Swedish Company Uses Corporate Sovereignty Clause To Demand 4.7 Billion Euros From German Public
from the are-you-sure-that's-enough? dept
A couple of months ago we mentioned the long-running legal battle involving the Swedish energy company, Vattenfall, which is suing Germany using corporate sovereignty provisions in the Energy Charter Treaty after the German state decided to phase out nuclear power stations. The rumored figure we mentioned then was the already-generous €3.7 billion; but it has just been revealed that Vattenfall is actually demanding even more -- €4.7 billion, to be precise. We know this is the real figure, because it was mentioned by Germany's Minister of the Economy, Sigmar Gabriel (original in German.)
This fact may help to explain persistent reports that Germany will not agree to the inclusion of an investor-state dispute settlement (ISDS) chapter in either TAFTA/TTIP or CETA (the Canada-EU trade agreement). Germany is already experiencing first-hand the dangers of such corporate sovereignty provisions, and clearly wants to avoid suffering any more on this front.
The latest information, reported by the German news magazine Der Spiegel, points out that two other energy companies, RWE and E.on, are unable to sue in the same way as Vattenfall, because they are German companies, and the ISDS option is only available to foreign investors. This underlines the fact that, far from creating a level playing-field, corporate sovereignty is biased against local companies. For this reason, RWE and E.on are also trying to sue in Germany's national courts in order to obtain compensation, as Vattenfall is doing with the ISDS tribunals; whether they can depends on a ruling from Germany's constitutional court, due early next year. Interestingly, Vattenfall is also suing the German government through these courts -- which shows how ISDS gives foreign investors extra ways of claiming compensation.
Finally, the Der Spiegel article points out that the original estimate of the potential costs to the German government (and thus to the German taxpayer, who has to pick up the bill) from the action in the national courts, which were put at between €15 billion to €20 billion, are probably too high. That's because the price offered for supplying electricity has now dropped, bringing down potential profits too. That demonstrates the danger of granting corporate sovereignty tribunals unchecked power to make awards in favor of companies based purely on the latter's probably exaggerated claims about uncertain "losses" far into the future.
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Filed Under: corporate sovereignty, germany, investments, isds, lawsuits, tafta, ttip
Companies: vattenfall
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Companies should never be "too big to fail" in which the public needs to bail them out, nor should they ever be able to sue sovereign countries for imaginary lost income due to laws and regulations.
If corporations want to be people, then they're not immune to getting screwed like people (usually like the people they're screwing themselves) and left to die like people when they've reached the end of their life.
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I don't know either!
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Right for expected future profits?
What the fuck does this has to do with patents, regulations and other imaginary "assets".
Not to mention "expected future profits"?
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Re: Right for expected future profits?
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Re: Right for expected future profits?
um, depending on your time line, future profits = ZERO
since when have 'profits' been GUARANTEED ? ? ?
ISN'T that *supposed* to be the WHOLE POINT of so-called 'free market capitalism' ? ? ?
SOME one, ANY one makes a cheaper widget, offers a better service, provides a comprehensive solution for your wants/needs, and you go with them, and we call that 'competition' and the audience claps...
ain't that the way it is *supposed* to work ? ? ?
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making people suffer
people should suffer because...
I have been interested in what the internet(s) could have been and copyright and patents where not part of that.
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Does that company have an army?
-C
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Re: Does that company have an army?
In the past the outcome of this would have been a war!
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As horrible as some of these trade agreements are, we should at least be grateful we don't live in the seventh century.
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Re: Does that company have an army?
It's not like they "sue" in order to fight the government. Both legislators and shareholders "agree" that money will flow, the court proceedings mentioned above are just a public facade. German mentality breeds a very kafkaesk kind of corruption.
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i hope Germany fights this and gets other countries to back it too!
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Read and think critically before you post
Vattenfall is sueing for the destruction of value in their assets by the German governments decision to abandon nuclear power. Vattenfall still has to pay for the dismanteling of their plants, replacment of generational capacity and quite possibly unwinding of their hedges (e.g. they probably sold a large chunk of their expected output on the futures market).
Before you post, think critically.. all this hippy nonesense about companies being to big to fail.
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Re: Read and think critically before you post
And? What's the alternative, locking in a previous decision by a government because to do otherwise would 'destroy the value' of a company's assets in an area?
The government previously had decided one way on nuclear power, and Vattenfall acted accordingly. Now the government has changed their mind, and it's up to Vattenfall to deal with that, not try and sue to recoup 'lost' profits and 'worth'.
You don't always come out ahead in business, that's kinda how it works. To attempt to force the german people to pay back what the company spent is basically trying to turn it into a win-win situation for the company, where no matter what happens they don't lose money on a given venture.
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Awwww, isn't that sad. I know, let's all pitch in and help them out - not.
It's not like this or any other corporation is going out iof their way to help those in need, so to hell with them. They made their bed and now they have to sleep in it. I'm sorry, but that is capitalism at its finest, they should have read the contract and tough shit ......
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There are businesses that have been around over 100 years. A nuclear power generating plant will not be one of them. A nuclear power generating plant will have a finite life span. Anybody building such a plant should know about that before spending their money.
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The end result is the same in both cases. The taxpayers end up paying the tax/fine.
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Obama is responsible for everything bad that happens,
while everything good that happens is because of those who are working against him.
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There will be more cases like that in the future...
The second point is:
ISDS is not the only mechanism wiping democracy away.
There is also "regulatory council" and "stillstand clause".
And I'm sure that they are not only part of TTIP, but also CETA and TPP. Don't forget them.
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Re: There will be more cases like that in the future...
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