Only foreign investors can sue countries in ISDS. So, all ISDS awards involve a transfer of public money from a country to one or more foreign investors.
One way to assess who benefits from ISDS is by examining the types and sizes of foreign investors that received money in ISDS awards. I and Pavel Malysheuski, a civil/ commercial litigation lawyer, examined this question.
We tracked amounts awarded in all known cases to the spring of 2014. We found 45 awards for over US$10 million. We did not include 31 awards for less than $10 million since the total awarded in those cases was relatively small, less than $200 million in total.
In the 45 cases, about USD$5 billion in total was awarded to foreign investors. Adding pre-award (as opposed to less controversial post-award) interest, about USD$6.5 billion in total was awarded.
What types and sizes of foreign investors were awarded this money?
- About 64% was awarded to companies with over $10 billion in annual revenue.
- About 29% was awarded to companies with $1 billion to $10 billion in annual revenue or to individuals with over $100 million in net wealth.
- About 7% was awarded to companies with less than $1 billion in annual revenue or to individuals with less than $100 million in net wealth.
These findings indicate that to date the primary beneficiaries of ordered financial transfers in ISDS awards have been large or extra-large companies and very wealthy individuals (aka tycoons). The figures are approximate and descriptive of amounts awarded sizes in past cases.
|Type of foreign investor||Size of foreign investor||No. of awards (of over $10 million)||Total awarded, raw sums only||% of total awarded, raw sums only||Total awarded, with pre-award interest||% of total awarded, with pre-award interest|
|Extra-large company||>$10 billion in ann. rev.||19||$3.218 billion||63.9%||$4.178 billion||64.3%|
|Large company||>$1 billion and <$10 billion in ann. rev.||10||$590 million||11.7%||$756 million||11.6%|
|Medium or small company||<$1 billion or <$100 million in ann. rev.||7 (incl. 5 where DU for ann. rev||$184 million||3.7%||$219 million||3.4%|
|Very wealthy individual||>$100 million in net wealth||4||$896 million||17.8%||$1.060 million||16.3%|
|Other individual||<$100 million in net wealth||5 (incl.3 where DU for net wealth)||$151 million||3.0%||$288 million||4.4%|
|Totals||45||$5.039 billion||$6.501 billion|
The method of classifying of sizes of foreign investors was determined by Pavel Malysheuski (PM). PM coded claimant types and sizes based on award texts and online information from e.g. SEC, Google, Wikipedia, Bloomberg, and Reuters. Where data was unavailable on claimant size, a corporate claimant was classified as having less than $1 billion in annual revenue and an natural person was classified as having less than $100 million in net wealth. Cases involving multiple claimants were coded based on the largest or wealthiest member of the group including corporate and natural person owners of corporate claimants.
Data on size of awards was collected by Osgoode Hall Law School student research assistants, who collected information based on publicly-available English-language awards up to the spring of 2014. Pre-award interest was calculated based on information on raw sums awarded, pre-award interest rate, and relevant time period in award texts. All amounts were converted to USD based on exchange rates at the time of the award.
The award in France Telecom v Lebanon was not included due to the lack of a publicly-available award to verify reports of a $266 million award in favour of France Telecom, an extra-large company. The $17 million award in Metalclad v Mexico was treated as the raw sum amount and as the raw sum + pre-award interest amount due to the limited information in the award. The ordered adjustment for net taxes in the $29 million award in Achmea v Slovakia was not accounted for due to limited information in the award. Annulments and set asides of amounts awarded were not accounted for. All figures were rounded to the nearest million and are reported in USD.
The data does not include awards decided or becoming public after cut-offs in the spring of 2014. So, it does not include the $50 billion award in the Yukos-related claims against Russia in July 2014. Based on his inferences from online sources, PM classified the claimant size as very wealth individual in these cases, prior to the award being issued. However, this classification may be contentious, so it’s best for readers to make up their own minds about the claimant size in that case and to treat it as an outlier in relation to the descriptive data otherwise presented here.
The data for the above findings is as follows.
|Case name||Foreign investor type (company or natural person)||Foreign investor size||Amount, raw sum||Amount, with pre-award interest|
|Occidental v Ecuador No 2||C||X-large||1770 million||2358 million|
|EDF v Argentina||C||X-large||136 million||205 million|
|BG Group v Argentina||C||X-large||185 million||219 million|
|CMS v Argentina||C||Large||133 million||151 million|
|CGE/ Vivendi v Argentina No 2||C||X-large||105 million||169 million|
|Siemens v Argentina||C||X-large||238 million||278 million|
|Enron v Argentina||C||X-large||106 million||142 million|
|Azurix v Argentina||C||X-large||165 million||186 million|
|Sempra v Argentina||C||Large||128 million||171 million|
|CME v Czech Republic||N||Tycoon||270 million||395 million|
|Stati v Kazakhstan||N||Tycoon||498 million||498 million|
|Rumeli v Kazakhstan||C||Large||125 million||165 million|
|Micula v Romania||N||Tycoon||117 million||156 million|
|National Grid v Argentina||C||X-large||39 million||54 million|
|LG&E v Argentina||C||X-large||57 million||57 million|
|Occidental Petroleum v Ecuador No 1||C||X-large||72 million||75 million|
|Chevron v Ecuador No 1||C||X-large||78 million||96 million|
|Duke Energy v Ecuador||C||X-large||5.58 million||28 million|
|Siag v Egypt||N||Non-tycoon||75 million||129 million|
|ADC v Hungary||C||DU||76 million||76 million|
|Cargill v Mexico||C||X-large||77 million||86 million|
|Impregilo v Argentina||C||Large||21 million||28 million|
|El Paso v Argentina||C||X-large||43 million||66 million|
|SAUR International v Argentina||C||Large||40 million||60 million|
|Saipem v Bangladesh||C||X-large||6.3 million||11 million|
|Guaracachi v Bolivia||C||Small||29 million||36 million|
|Pey Casado v Chile||N||DU||10 million||14 million|
|Eastern Sugar v Costa Rica||C||X-large||35 million||35 million|
|Wena Hotels v Egypt||C||DU||8.82 million||19 million|
|OKO Pankki Oyj v Estonia||C||X-large||11 million||14 million|
|Kardassapoulos (and Fuchs) v Georgia||N||DU||30 million||90 million|
|RDC v Guatemala||N||Tycoon||11 million||11 million|
|TECO v Guatemala||C||Large||21 million||23 million|
|White Industries v India||C||DU||4.09 million||11 million|
|Sistem Muhendislik v Kyrgyztan||C||DU||8.5 million||10 million|
|Abengoa v Mexico||C||Large||40 million||42 million|
|ADM v Mexico||C||Large||34 million||37 million|
|Metalclad v Mexico||C||DU||DU||17 million|
|SGS v Paraguay||C||Large||39 million||64 million|
|Achmea v Slovakia||C||Extra-large||29 million||29 million|
|Deutsche Bank v Sri Lanka||C||Extra-large||60 million||70 million|
|Walter Bau v Thailand||C||Small||41 million||50 million|
|PSEG v Turkey||C||Large||9.06 million||15 million|
|Desert Line Products v Yemen||N||DU||25 million||30 million|
|Funnekotter v Zimbabwe||N||Non-tycoons||11 million||25 million|
Below large: 7 (includes 5 DU)
Non-tycoon: 5 (includes 3 DU)
|Total awarded: 5,039 million
X-large: 3,218 million (63.9%)
Large: 590 million (11.7%)
Below large: 184 million (3.7%)
Tycoon: 896 million (17.8%)
Non-tycoon: 151 million (3.0%)
|Total awarded: 6,501 million
X-large: 4,178 million (64.3%)
Large: 756 million (11.6%)
Below large: 219 million (3.4%)
Tycoon: 1,060 million (16.3%)
Non-tycoon: 288 million (4.4%)