NAFTA’s Chapter 11 Investor-State Dispute Settlement (ISDS) provisions grant private investors from one country the right to sue the government of another country if it introduces new laws, regulations or practices – be they environmental, health or human rights – that cause corporations’ investments to lose money.
- Protect foreign investors, but no one else. Domestic corporations, civil society, unions or governments do not have the same rights to challenge government decisions.
- Cost $4 million on average to defend a case. Chapter 11 cases are heard by three arbitrators, an elite group of investment lawyers who only look at investment issues, behind closed doors.
- Create a public “chill” that may dissuade governments from enacting policy. An in-depth study showed that policymakers will delay or shelve decisions because of the threat of potential ISDS lawsuits.
Canada has faced 38 Chapter 11 ISDS lawsuits – the most amongst the three NAFTA countries. At the moment, Canada faces ISDS lawsuits claiming $2.6 billion in damages. Canada is the most sued country in the developed world because of NAFTA. According to the Canadian Centre for Policy Alternatives, two-thirds of the ISDS lawsuits against Canada are over environmental policies.