Realist, not conformist analysis of the latest financial, business and political news

The Case For ISDS And Screwing Over Governments In Private, Secret, Courts

We have an international legal system which allows companies to take governments off to private and secret courts. To over-ride, using the mere fatuity of contracts and the law, democratic decisions. According to peeps like George Monbiot and Global Justice Now this is an appalling state of affairs. This shall not stand they say, we must make sure that ISDS doesn’t exist.

Yeah, right:

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] The government of Zambia has defended its efforts to kick London-listed copper miner Vedanta Resources out of the country, in an escalating row over tax and alleged underinvestment. The southern African nation’s national mining vehicle, ZCCM, is seeking to have Vedanta subsidiary Konkola Copper Mines (KCM), its partner in the country’s largest copper mine, placed into liquidation. [/perfectpullquote] [perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]The Zambian government, including its president, Edgar Lungu, has accused KCM of underpayment of dividends and taxes, as well as underinvestment in the mine, a crucial plank in Zambia’s copper-fuelled economy. It appointed a liquidator to run the company in May.[/perfectpullquote]

Now, of course, we absolutely believe the government of Zambia, just as we do that of Zimbabwe and Tanzania. They never, ever, do anything at all that is contrary to either their own laws or contracts. They’re as pure as the peeps in DR Congo in this regard.

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””] The Indian-owned company said it had “fulfilled its commitments” in Zambia and was concerned about the “apparent misuse of the legal process” by ZCCM. It said it had paid $2.3bn (£1.9bn) in wages, $1.2bn (£1bn) in power bills and $700m (£576m) in taxes and royalties since 2006, as well as $72m (£59m) in dividends. It admitted KCM had made local suppliers wait for payment but blamed this on the financial stresses caused by the tripling of power costs, tax increases, import restrictions on copper concentrate and the government’s failure to pay VAT refunds. [/perfectpullquote]

The company is of course lying through its teeth. That’s what international capitalists do when faced with the righteous actions of democratic decisions.

But, you know, let’s just check, eh? Who actually is right or wrong here? We did actually have a case in Russia where crooks forged documents to nick the tax refunds of a company – Bill Browder was involved I think? So, why not someone independent of both sides who can look at facts and decide?

[perfectpullquote align=”full” bordertop=”false” cite=”” link=”” color=”” class=”” size=””]Vedanta responded earlier this week by seeking to have the case referred to arbitration in South Africa.[/perfectpullquote]

Ahh, that’s that ISDS stuff, the secret and private international courts set up to deny democratic mandates. Pig Dogs, how could they? If government righteously decides to steal a mine then why shouldn’t they? Who should justly stand in their way?

And now to really explain the point of ISDS. So that people be willing to open new mines knowing that they won’t be stolen once working. Or, of course, righteously be liquidated if they steal by not paying their taxes.

0 0 votes
Article Rating
Notify of
Newest Most Voted
Inline Feedbacks
View all comments
2 years ago

The moral of this tale is “Don’t invest in Africa.” But we all knew this already.

2 years ago

ZCCM, one of the most corrupt and inefficient companies I have ever dealt with.

Would love your thoughts, please comment.x