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Comment by nebolo | Hacker News Reader

ISDS does NOT entitle companies to compensation when a country changes laws - it entitles foreign investors to compensation when a country violates their rights under public international law, for example the right not to have their property expropriated. This actually does happen fairly often, and in order to promote international investment it is a good idea to have treaties which regulate it.

In fact cigarette companies are claiming that by prohibiting them from using their branding, Australia expropriated their intellectual property. NO ONE expects the cigarette companies to actually win, and as such they will not be entitled to any compensation.

There is a huge number of misconceptions about ISDSs and the TPP in this thread.

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> ISDS does NOT entitle companies to compensation when a country changes laws - it entitles foreign investors to compensation when a country violates their rights under public international law, for example the right not to have their property expropriated

That's often a fairly thin distinction. Unless a country literally has a law that says the government can seize any property at the whim of any bureaucrat for no reason at all, the way governments expropriate property is usually to pass a new law, tax, or to creatively reinterpret existing laws to allow them to do that.

> NO ONE expects the cigarette companies to actually win, and as such they will not be entitled to any compensation.

Obviously they think they have a chance otherwise they wouldn't waste time on trying. Brands are assets, they are bought, owned and sold and some are clearly more valuable than others. If your brand is suddenly made worthless by a change in the law then arguably that property is if not expropriated then at least destroyed.

The whole ISDS arbitration procedure seems vague and informal enough that the outcome could be anything, really. Without real courts and a well developed process I'm not sure how you can say whether they'd win or not. Seems like it'd rest on whether the arbitrators can be convinced that this action would fall under the relevant clauses or not.

I think markets solve this already. Countries with weak property rights see less foreign investments. No need for an additional mechanism.

In addition, US & Europe are already very business friendly[1], which is great! This is the reason EU/US are comparatively prosperous already.

ISDS is about lobbying and regulatory capture (wrapped in the veil of property rights).

[1] http://www.doingbusiness.org/rankings

Maybe because no one knows what's really in the agreement?

The agreement doesn't exist yet, it's being negotiated. However, there are misconceptions about how FTAs, ISDSs and public international law in general work.

Misconceptions about elements of a secretive process? Hardly surprising given the secrecy surrounding something like this.

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