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Can you perceive our democratic process operates? It could be similar to this. The public votes for MPs. They vote on bills. Should a majority is secured, the bills become law. Legislation is maintained by the courts. That's it. However, that used to be how it once functioned. No longer.

The Advent of Shadow Tribunals

Today, international firms, along with the oligarchs who own them, can sue governments for the laws they pass, at offshore tribunals staffed by commercial attorneys. Such disputes take place in secret. Differing from national judiciaries, these tribunals provide no avenue for appeal or judicial review. The general public are unable to file a case to them, nor can our government, or even businesses operating from this country. They are open exclusively to entities registered abroad.

If a tribunal finds that a law or policy might diminish the corporation’s expected profits, it has the power to grant damages of vast sums, potentially billions.

These sums are based not on tangible damages but funds the tribunal officials determine the company could potentially have made. The government might be compelled to rescind the measure. It becomes deterred from enacting future policies in that area, for fear of facing litigation.

A System Running Rampant

Unprecedented levels of disputes are being filed, as corporations observe each other, and investment funds finance suits for a share of a portion of the takings. The outcome? Sovereignty and popular rule are turning into too costly.

The system is known as “investor-state dispute settlement” (ISDS). The rationale it is allowed to supersede national legislation and the choices enacted by elected bodies is that this stipulation has been incorporated – without public consent, and frequently under a climate of total confidentiality – into trade treaties.

A Concrete Example: The UK Coalmine

A year ago, activists achieved a major legal triumph at the High Court. The justice found that plans to excavate the first major coal mine in the UK for a generation, in Cumbria, had been wrongly permitted by the previous government, which had endorsed the bizarre claim that the mine would have zero effect on national carbon targets. The incoming administration subsequently revoked the permission the Tories had approved. Now, this victory faces being overturned by an offshore tribunal answering to no one but the entities bringing the case.

In August, a firm whose beneficial owners reside in the Cayman Islands filed a lawsuit challenging the UK government. Last week a tribunal in Washington DC was established to consider the case.

The company is litigating against the UK for the profits it could have earned if the mine had received permission to proceed. Citizens have no clear indication how much this could amount to. Which individual is representing it against the British government? A sitting MP, and ex-law officer in the outgoing administration, the self-proclaimed patriot Sir Geoffrey Cox. The government passes a law, the national judiciary validates it, then a international entity contests it through an unaccountable offshore tribunal, and a elected official acts on its behalf.

An Oligarch's Challenge

On the same day that the court on the mining lawsuit was appointed, we learned 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 is highly possible that he may employ the tribunal to challenge the penalties the UK levied against him subsequent to the Russian aggression. He has already filed a claim against another European state for this reason, demanding sixteen billion dollars: an amount representing half nation's annual revenue. Included in the legal team on his side? a prominent lawyer, spouse of the ex-UK leader.

International law scholars believe that the EU’s procrastination in utilising seized Russian assets as security for its loan to Ukraine is due to Belgium’s fear that it could be taken to court in the ISDS tribunals, under a investment pact. This remarkable, unaccountable authority over democratic administrations might be preventing the funds Ukraine urgently requires.

Empty Promises and Mounting Threats

We were assured that these events wouldn’t happen. Previously, a government leader, advocating for the largest and riskiest of all such treaties, stated: “We’ve signed trade agreement upon trade deal and there has not been a problem in the past.” An adviser on this issue accused critics of “alarmism … the fact is, ISDS does not affect the UK much”. The general impression seemed to be that exclusively weaker states had to worry about ISDS claims. Warnings that “when companies begin to understand the power they now possess, they will shift their focus from the poorer states to the developed economies” were dismissed with widespread derision.

That prediction has now materialised. In the current period, fossil fuel and resource corporations have initiated a unprecedented number of cases against nations across the economic spectrum, opposing – similar to the Whitehaven project – government attempts to prevent climate breakdown. Companies have so far won $114bn by using ISDS, of which fossil fuel companies have been awarded eighty-four billion dollars. That equates to the combined GDP