power away from democratically elected governments and putting it in the hands of lawyers and multinational corporations. A Nafta Battleground on the Shores of Canada, By ANA SWANSON, New York Times, OCT. 16, 2017

I came to his entry to find out more about investor-state dispute settlements. I was disappointed to find that, in addition to the jargon, it was heavily biased in favor of the corporate interests. For example, under "Debates and Criticism" https://en.wikipedia.org/wiki/Investor-state_dispute_settlement#Regulatory_capacity the entry reduces the arguments of the "opponents" to footnotes, without explaining their arguments, and gives at least 10 times as much space in that section to rebutting the opponents as it gives to the opponents' arguments themselves. I guarantee you that Joseph Stiglitz and Jeffrey Sachs can explain the opposition arguments clearly, in language that ordinary non-specialist readers (the Wikipedia target audience) can understand. For example:

https://www.democracynow.org/2015/10/27/joseph_stiglitz_under_tpp_polluters_could

Joseph Stiglitz: Under TPP, Polluters Could Sue U.S. for Setting Carbon Emissions Limits

Nobel Prize-winning economist and Columbia University professor Joseph Stiglitz warns about the dangers of the TPP, the Trans-Pacific Partnership. “We know we’re going to need regulations to restrict the emissions of carbon,” Stiglitz said. “But under these provisions, corporations can sue the government, including the American government, by the way, so it’s all the governments in the TPP can be sued for the loss of profits as a result of the regulations that restrict their ability to emit carbon emissions that lead to global warming.”

https://www.huffingtonpost.com/jeffrey-sachs/tpp-flawed-vote-congress_b_8534286.html

Why the TPP Is Too Flawed for a 'Yes' Vote in Congress

The most egregious parts of the agreement are the exorbitant investor powers implicit in the Investor-State Dispute Settlement system as well as the unjustified expansion of copyright and patent coverage. We've seen this show before. Corporations are already using ISDS provisions in existing trade and investment agreements to harass governments in order to frustrate regulations and judicial decisions that negatively impact the companies' interests.

The system proposed in the TPP is a dangerous and unnecessary grant of power to investors and a blow to the judicial systems of all the signatory countries. And as in earlier trade agreements, the United States has pushed through overly strong intellectual property rights that strengthen the aggressive pricing practices of big pharma and unnecessarily extend the copyright protections far beyond their social usefulness.

These arguments should have gone into the entry, not been reduced to a footnote. Why didn't they? If somebody wants to work on this, let me know.--Nbauman (talk) 19:17, 17 October 2017 (UTC)

Removed disputed position presented as fact

The following heavily biased section was removed for the lede:

ISDS is in the mutual interest of the host country and foreign investors, as it protects foreign investors and enforces their property rights, thus encouraging them to invest in the host country. In the absence of ISDS, foreign investors would be less likely to invest in a given country, because of the uncertain status of their property rights and due to the tendency of countries to discriminate against foreign firms.

Especially the first sentence is highly controversial and is disputed by members of the generel public, the business press and academia:

• Financial Times — EU’s uphill battle to create a multilateral investment court
• Financial Times — Business groups fire warning shot over Nafta shake-up
• Financial Times — Globalisation goes on without those who want to get off
• Financial Times — ISDS is unsuited to meet today’s global challenges
• Financial Times — Arbitration on trial: the US and UK’s fear of the supranational
• Financial Times — European small businesses under the threat of ISDS
• Financial Times — Politicising investment makes the world poorer China and the US are feeding an insidious form of crony capitalism
• Columbia Global Reports — Shadow Courts, The Tribunals that Rule Global Trade

Please refrain from reinserting such passages in such a blatantly WP:NPOV-fashion. I'm ashamed I didn't notice the addition until after several months.Carl Fredrik ^talk 23:10, 16 October 2017 (UTC)

References

Please explain what part of the sentences are contradicted by those sources. Do the sources disagree with the basic logic of ISDS (I'm not aware of academic opponents or studies of ISDS that do)? Do the sources say that ISDS does not spur investment (I'm not aware of academic opponents or studies that do)? This is extremely lazy. None of the the text in the Wikipedia article claims that there are no critics or criticism of ISDS or specific versions of ISDS (which is the only thing you seem to demonstrate here). Snooganssnoogans (talk) 23:57, 16 October 2017 (UTC)

Yes, they oppose precisely what you cite as "the basic logic", and fervently oppose the idea that ISDS is beneficial for developing nations. It is frankly rediculous to propose that no academics oppose ISDS — as there are academics who oppose the very notion of comparative advantage as an argument for free trade, which is the idea that underlies ISDS. That is without even going into specific issues with ISDS, such as the arbitrary nature of the clauses that mention "fair and equitable treatment" and whatnot.

Your point that the article includes criticism argues against your additions, because for the lede to summarize the article body that criticism would need to be included. I'm not saying that we shouldn't include that proponents suggest ISDS is mutually benefitial, but with people on all levels of the debate arguing against ISDS, and a rather loud debate raging, we can't simply ignore it. For what its worth the current default position among academics and debaters seems to be one of being against ISDS rather than being for it.Carl Fredrik ^talk 07:07, 17 October 2017 (UTC)

You appear extremely confused about what the text actually says and what actual academics say. Your understanding of the academic debate on trade and the comparative advantage, which you opted to bring up, is deeply misinformed. Not only is there a consensus among economists of the benefits of trade and accuracy of the comparative advantage, but that has zero to do with ISDS per se. So the misunderstanding is multi-layered. If you want to make the article better, add text that accurately reflects RS (in the past, you've added conspiracy sites and leftwing loon websites to substantiate your uninformed views about the subject), don't delete text and then run to the talk page with vague claims and a laundry list of sources that mention critiques of ISDS while not having anything to do with the text that was deleted. As I said, and as you have not been arsed to rebut, academic opponents of ISDS do not dispute the text that was removed. Snooganssnoogans (talk) 10:11, 17 October 2017 (UTC)

Disagreeing is not being misinformed, and I stand by my previous comment, and do not agree that anything I said there is incorrect. You present no arguments or sources beyond alluding to "consensus", while I have presented sources, and at least one authoritative academic source. Ad hominem arguments are not in the spirit of Wikipedia and I suggest you refrain from using them in the future. Either you bring forth sources or refrain from engaging in this page. Criticizing the editor and not the source is contrary to how Wikipedia works, and if sources give prominence to critique of ISDS it is not at all relevant that you think them to be misinformed. What I added back 5 months ago is not what I've added now, and of those sources only one was objectionable, and absolutely not "loony". The only reason I haven't gone back and rewritten that addition is a lack of time.

However, the addition you made is simply in violation of WP:NPOV, only giving positive effects of ISDS.

Some additional sources that are less than positive to ISDS:

• A Corporate Veto on Health Policy? Global Constitutionalism and Investor-State Dispute Settlement, Hawkins et al.,Journal of Health Politics, Policy and Law

and a quite interesting 3 year investigative piece by the journalism arm of:

• Buzzfeed News — The Court that Rules the World.

Once again, there are a wealth of sources, academic and lay which dispute that ISDS are beneficial to developing countries.

Carl Fredrik ^talk 12:30, 17 October 2017 (UTC)

I have never disputed that there are critiques of ISDS (why is this so hard to understand?). What I'm disputing is that those critiques reject the basic logic of ISDS and contradict research showing that ISDS increases investment. When you copy-paste links to various critiques, you're not addressing anything that relates to what we're talking about. This is akin to someone disputing that "Hillary Clinton won the Democratic Party" and then proceeding to post links of people voicing their disagreement with Clinton's policies: the two are completely unrelated. As for you and ad hominems, it was you that brought up your unrelated and uninformed fringe views about trade. I explicitly mentioned that free trade as a concept was irrelevant to ISDS, but noted that your views on the topic reject the consensus among economists since you decided to bring it up to bolster your case. That you're still defending the loony sources that you brought to bear in our last dispute indicates either bad faith or just straight-up incompetence. Snooganssnoogans (talk) 12:51, 17 October 2017 (UTC)

Firstly, critics do oppose the underlying principle of ISDS being a net positive, as increased investment comes at the cost of increased corruption, decreased sovereignty and even disputing that ISDS would increase investment, as it would occur anyway. For an in depth discussion of this and various other criticisms this see the Columbia Reports book I linked above.

Second, the point is not that you don't oppose it, but that your addition didn't even alude to any less than positive effects of ISDS.

And third, how is free trade unrelated? Opposition to the principle of comparative advantage often means opposition to foreign investment. If ISDS exist to promote foreign investment, how does that not directly relate to free markets? James Galbraith springs to mind as one such critic of free trade. Carl Fredrik ^talk 13:04, 17 October 2017 (UTC)

I would point out that in Wikipedia, under WP:RS and other policies and guidelines, the question we have to decide is not whether Carl Fredrik or Snooganssnoogans is right about whether ISDS increases investment or whether it's a net positive. It's what WP:RSs say about ISDS. WP:WEIGHT says: "Neutrality requires that each article or other page in the mainspace fairly represents all significant viewpoints that have been published by reliable sources, in proportion to the prominence of each viewpoint in the published, reliable sources." The New York Times, and the Guardian, are clearly WP:RS, and Nobel laureates like Joe Stiglitz are also clearly WP:RS. Their viewpoints on ISDS should be represented in this entry. I don't think they are. And I agree with Carl Fredrik that the paragraph seems to be opinion presented as fact. --Nbauman (talk) 19:35, 17 October 2017 (UTC)

Please quote Stiglitz or any RS that contradict that ISDS increases investment in the host country. That's all I'm asking. Actual specific critiques that actually address what the disputed text said. Snooganssnoogans (talk) 19:43, 17 October 2017 (UTC)

The controversial statement is not that ISDS increases investment, but that this is mutually beneficial — as it brings with it other costs such as corruption, environmental neglect, and decreased sovereignty. Whether increased investment even without ISDS is a net positive is also debatable, and for that you just have to reach for the comparative advantage article here on Wikipedia.

However I can and will provide you with quotes, even though it is far more fitting to simply direct you to the Columbia Reports book I linked above. Quoting is generally weak when the entire paper or article is about the subject at hand — especially as they can be taken out of context and tend to give undue weight towards specific individuals who are famous for other things and who strew small snippets of opinion on a great many things. Just give me some time and I will provide more than enough material to rewrite the lede. Carl Fredrik ^talk 19:54, 17 October 2017 (UTC)

In order to keep that text in the lead, you would have to demonstrate that the consensus of WP:RS agree to each of (1) ISDS is in the mutual interest of the host country and foreign investors, (2) because it protects foreign investors and enforces their property rights, (3) thus encouraging them to invest in the host country. (4) In the absence of ISDS, foreign investors would be less likely to invest in a given country, (5) because of the uncertain status of their property rights and (6) due to the tendency of countries to discriminate against foreign firms.

First you have to demonstrate that (1) ISDS is in the mutual interest of the host country and foreign investors. I know about ISDS mostly from its effect on health care https://www.ncbi.nlm.nih.gov/pubmed?term=Investor-state+dispute+settlement&cmd=DetailsSearch&log$=activity If for example ISDS prevents the host country from using accepted, effective tobacco control measures like requiring graphic warnings on cigarette packages, and if it prevents regulations of environmental toxins, pharaceuticals, worker safety, dangerous products, etc., then a WP:RS might reasonably conclude that ISDS is not in the interest of the host country. --Nbauman (talk) 01:08, 18 October 2017 (UTC)

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