It’s been dubbed litigation terrorism – an investor protection regime that’s stalling climate action and instead paying polluters. On this episode of Horsehair Wigs, we’re talking about investor state dispute settlement clauses or ISDS mechanisms with Stéphanie Caligara, a French qualified lawyer and consultant with the Global Legal Action Network. Stéphanie focuses on environmental and climate litigation, human rights and corporate accountability. She also has experience in investment treaty arbitration.

Stephanie has been watching carefully a situation unfold in Colombia where Glencore, the Swiss multinational mining company, is using the Switzerland-Colombia bilateral investment treaty – and the ISDS mechanism contained within it - to demand compensation money from the Colombian government for not being able to carry out all its mining activities at the largest coal mine in Latin America. The El Cerrejón mine has been marred by alleged human and environmental abuses, with multiple indigenous groups and people in the region affected. The mine accounts for .7% of Colombia’s GDP, and thousands of direct and indirect jobs.

Stephanie explains what ISDS is and talks about the various claims by Glencore against Colombia. She speaks about people in the region of the mine feeling like they’re being hostage by Glencore, while the Colombian government has signalled its intention to move away from fossil fuels.

Globally, the fossil fuel and mining industries have already been awarded over 100 billion dollars as a result of ISDS mechanisms, leaving a trail of destruction in their wake. Stephanie talks about how the investment protections are having a “chilling effect” on states and often lead to a dilution or a stalling of climate policy. ISDS was originally designed to protect investors in countries where the judiciary of a country was not independent of state. But Stephanie says she doesn’t believe there is merit for such a clause when it comes to fossil fuel extraction and efforts by government to incorporate greener policies.

One country that has recently been successful in facing down the ISDS mechanism is Romania. It defeated a closely watched investor state dispute settlement case worth US$4.4 billion plus interest brought by a Canadian mining company over the denial of an environmental permit for a gold and silver project in an area, now recognised as a UNESCO world heritage site. Stephanie talks about the case and how it can serve as a beacon of hope for other states beholden to ISDS cases.

Presented and produced by Evelyn McClafferty.

With thanks to our donors: Irish Aid.

Note: The views and opinions expressed in this episode do not necessarily represent those of IRLI or Irish Aid.