Rosia Montana, an omen for TTIP

[Jack Rabbit]

35. Incorrect, my good sir

From the article:

This week, Gabriel Resources officially announced that it filed a request for arbitration against Romania before the World Bank's investment dispute settlement centre. According to the company, “through its actions and inactions, Romania has blocked and prevented implementation of the project, effectively depriving Gabriel entirely of the value of its investments”.

Gabriel is able to bring Romania in front of an arbitration tribunal because of bilateral trade treaties Romania signed with Canada (where the company is listed on the stock exchange) and the UK (it is not yet clear whether the company is able to use the treaty with the UK because it has a subsidiary in infamous tax haven Jersey or for another reason).

According to information publicised by Gabriel Resources in Romania, the company has up until now invested half a billion US dollars in the country. Yet in an interview given in 2013, Jonathan Henry, the president and CEO of Gabriel said the company would seek as much as $4 billion in damages from Romania if the project does not go ahead.

Today, Henry does not give out any information about the total amount sought by the company. But if his old threat is true, this would be one of the biggest amounts ever claimed by a corporation from a state in arbitration. As of 2012, the biggest amount awarded under the World Bank's dispute settlement instrument was the $1.77 billion that Ecuador was asked to pay to Occidental Petroleum Corporation.

Romania's total healthcare budget is usually around $1.5 billion annually, meaning that losing the arbitration case could potentially cost Romania the equivalent of three years of state health services. An enormous price to pay for the sake of Gabriel's shareholders, the beneficiaries of an eventual arbitration victory by Gabriel. Almost half of the cases settled via the World Bank's instrument are won by corporations.

Gabriel simply should not have this recourse. No corporation should. To have such a recourse is an end run around government by and for the people. The Romanian government partnered with Gabriel, but the corporation demonstrated that it could not perform its end of the bargain in responsible way (unless you think there's anything responsible about making people sick from cyanide poisoning).

My point is that there should be no ISDS panel of any kind. The government should have the authority to halt any private project that harms the environment or the health of the population. If the investors have a recourse, then they should replace the dodgy corporate officers who misled the Romanian government into thinking nothing could go wrong, or were upfront about it and $weetened the pot so that bureaucrats would approve a deal they knew was bad for the people of Romania. In that case, the investors have an obligation to make sure that the corporation is run by more ethical officers, and the people, in this case the Romanian people, have an obligation to make sure the government is also administrated by people of a higher ethical character as well.

In no case should the corporation, i.e., the corporate officers, be allowed to even think about recovering lost profits because they were not allowed to continue a project that was a menace to public health. Those people created the problem, and they are the one who should pay for it. The people of the nation, whether Romanians or Greeks, should not have to suffer for deals made in their name by corrupt politicians and crooked businessmen. If the people are susceptible to cyanide poisoning or malnourishment as a result of austerity imposed by the powerful, they cannot be held responsible for that. It is a consequence of being made of flesh and blood, unlike a corporation, which exists only on paper.