Will Corporate Sovereignty Disputes Lead To Wars One Day?

from the even-if-they-don't,-they-hardly-promote-peace dept

Tue, Jun 23rd 2015 1:06am — Glyn Moody

Last August, we wrote about the most egregious corporate sovereignty award (so far): $50 billion against Russia, under a treaty that it never even ratified, in favor of the major shareholders of the Yukos oil company. Of course, as everyone pointed out, being awarded $50 billion was one thing, collecting it, quite another. Most people probably assumed that it would be practically impossible to squeeze that money out of a recalcitrant Russia, but we now learn that some serious steps towards that goal have recently been taken, as reported by Der Spiegel (original in German). In Belgium, the bank accounts of the Russian embassy were frozen, as were those of Russia's EU and NATO missions, while in France, something similar happened, with Russian accounts blocked at 40 banks.

Understandably, this did not go down well with the Russian government. The country's deputy foreign minister warned, "whoever dares to do that must understand that it will lead to reprisals," something his boss, Sergei Lavrov echoed. Meanwhile, Lavrov's own boss, Vladimir Putin, was also well aware of the situation, and was quoted as saying: "we will defend our interests using legal means."

A story on France 24 reports that Russia has already threatened to retaliate against state-linked foreign firms operating in the country, so that's one way that things could escalate. But more seriously, the relations between Russia and EU nations are extremely strained over the conflict in eastern Ukraine; the last thing the situation needs is additional tension caused by arguments over a massive fine. Even if corporate sovereignty doesn't actually cause a war -- well, let's hope not -- the Yukos award may turn into a hindrance to resolving an existing conflict. That's yet another reason to get rid of the whole deeply-flawed system before it causes more serious damage.

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Filed Under: belgium, corporate sovereignty, france, frozen assets, isds, russia, trade wars, vladimir putin, war
Companies: yukos

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Anonymous Coward, 23 Jun 2015 @ 1:32am

Maybe not actual physical ones, but...
Maybe no one will deploy actual soldiers on foreign corporate HQs, but the inability to legislate as we need/want to, or the money spent fighting lawsuits and losing them will contribute to economic losses and/or social malaise within and without the affected countries. This will no doubt lead to general acrimony and a sense that "there's nothing you can do", which is quite bad in politics (these are usually political problems, as I understand them).
Let's put it this way: if a good friend of yours tells you you're a filthy slob and means it, you might argue with him and come to see his point, or make him see it from your side. If the same remark comes from an acquaintance with whom you occasionally have somewhat heated arguments, it may be what pushes you over the edge.
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anonymous, 23 Jun 2015 @ 2:09am

It's been done
Rollerball
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Anonymous Coward, 23 Jun 2015 @ 2:27am

Great...
And another shot fired. I really start to think that they want a war against Russia. The US repairs/restocks their nukes in Germany, EU states asking their military to buy more weapons, northern Europe mobilising 1mio reservists, eco sanctions...
I'm sure this will end really really well :*(
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Violynne (profile), 23 Jun 2015 @ 3:06am

I doubt it'll lead to war, but what it will do is close down foreign trade, putting up artificial borders around the world.

What this lesson has taught Russia, and the world indirectly, is that doing business in the global market isn't going to be worth it.

Corporate Sovereignty is just another example of abuse ready to occur, with "courts" doing favors because they'll get a stake at being used.

It's like arbitration: no one wins but the corporations.

Here's to hoping the eyes around the world open up to see what this means for everyone.
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stimoceiver (profile), 23 Jun 2015 @ 4:42am

If the TPP and TTIP pass, corporations will go from having de facto sovereignty to having de jure sovereignty.

Until this happens, who, exactly has enjoyed the privileges of sovereignty besides states?

The fact that corporations are pushing for de jure sovereignty through these treaties shows that the nearly unchecked privilege corporations enjoy thanks to corporate "personhood" just isn't enough for today's transnational corporations.

From what little has been leaked, its not hard to see that the TPP and TTIP are clearly part of the same pattern of stifling competition we see when corporate lobbying results in legislation that stifles innovation and so-called "disruptive" technologies. In fact, they streamline the process by taking the decision making process out of the hands of politicians legislators and judges who are (theoretically) beholden to both their constituency and the laws of their jurisdiction and instead places it directly in the hands of those who answer only to the bottom line.

But corporations differ from states in several very important ways. States are bound to a geographical location. Corporations are not, and regularly flex this mobility to get around taxation, environmental and safety regulations, and labor laws. Clearly the TPP is designed from the ground up to give sanction to this way of doing business - that is, outside the reach of any one jurisdictions laws.

Also, based on the pattern of large-scale exploitation by the worlds corporations of smaller and more poorly governed countries, it is highly likely that there is more than one corporation in existence that possess greater resources at their disposal than some of the world's smaller and poorly governed countries.

Because of these two points it should be clear that giving corporate powers de jure sovereignty through the TPP and TTIP will put them at significant advantage over land-locked state powers in many situations. Calling TPP and TTIP "treaties" or "partnerships" is really just nice a euphemistic whitewash for what will really happen under de jure corporate rule.

If the TPP and TTIP pass, the corporations of the world and the moneyed powers of the world who control them will then have free reign to redraw to their liking the geopolitical borders of almost any part of the earth that suits them, and by use of any and every dirty trick from deception to coercion.

TL;DR: Granting corporations de jure sovereign status will shortly empower them to wage war on every level, up to and including armed combat.
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Anonymous Coward, 23 Jun 2015 @ 4:54am

Re: Maybe not actual physical ones, but...
Hi Netrunner! Hi, Shadowrun!

Reality forgot you were games again!
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Anonymous Coward, 23 Jun 2015 @ 5:20am

"Will Corporate Sovereignty Disputes Lead To Wars One Day?"

Of course it will, has in the past.
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Anonymous Coward, 23 Jun 2015 @ 5:29am

If Russia never even agreed to the agreement it's being fined $50 billion dollars under, then how can they be charged under that agreement?

Not to mention no matter what it was that Yukos feels Russia did to hurt their profits, there's no way in hell it cost anything close to $50 billion in profits. People don't respect the law when they see numbers thrown out so arbitrary and ridiculously high for the 'crime'.
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Anonymous Coward, 23 Jun 2015 @ 5:38am

Re: Great...
The military prepping is so far a small positional fight and from a european side merely taking minimum NATO-funding serious. None of the sides wants a war and both sides are unwilling to escalate by starting fights in another territory. So the military conflict is relatively contained.

When that is said, Russias Eurasian trade union is a part of the future trade war. Russia has particularly economic and unique knowhow in eastern Ukraine they are unwilling to let EU see and EU started a program to trade with Ukraine in a way that would keep Russia from trading and that would allow for some serious transfer of knowledge.
So for a significant part, the conflict in Ukraine is already about trade interests and that part of the conflict will likely expand with the Yukos award and Gazproms case in EU competition law. While rationality is not the first thing that comes to mind when thinking about the EU-Russia conflict it is still part of the framework.
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Anonymous Coward, 23 Jun 2015 @ 5:38am

Re: Re: Maybe not actual physical ones, but...
If that only was true... I want my datajack!
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Vladlagg, 23 Jun 2015 @ 5:43am

Yukos
... Was blown up by Putin so he could nationalize the parts to make a statement on energy in Russia. I am not a fan of ISDS but the process of destruction for Yukos created Rosneft to benefit the state, using russian courts to force the issue. It was completely unfair for the shareholders.
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NeghVar, 23 Jun 2015 @ 6:04am

I say Russia should respond to Yukos with a missile on their corporate HQ. Not a nuke, but a weapon with enough force to destroy their HQ.
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Jacob Rothschild, 23 Jun 2015 @ 6:07am

No, no Rothschild involved here.
It always amazes me how everybody avoids mentioning Jacob Rothschild, when they talk about Yukos Oil.
It is very orwellian.
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Lalo Martins (profile), 23 Jun 2015 @ 7:07am

Will Corporate Sovereignty Disputes Lead To Wars One Day?
If it's not scrapped soon, probably.

But it will have to be in the next 20 years or so; any later, the way things are going, governments won't have enough power to do even that.
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DigDug, 23 Jun 2015 @ 7:24am

ShadowRun anyone?
Here come the MegaCorps with their own private armies, cybermods, drug enhanced zombie troopers.
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Anonymous Coward, 23 Jun 2015 @ 7:35am

Re: ShadowRun anyone?
Currently those MegaCorps and private armies are two seperate entities. But I guess as a company it would be logical to hire or employ a privat army if the reward is 50 bil. Even if you spend 25 bil you'd earn quite a bit.

Besides who wouldn't like to live in a Shadowrun world? Dragons, trolls, cyber implants... ok maybe the "wastelands" of Europe might have something against the idea
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Paul Clark, 23 Jun 2015 @ 7:38am

It Will Leadto Dirty Wars
The trade deals protect corporations, not their employees.

If a company does something you don't like, a country just has to declare it a terrorist act and start legal proceedings against the corporations. If the people are unreachable, the expression is exra-judial killings.

The other option a country has is to buy up the stock if the corporation is publicly traded and they have the copnay give them an exemption on the claim, andthen sell the stock. In many cases its probably cheaper than going through the dispute mechanism.
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Baron von Robber, 23 Jun 2015 @ 7:38am

Re: Re: Re: Maybe not actual physical ones, but...
Hire a shaman, chummers.
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Baron von Robber, 23 Jun 2015 @ 7:39am

Re: Re: ShadowRun anyone?
"Currently those MegaCorps and private armies are two seperate entities."

Blackwater
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Anonymous Coward, 23 Jun 2015 @ 8:53am

Re: Re: Great...
While I might agree that the military prepping is a small thing as of now, the narative currently is that russian increase of arms/ missles is a threat while US reinforcements of nukes( atom bombs, serious apocalyptic stuff) is alright. But then there is the whole actions of increasing the military force in a northern european country with russian boarder... I mean why would you do that if you planned for peace?

Sure there is a trade war going on at the moment but from a german point of view it only hurts german companies. Last I checked 6000+ middle class companies had problems or went bankrupt because of it. And while the US started those restrictions their companies still buy and deal with Russia as if nothing happend at all (f.e. oil companies buying into Russia).

The other things you mentioned play a rather small role in the conflict at least imho. We already saw that Russia is moving its gas pipelines around the "conflict" areas and the knowhow that might be in the Ukraine is very small but my not knowing about the real knowhow present there might be a result of the propaganda in the EU. If there is a certain sector of knowhow that is beyond the EU possabilites then please enlighten me, I really do want to know. Here the media isnt mentioning anything bad about Ukraine except Russia is invading it, forgetting that a Nazi party is ruling the country and I imagine other rather important things.
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Anonymous Coward, 23 Jun 2015 @ 8:57am

Well this looks like the start to the movie Bounty Killers. Can only hope this comes true one day.

IMDB link to movie
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tqk (profile), 23 Jun 2015 @ 9:27am

Re: Re: Great...
WWI started over a gunshot in Sarajevo.
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tqk (profile), 23 Jun 2015 @ 9:29am

Re:
Russia's re-aligning with China now. They're cutting out the West.
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Uriel-238 (profile), 23 Jun 2015 @ 10:11am

Are you sure of that?
I'm pretty sure the Russian army would be delighted to roll into the European Union, even if they have to roll through (and incidentally occupy) Ukraine the way Hitler took Poland on his road to the Soviet Union.

Of course, when bank accounts of embassies are seized by other nations, it becomes a diplomatic issue with that nation and not with the parties in the legal action that started it in the first place.
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JoeCool (profile), 23 Jun 2015 @ 10:45am

Re: Re: ShadowRun anyone?
I've been saying for a while now that some time soon, someone will find it cheaper to hire mercenaries than to hire lawyers. That day is approaching more rapidly than I could have guessed.
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PRMan, 23 Jun 2015 @ 11:00am

Re: Re:
BRICS:

Brazil
Russia
India
China
South Africa

The West cutting these countries out is going to end very badly, as all the growth in the world is happening in these countries right now.
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PRMan, 23 Jun 2015 @ 11:02am

Re: Will Corporate Sovereignty Disputes Lead To Wars One Day?
Read up on Dutch East India Company. The answer is "yes".
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limbodog (profile), 23 Jun 2015 @ 12:07pm

It would hardly be the first war we fought over corporate interests
Right Smedley Butler?
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Bergman (profile), 23 Jun 2015 @ 12:43pm

Re: Re: Re: Great...
That's nothing new. The Cuban Missile Crisis was entirely made of it.

The US had missiles that could hit Moscow and that was somehow okay. When the USSR put missiles in Cuba that could hit Washington D.C., somehow that was not okay -- even though the US missiles at the time were closer to Moscow than the Soviet missiles were to Washington.
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Anonymous Coward, 23 Jun 2015 @ 12:44pm

Why don't we just fine Russia 500,000 trillion billion squillion dollars..that'll help.

[This policy was brought to you by the retarded geniuses at the RIAA]
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Bergman (profile), 23 Jun 2015 @ 12:45pm

Re:
Hey, you pays your money and you takes your chances.

If a corporation is a sovereign entity, then it has both the advantages and disadvantages of sovereignty.

Such drawbacks include discovering someone has parked a drone loaded with missiles above your headquarters and is demanding your unconditional surrender.
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Uriel-238 (profile), 23 Jun 2015 @ 12:55pm

I'm pretty surenthe USSR was never okay with the US lead in the arms race.
Through the fifties and sixties the US had some serious technological advantages, and yet the US was convinced it was behind.

This is how we weren't just MAD but downright loony.
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sigalrm (profile), 23 Jun 2015 @ 1:05pm

Re: Re:
"We have always been at war with Sony..."

Now that'd be reality TV worth watching...
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MrTroy (profile), 23 Jun 2015 @ 8:42pm

Re: Re: ShadowRun anyone?
Besides who wouldn't like to live in a Shadowrun world? Dragons, trolls, cyber implants... ok maybe the "wastelands" of Europe might have something against the idea
It's very cool to read about and play games set in a Shadowrun world, but one thing that I notice from my experience doing that ... is that the Shadowrun world is a pretty terrible place for most of its inhabitants. An exciting place, but a terrible one.

A world with megacorps and private armies, but without the magic, cybertech and metahumans... that's like trying to be one of the normal people in the Shadowrun world.
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Anonymous Coward, 23 Jun 2015 @ 11:37pm

Re: Re: Re: ShadowRun anyone?
"may you live in interesting times" is considered a curse for good reason, most times that are interesting to read about were terrifying to live through.
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Uriel-238 (profile), 24 Jun 2015 @ 3:02am

I'm pretty terrified.
Ours is a world already where the police can gun us down or rob us with impunity.

And if the police takes an interest in you, they'll look at your whole life to find something to incriminate you. And then the officers will lie to convict you, and the courts will believe them because they're cops.

Where if some VIP in the US wants you bad enough, it'll send a SWAT team to a whole nother country to get you.

Where murderbots and spybots roam the sky taking pictures and occasionally blasting civilians without warning.

Where the candidates for any given branch of office are owned by the same corporations.

Where are nation scans the goings on of its own people looking for unAmerican activities, and tortures its enemies, or people it mistakes for its enemies, and this is considered patriotic.

Yeah. These times are way interesting.
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Pragmatic, 24 Jun 2015 @ 5:58am

Re: Re:
Then a smart corporation would have a finger in every national pie to make it... unwise to wage war on them.
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TDR, 24 Jun 2015 @ 2:10pm

So, I guess this means the Shinra Corporation isn't far from becoming a reality.
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Anonymous Coward, 25 Jun 2015 @ 12:55pm

It turns out any asshole in the world can declare a war. Corporate sovereignty would just be a hiding place for some shit hole like nk or aq to hide it's human rights abuses abroad. TTIP is acceptable by my reading of it. Something needs to be done about human rights abuses committed against us from abroad and if the rome statute or a similar treaty works... good

There is a good reason for the large awards from those companies and govts
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Anonymous Coward, 27 Jun 2015 @ 7:51pm

The problem with corporate sovereignty is it may force us to war on the stock holders. Limited corporate sovereignty may be okay if the treaty doesn't allow governments to war on the stock holders for having bought a piece of stock and holding it in their portfolio.
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