[Plura-list] End of the line for corporate sovereignty

[Cory Doctorow]

Read today's issue online at: https://pluralistic.net/2024/03/27/korporate-kangaroo-kourts/

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I'm on tour with my new, nationally bestselling novel *The Bezzle*! Catch me at Wondercon in Anaheim this weekend (Mar 29-31), then Boston (Apr 11), Providence (Apr 12) and beyond!

https://pluralistic.net/2024/02/16/narrative-capitalism/#bezzle-tour

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Today's links

* End of the line for corporate sovereignty: ISDSes are on the ropes, and not a moment too soon.

* Hey look at this: Delights to delectate.

* This day in history: 2014, 2019, 2023

* Upcoming appearances: Where to find me.

* Latest books: You keep readin' em, I'll keep writin' 'em.

* Upcoming books: Like I said, I'll keep writin' 'em.

* Colophon: All the rest.

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🐣 End of the line for corporate sovereignty

Back in the 1950s, a new, democratically elected Iranian government nationalized foreign oil interests. The UK and the US then backed a coup, deposing the progressive government with one more hospitable to foreign corporations:

https://en.wikipedia.org/wiki/Nationalization_of_the_Iranian_oil_industry

This nasty piece of geopolitical skullduggery led to the mother-of-all-blowbacks: the Anglo-American puppet regime was toppled by the Ayatollah and his cronies, who have led Iran ever since.

For the US and the UK, the lesson was clear: they needed a less kinetic way to ensure that sovereign countries around the world steered clear of policies that undermined the profits of their oil companies and other commercial giants. Thus, the "investor-state dispute settlement" (ISDS) was born.

The modern ISDS was perfected in the 1990s with the Energy Charter Treaty (ECT). The ECT was meant to foam the runway for western corporations seeking to take over ex-Soviet energy facilities, by making those new post-Glasnost governments promise to never pass laws that would undermine foreign companies' profits.

But as Nick Dearden writes for *Jacobin*, the western companies that pushed the east into the ECT failed to anticipate that ISDSes have their own form of blowback:

https://jacobin.com/2024/03/energy-charter-treaty-climate-change/

When the 2000s rolled around and companies like the Netherlands and Denmark started to pass rules to limit fossil fuels and promote renewables, German coal companies sued the shit out of these governments and forced them to either back off on their democratically negotiated policies, or to pay gigantic settlements to German corporations.

ISDS settlements are truly grotesque: they're not just a matter of buying out existing investments made by foreign companies and refunding them money spent on them. ISDS tribunals routinely order governments to pay foreign corporations all the profits they *might* have made from those investments.

For example, the UK company Rockhopper went after Italy for limiting offshore drilling in response to mass protests, and took $350m out of the Italian government. Now, Rockhopper only spent $50m on Adriatic oil exploration - the other $300m was to compensate Rockhopper for the profits it *might* have made if it actually got to pump oil off the Italian coast.

Governments, both left and right, grew steadily more outraged that ISDSes tied the hands of democratically elected lawmakers and subordinated their national sovereignty to corporate sovereignty. By 2023, nine EU countries were ready to pull out of the ECT.

But the ECT had another trick up its sleeve: a 20-year "sunset" clause that bound countries to go on enforcing the ECT's provisions - including ISDS rulings - for *two decades* after pulling out of the treaty. This prompted European governments to hit on the strategy of a simultaneous, mass withdrawal from the ECT, which would prevent companies registered in *any* of the ex-ECT countries from suing under the ECT.

It will not surprise you to learn that the UK did not join this pan-European coalition to wriggle out of the ECT. On the one hand, there's the Tories' commitment to markets above all else (as the Trashfuture podcast often points out, the UK government is the only neoliberal state so committed to austerity that it's actually dismantling its own police force). On the other hand, there's Rishi Sunak's planet-immolating promise to "max out North Sea oil."

But as the rest of the world transitions to renewables, different blocs in the UK - from unions to Tory MPs - are realizing that the country's membership in ECT and its fossil fuel commitment is going to make it a world leader in an increasingly irrelevant boondoggle - and so now the UK is also planning to pull out of the ECT.

As Dearden writes, the oil-loving, market-worshipping UK's departure from the ECT means that the whole idea of ISDSes is in danger. After all, some of the world's poorest countries are also fed up to the eyeballs with ISDSes and threatening to leave treaties that impose them.

One country has already pulled out: Honduras. Honduras is home to Prospera, a libertarian autonomous zone on the island of Roatan. Prospera was born after a US-backed drug kingpin named Porfirio Lobo Sosa overthrew the democratic government of Manuel Zelaya in 2009.

The Lobo Sosa regime established a system of special economic zones (known by their Spanish acronym, "ZEDEs"). Foreign investors who established a ZEDE would be exempted from Honduran law, allowing them to create "charter cities" with their own private criminal and civil code and tax system.

This was so extreme that the Honduran supreme court rejected the plan, so Lobo Sosa fired the court and replaced them with cronies who'd back his play.

A group of crypto bros capitalized on this development, using various ruses to establish a ZEDE on the island of Roatan, a largely English-speaking, Afro-Carribean island known for its marine reserve, its SCUBA diving, and its cruise ship port. This "charter city" included every bizarre idea from the long history of doomed "libertarian exit" projects, so ably recounted in Raymond Craib's excellent 2022 book *Adventure Capitalism*:

https://pluralistic.net/2022/06/14/this-way-to-the-egress/#terra-nullius

Right from the start, Prospera was ill starred. Paul Romer, the Nobel-winning economist most closely associated with the idea of charter cities, disavowed the project. Locals hated it - the tourist shops and restaurants on Roatan all may sport dusty "Bitcoin accepted here" signs, but not one of those shops takes cryptocurrency.

But the real danger to Prospera came from democracy itself. When Xiomara Castro - wife of Manuel Zelaya - was elected president in 2021, she announced an end to the ZEDE program. Prospera countered by suing Honduras under the ISDS provisions of the Central America Free Trade Agreements, seeking $10b, a third of the country's GDP.

In response, President Castro announced her country's departure from CAFTA, and the World Bank's International Centre for Settlement of Investment Disputes:

https://theintercept.com/2024/03/19/honduras-crypto-investors-world-bank-prospera/

An open letter by progressive economists in support of President Castro condemns ISDSes for costing latinamerican countries $30b in corporate compensation, triggered by laws protecting labor rights, vulnerable ecosystems and the climate:

https://progressive.international/wire/2024-03-18-economists-the-era-of-corporate-supremacy-in-the-international-trade-system-is-coming-to-an-end/en

As Ryan Grim writes for *The Intercept*, the ZEDE law is wildly unpopular with the Honduran people, and Merrick Garland called the Lobo Sosa regime that created it "a narco-state where violent drug traffickers were allowed to operate with virtual impunity":

https://theintercept.com/2024/03/19/honduras-crypto-investors-world-bank-prospera/

The world's worst people are furious and terrified about Honduras's withdrawal from its ISDS. After 60+ years of wrapping democracy in chains to protect corporate profits, the collapse of the corporate kangaroo courts that override democratic laws represents a serious threat to oligarchy.

As Dearden writes, "elsewhere in the world, ISDS cases have been brought specifically on the basis that governments have not done enough to suppress protest movements in the interests of foreign capital."

It's not just poor countries in the global south, either. When Australia passed a plain-packaging law for tobacco, Philip Morris relocated offshore in order to bring an ISDS case against the Australian government in a bid to remove impediments to tobacco sales:

https://isds.bilaterals.org/?philip-morris-vs-australia-isds

And in 2015, the WTO sanctioned the US government for its "dolphin-safe" tuna labeling, arguing that this eroded the profits of corporations that fished for tuna in ways that killed a lot of dolphins:

https://theintercept.com/2015/11/24/wto-ruling-on-dolphin-safe-tuna-labeling-illustrates-supremacy-of-trade-agreements/

In Canada, the Conservative hero Steven Harper entered into the Canada-China Foreign Investment Promotion and Protection Agreement, which banned Canada from passing laws that undermined the profits of Chinese corporations for *31 years* (the rule expires in 2045):

https://www.vancouverobserver.com/news/harper-oks-potentially-unconstitutional-china-canada-fipa-deal-coming-force-october-1

Harper's successor, Justin Trudeau, went on to sign the Canada-EU Trade Agreement that Harper negotiated, including its ISDS provisions that let EU corporations override Canadian laws:

https://www.cbc.ca/news/politics/trudeau-eu-parliament-schulz-ceta-1.3415689

There was a time when any challenge to ISDS was a political third rail. Back in 2015, even *hinting* that ISDSes should be *slightly* modified would send corporate thinktanks into a frenzy:

https://www.techdirt.com/2015/07/20/eu-proposes-to-reform-corporate-sovereignty-slightly-us-think-tank-goes-into-panic-mode/

But over the years, there's been a growing consensus that nations can only be sovereign if corporations *aren't*. It's one thing to treat corporations as "persons," but another thing altogether to elevate them above personhood and subordinate entire nations to their whims.

With the world's richest countries pulling out of ISDSes alongside the world's poorest ones, it's feeling like the end of the road for this particularly nasty form of corporate corruption.

And not a moment too soon.


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🐣 Hey look at this

* Pandemic-Era Corporate Bullying https://prospect.org/economy/2024-03-25-pandemic-era-corporate-bullying/

* Open Source Beats Authoritarianism https://www.eff.org/deeplinks/2024/02/podcast-episode-open-source-beats-authoritarianism

* You can start applying for the American Climate Corps next month https://yaleclimateconnections.org/2024/03/you-can-start-applying-for-the-american-climate-corps-next-month/ (h/t Naked Capitalism)

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🐣 This day in history

#10yrsago Jimmy Wales tells “energy workers” that Wikipedia won’t publish woo, “the work of lunatic charlatans isn’t the equivalent of ‘true scientific discourse'” https://arstechnica.com/science/2014/03/wikipedia-founder-calls-alt-medicine-practitioners-lunatic-charlatans/

#10yrsago Noah Swartz reads Aaron Swartz’s afterword to Homeland https://memex.craphound.com/2014/03/26/noah-swartz-reads-aaron-swartzs-afterword-to-homeland/

#10yrsago Inside America’s illegal “Little Guantánamos” https://www.vice.com/en/article/5gk993/inside-the-kafkaesque-world-of-the-uss-little-guantanamos

#10yrsago Reflections from sketching courtrooms https://www.vice.com/en/article/bn5jy5/theater-of-justice

#10yrsago UK tax authority used anti-terror law to spy on whistleblower who disclosed sweetheart deal for Goldman Sachs https://www.theguardian.com/politics/2014/mar/24/hmrc-criticised-mps-terror-law-tax-whistleblower-hodge

#5yrsago Article 13 will wreck the internet because Swedish MEPs accidentally pushed the wrong voting button https://medium.com/@emanuelkarlsten/sweden-democrats-swedish-social-democrats-defeat-motion-to-amend-articles-11-13-731d3c0fbf30

#5yrsago An end-run around Citizens United: passing state laws that ban rewarding campaign donors with political favors https://bribestop.us

#5yrsago Record companies sue Charter because providing high-speed internet contributes to piracy https://arstechnica.com/tech-policy/2019/03/music-labels-sue-charter-complain-that-high-internet-speeds-fuel-piracy/

#1yrago Silicon Valley Noir https://pluralistic.net/2023/03/26/silicon-valley-noir/

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🐣 Upcoming appearances

* Wondercon Anaheim, Mar 29-31
https://www.comic-con.org/wc/

* Computer Pasts/Computer Futures (NYU/virtual), Apr 4
https://steinhardt.nyu.edu/events/deans-public-square-series-computer-pasts-computer-futures

* The Bezzle at Harvard Berkman-Klein Center, with Randall Munroe (Apr 11)
https://cyber.harvard.edu/events/enshittification

* The Bezzle at Anderson's Books (Chicago), Apr 17
https://www.andersonsbookshop.com/event/cory-doctorow-1

* Torino Biennale Tecnologia (Apr 21)
https://www.biennaletecnologia.it/evento/come-sfuggire-al-merdocene-e-costruire-un-internet-migliore/

* Canadian Centre for Policy Alternatives (Winnipeg), May 2
https://www.eventbrite.ca/e/cory-doctorow-tickets-798820071337?aff=oddtdtcreator

* Tartu Prima Vista Literary Festival (May 5-11)
https://tartu2024.ee/en/kirjandusfestival/

* Tim O’Reilly and Cory Doctorow on “Enshittification” and the Future of AI (May 14)
https://www.oreilly.com/live-events/tim-oreilly-and-cory-doctorow-on-enshittification-and-the-future-of-ai/0642572001651/

* Media Ecology Association keynote, Jun 6-9 (Amherst, NY)
https://media-ecology.org/convention

* American Association of Law Libraries keynote, (Chicago), Jul 21
https://www.aallnet.org/conference/agenda/keynote-speaker/

* Private Prisons, Finance Ghouls and The Bezzle (It Could Happen Here)
https://www.iheart.com/podcast/105-it-could-happen-here-30717896/episode/private-prisons-finance-ghouls-and-the-161844728/

*  Cory Doctorow’s new tech crime thriller takes us back to the days of Yahoo! (Betakit)
https://betakit.com/cory-doctorow-the-bezzle-betakit-podcast/

* Digital Hucksters, Crypto Scams and the Internet’s “Enshittification” (Underworld Podcast)
https://www.pandora.com/podcast/the-underworld-podcast/digital-hucksters-crypto-scams-and-the-internets-enshittification-with-cory-doctorow/

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🐣 Latest books

* The Bezzle: a sequel to "Red Team Blues," about prison-tech and other grifts, Tor Books (US), Head of Zeus (UK), February 2024 (the-bezzle.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3062/Available_Feb_20th%3A_The_Bezzle_HB.html#/).

* "The Lost Cause:" a solarpunk novel of hope in the climate emergency, Tor Books (US), Head of Zeus (UK), November 2023 (http://lost-cause.org). Signed, personalized copies at Dark Delicacies (https://www.darkdel.com/store/p3007/Pre-Order_Signed_Copies%3A_The_Lost_Cause_HB.html#/)

* "The Internet Con": A nonfiction book about interoperability and Big Tech (Verso) September 2023 (http://seizethemeansofcomputation.org). Signed copies at Book Soup (https://www.booksoup.com/book/9781804291245).

* "Red Team Blues": "A grabby, compulsive thriller that will leave you knowing more about how the world works than you did before." Tor Books http://redteamblues.com. Signed copies at Dark Delicacies (US): and Forbidden Planet (UK): https://forbiddenplanet.com/385004-red-team-blues-signed-edition-hardcover/.

* "Chokepoint Capitalism: How to Beat Big Tech, Tame Big Content, and Get Artists Paid, with Rebecca Giblin", on how to unrig the markets for creative labor, Beacon Press/Scribe 2022 https://chokepointcapitalism.com

* "Attack Surface": The third Little Brother novel, a standalone technothriller for adults. The *Washington Post* called it "a political cyberthriller, vigorous, bold and savvy about the limits of revolution and resistance." Order signed, personalized copies from Dark Delicacies https://www.darkdel.com/store/p1840/Available_Now%3A_Attack_Surface.html

* "How to Destroy Surveillance Capitalism": an anti-monopoly pamphlet analyzing the true harms of surveillance capitalism and proposing a solution. https://onezero.medium.com/how-to-destroy-surveillance-capitalism-8135e6744d59?sk=f6cd10e54e20a07d4c6d0f3ac011af6b) (signed copies: https://www.darkdel.com/store/p2024/Available_Now%3A__How_to_Destroy_Surveillance_Capitalism.html)

* "Little Brother/Homeland": A reissue omnibus edition with a new introduction by Edward Snowden: https://us.macmillan.com/books/9781250774583; personalized/signed copies here: https://www.darkdel.com/store/p1750/July%3A__Little_Brother_%26_Homeland.html

* "Poesy the Monster Slayer" a picture book about monsters, bedtime, gender, and kicking ass. Order here: https://us.macmillan.com/books/9781626723627. Get a personalized, signed copy here: https://www.darkdel.com/store/p2682/Corey_Doctorow%3A_Poesy_the_Monster_Slayer_HB.html#/.

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🐣 Upcoming books

* Picks and Shovels: a sequel to "Red Team Blues," about the heroic era of the PC, Tor Books, February 2025

* Unauthorized Bread: a graphic novel adapted from my novella about refugees, toasters and DRM, FirstSecond, 2025

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🐣 Colophon

Currently writing:

* A Little Brother short story about DIY insulin PLANNING

* Picks and Shovels, a Martin Hench noir thriller about the heroic era of the PC. FORTHCOMING TOR BOOKS JAN 2025

* Vigilant, Little Brother short story about remote invigilation. FORTHCOMING ON TOR.COM

* Spill, a Little Brother short story about pipeline protests. FORTHCOMING ON TOR.COM

Latest podcast:
  The Majority of Censorship is Self-Censorship https://craphound.com/news/2024/02/25/the-majority-of-censorship-is-self-censorship/

This work - excluding any serialized fiction - is licensed under a Creative Commons Attribution 4.0 license. That means you can use it any way you like, including commercially, provided that you attribute it to me, Cory Doctorow, and include a link to pluralistic.net.

https://creativecommons.org/licenses/by/4.0/

Quotations and images are not included in this license; they are included either under a limitation or exception to copyright, or on the basis of a separate license. Please exercise caution.

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"*When life gives you SARS, you make sarsaparilla*" -Joey "Accordion Guy" DeVilla
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