https://www.bilaterals.org/?billion-dollar-exposure-investor
"This report was commissioned by Friends of the Earth Europe Justicia Ambiental
- Friends of the Earth Mozambique, Milieudefensie - Friends of the Earth the
Netherlands, and Friends of the Earth US and written by The Columbia Center on
Sustainable Investment.
Key takeaways:
* Mozambique is endowed with extensive untapped natural resources, particularly
gas and coal. The country’s gamble on fossil fuel-based economic growth comes
with significant economic risks and crowds out investments in the country’s
enormous renewable energy potential.
* Mozambique faces a substantial economic risk due to its exposure to
investor-state dispute settlement (ISDS) claims by foreign investors in its
coal, oil, and gas sectors. The investment protections in the country’s
international investment agreements and contracts, combined with ISDS, expose
Mozambique to multi-billion-dollar financial liabilities. Even conservative
estimations show that potential ISDS liabilities from oil and gas projects
would cover almost a decade of Mozambique’s government expenditures for SDGs.
* Mozambique’s international investment agreements and publicly available oil,
gas, and coal contracts allow foreign investors to bypass the national judicial
system and bring multi-billion-dollar ISDS claims against Mozambique. Such
claims can result in significant costs for the country, and they also have a
considerable chilling effect on any new public-interest regulation in areas
such as health, environment, community rights or labor protections. ISDS can
undermine attempts to adopt meaningful legislation to transition away from
fossil fuels and achieve sustainable development goals. This regime can
therefore contribute to locking the country into a high-carbon economy.
* In addition, multiple stabilization clauses in the analyzed contracts lock
the operations into specific legal and fiscal regimes for the duration of the
contracts. Stabilization clauses protect investments from unexpected regulatory
changes or new fiscal rules. If a host state does introduce such changes,
stabilization clauses allow investors to demand measures or compensation that
would ensure their same profitability absent such changes. These clauses thus
exacerbate the limits to – and chilling effect on – states’ public interest
regulation.
* Mozambique and other countries can take actions to remove ISDS from their
contracts and treaties, replacing the mechanism with alternative dispute
resolution mechanisms. They can also take steps to terminate investment
agreements in force. Home countries of Mozambique’s foreign investors have a
responsibility to support such action, especially as they, themselves, remove
ISDS from their own treaties."
Via John Rooke and Tess.
Cheers,
*** Xanni ***
--
mailto:xanni@xanadu.net Andrew Pam
http://xanadu.com.au/ Chief Scientist, Xanadu
https://glasswings.com.au/ Partner, Glass Wings
https://sericyb.com.au/ Manager, Serious Cybernetics
