If you've never heard of investor-state dispute settlement, or ISDS, don't feel chagrined—but prepare to be gobsmacked. BuzzFeed on Sunday published the first in a four-part series on the "private, global super court," a 10,000-word piece by Chris Hamby that represents a year-and-a-half of reporting. On its face, ISDS sounds fairly sensible: It's a kind of global binding arbitration, what should be "a fair, neutral forum" where foreign corporations can take their grievances against a country where it does business—say, if a developing nation with a shaky legal system improperly seized a company's assets. And ISDS is pervasive, written into treaties like NAFTA and the Trans-Pacific Partnership (TPP) President Obama is pushing for. The reality as painted by Hamby is the opposite to the extreme.
He describes a court where the arbitrators "are largely elite Western corporate attorneys who have a vested interest in expanding the court’s authority," where the operations are often secret, where there's no public oversight, and where the decisions are as binding as if they came from the country's own top court. In effect, ISDS "empowers corporations to bend countries to their will" and some countries are so wary of its power they are willing to quickly settle cases rather than face it. What was for decades a "last resort" has become a "powerful tool" that, in one of the three cases Hamby spotlights, was used to erase a prison sentence handed to a UAE billionaire convicted in Egypt of corruption-relation charges. And when Congress votes on TPP, "it will be deciding on a massive expansion of ISDS," writes Hamby. Read Part I here. (Read more arbitration stories.)