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investor-state dispute settlements
As Left-Wing Opposition Banned, Ecuador Court Rejects Terrible UAE Treaty
The decision blocks the right-wing president's unconstitutional attempt to bypass the National Assembly. Still, this is just one step in Ecuador's continued fight for its Constitution and its democracy.
Mar 13, 2026
In a major rebuke to President Daniel Noboa, Ecuador's Constitutional Court ruled unanimously on March 9 that his controversial Bilateral Investment Treaty with the United Arab Emirates cannot be fast-tracked and must be approved by the National Assembly.
The decision blocks the right-wing president's unconstitutional attempt to bypass the National Assembly. Still, this is just one step in Ecuador's continued fight for its Constitution and its democracy.
This treaty is the test case for a far broader corporate coup, one that aims to resurrect a legal weapon Ecuador’s people have repeatedly rejected: Investor-State Dispute Settlement (ISDS).
The treaty, signed in a rushed ceremony in December 2025, was littered with errors, referencing the non-existent "United Arab States" and citing provisions that aren't there. When Ecuador’s pro-corporate Constitutional Court rightly demanded a corrected text, it asked for an English version, a bizarre move in a Spanish-speaking republic.
“We are witnessing a government ignoring its own Constitution and the will of its people to serve the interests of transnational capital."
In response, Noboa issued an extraordinary decree authorizing Ecuador’s ambassador to unilaterally correct the text, bypassing normal diplomatic and legal channels.
The court has now sided with Ecuador’s progressive Constitution. However, that is not where this fight ends; instead, the treaty will have to be taken through a two-stage review process, unless Noboa decides to ignore the court altogether—a move that would be unsurprising given the young autocrat’s continued destruction and dismissal of Ecuador’s other branches of government.
The Constitutional Court will have 30 days to conduct a second, deeper review of the treaty's content to verify its full conformity with the Constitution. If the treaty survives that scrutiny (or if the court does not respond in 30 days), it will go to the National Assembly, where it requires absolute majority approval. Currently, Noboa’s party only has two-fifths of the total assembly seats, with leftist, pro-Indigenous, and some centrist parties occupying the rest.
The urgency of this corporate agenda explains the government's simultaneous brutal crackdown on democratic opposition. In a move that has drawn international condemnation, an electoral judge, on the request of the Noboa-aligned prosecutor general, suspended the country's largest opposition party, the left-wing Revolución Ciudadana (RC), for nine months.
The RC would not be able to conduct any political activities, or run in the 2027 local elections. The left-wing party, which won 44% of the vote in the last presidential election, controls the country's largest cities, including Quito and Guayaquil.
Interestingly, the right-wing pro-Trump billionaire president has himself been credibly accused of electoral fraud, corruption, and stakes in the drug-trafficking trade.
The case against RC relies on the testimony of an individual awaiting trial for child sexual abuse, who was given preferential treatment in prison in exchange for implicating the party on cooked-up money laundering charges. This follows the February pre-trial detention of Guayaquil's Mayor, Aquiles Alvarez, another opposition leader targeted by the prosecutor general. This thus follows a long pattern of Noboa's crackdown on opposition. The right is also cutting off the opposition's ability to vote against Noboa's measures in the assembly.
The UAE BIT contains ISDS provisions that grant foreign investors the right to sue Ecuador in international tribunals for billions over laws or policies that harm their profits, and those they expect to make in the future, including environmental and health regulations that protect local and marginalized populations. This is explicitly prohibited by Article 422 of Ecuador’s Constitution, a prohibition upheld by the people in national referenda in 2024 and again in 2025.
“This is all very clearly unconstitutional,” says Ladan Mehranvar, a senior legal researcher at the Columbia Center on Sustainable Investment who focuses on international investment law and human rights. “They are trying to push the BIT through by sidestepping constitutional safeguards, including the requirement of prior approval by the National Assembly,” she added.
“We are witnessing a government ignoring its own Constitution and the will of its people to serve the interests of transnational capital,” said Pedro Labayen Herrera and Mario Osorio, both researchers with the Center for Economic and Political Research (CEPR) in Washington. “They are fast-tracking the UAE treaty by claiming it requires only executive ratification, thus avoiding the scrutiny of the Ecuadorian legislature and the public. That is simply false.”
There are serious concerns about the court’s independence. One justice, Claudia Salgado, nominated by Noboa, comes from a family of legal and arbitration specialists and has previously written on Ecuador’s constitutional ban on ISDS. Her apparent shift, alongside pressure from an executive that has publicly attacked and threatened the Constitutional Court judges, paints a picture of a state institution under siege. “Either the Constitutional Court is captured, or it feels threatened,” Mehranvar noted.
So why such a reckless, rushed push for a treaty with the UAE? Because it is the blueprint and the battering ram for something far more consequential, namely, a Free Trade Agreement with Canada and other pro-corporate actions that would permanently lock in ISDS for the (mostly foreign) mining industry.
There is also significant personal corruption at play. The Noboa family holds a significant stake in Silvercorp, a Canadian mining company, as well as other financial holdings with direct interests in ISDS and the president’s deregulation crusade.
An ISDS chapter in a Canada-Ecuador FTA would directly benefit the president’s own financial interests, allowing corporate actors, potentially including his family’s holdings, to sue the Ecuadorian state. “ISDS is a tool for the Noboa family to protect their own financial interest,” said Herrera and Osorio.
This agenda is being synchronized with a brutal domestic deregulation campaign. In late January, Noboa proposed gutting Ecuador’s Mining Law by replacing the mandatory environmental license with a simplified authorization, which local Indigenous groups say decimates their constitutional right to prior consultation, a key tool they use to oppose harmful extractive projects. Ecuador is one of the most biodiverse countries on Earth; about half of its territory is made up of the Amazon rainforest and Indigenous lands.
Combined with ISDS, this creates a vicious trap—remove environmental safeguards now, deter future governments from reinstating them, and use international tribunals to sue any future government that tries to reinstate them for “indirect expropriation” of future profits.
Companies could do this even without any intent to finish the projects, or invest while knowing that the projects are legally or politically untenable, winning out on billions of dollars in Ecuadorian taxpayer funds, at a time when Ecuador is facing a historic financial, energy, and security crisis, and remains one of the poorest countries in the Western Hemisphere.
The United Nations special rapporteur on human rights and the Environment has argued that ISDS has catastrophic consequences for climate action and human rights. Nobel prize-winning economist Joseph Stiglitz has even argued ISDS is “litigation terrorism,” while even the libertarian Cato Institute has said the mechanism actually threatens the rule of law, growth, and investment.
This deal and its progenitors represent the fusion of state and corporate power against democracy. It was preceded by the violent crushing of protests against subsidy removals, the criminalization of water defenders, and the continued advancement of mining projects in sensitive ecosystems like the Amazon and near the Yasuní National Park, despite, once again, popular referenda opposing them. The Noboa government has conducted a war against democracy, the rule of law, and human rights.
If the court and National Assembly allow this breach, the floodgates open for a corporate takeover dressed as trade policy, with only global mining capital standing to gain. Ecuador’s people have resisted corporatocracy many times over. Their government is now trying to force it on them by decree, while suppressing all opposition. At a time when global democracy and rights are falling off a cliff, the world must heed this crucial test.
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The UN Summit of the Future’s Commitment to Corporate Power Undermines Its Goals
If world leaders who are coming to the U.N. Summit on September 22 and 23 are serious about protecting the future of humanity and the planet, they should dismantle an anti-democratic investment system.
Sep 17, 2024
The United Nations is hosting world leaders on September 22 and 23 for a “Summit of the Future.” Unfortunately, the draft action plan for the summit, while full of lofty language and some good intentions, does not challenge the neoliberal model or corporate control of the global economy.
On the contrary, it proposes, for example, to “facilitate access of developing countries to the WTO and promote trade and investment liberalization.”
It’s astounding that this plan, which is supposed to serve as the basis for an inter-governmental agreement, is so stuck in the past. For decades now, social movements and elected officials in many countries have become increasingly opposed to trade and investment rules that grant enormous privileges and power to transnational corporations.
The increase in demand for minerals for euphemistically named “green” energy transitions means that governments will be at greater risk of facing multi-million dollar lawsuits, as these processes are generating social reactions worldwide.
In many ways, these old rules directly contradict the U.N. summit’s overall goal of creating “a world that is safe, sustainable, peaceful, inclusive, just, equal, orderly, and resilient.”
They also make a mockery of the summit’s stated commitment to the U.N. Charter principle of “full respect for the sovereign equality of all Member States” and the principle of “equal rights and self-determination of peoples.”
Just take a look at how the natural resource extractive industries have used the existing investor-state dispute settlement (ISDS) system to undercut national sovereignty and sustainability and to foment conflict. The mining sector, in particular, has used this system, enforced through almost 3,000 treaties, to sue governments in supranational tribunals, bypassing national legal systems.
The vast majority of ISDS claims are directed against countries in the so-called “Global South,” and most suits are targeted at Latin American countries. ISDS allow corporations to suppress the opposition of local and Indigenous communities fighting for their territorial and environmental rights. When governments respond in favor of communities resisting mining projects, companies often use these lawsuits to blackmail governments into backing down and granting permits for environmentally destructive projects or pay “compensation” for the loss of expected corporate profits.
Investment treaties even include “full protection and security” clauses that give companies the right to demand that governments repress communities that oppose their mining projects. In Guatemala, for instance, the Nevada-based mining company KCA claims that the government failed to provide access to a mining site blocked by Indigenous protesters, and is suing the country for more than $400 million.
The increase in demand for minerals for euphemistically named “green” energy transitions means that governments will be at greater risk of facing multi-million dollar lawsuits, as these processes are generating social reactions worldwide. The Transnational Institute, the Institute for Policy Studies, and other organizations recently published extensive information on mining (and other) company lawsuits against governments in an “ISDS-Tracker” site.
Panama is facing a particularly scandalous example of these ISDS lawsuits. The people of this country have risen up against the Canadian mining company First Quantum and in November 2023 succeeded in having Panama’s Supreme Court declare the renewal of the company’s copper mine license unconstitutional. This led the Panamanian National Assembly to approve a mining moratorium law.
According to reports, First Quantum has sued Panama for the unpayable sum of $30 billion at the International Chamber of Commerce in Paris, and has threatened another $20 billion arbitration under the Canada-Panama Free Trade Agreement.
Other transnational mining companies affected by the cancellation of licenses have followed First Quantum’s example and, in total, Panama faces ISDS claims for at least $57 billion, equivalent to more than half of its GDP.
As we demonstrate in our recent report “ISDS: A portrait of transnational power in Mexico, the investment protection regime, and its consequences,” Mexico is facing lawsuits totaling at least $13 billion, with more than half of them related to mining. This figure is partial, as it corresponds only to claims at the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID), which publishes information about them. On the other hand, the International Chamber of Commerce, where Panama has been sued, and other supranational tribunals do not publish information on cases.
The ISDS system has been dismantled among some rich countries. For instance, the United States and Canada eliminated it among themselves in the United States-Mexico-Canada Agreement. The European Union eliminated it among its member states and is exiting the Energy Charter Treaty, which also allowed these investor-state suits.
If world leaders who are coming to the U.N. Summit on September 22 and 23 are serious about protecting the future of humanity and the planet, they should dismantle this anti-democratic investment system (ISDS) for all countries.
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State Lawmakers Urge US Exit From Toxic ISDS Mechanisms in Trade Deals
"Outdated trade rules like ISDS can pose a real threat to states' sustainable energy initiatives and the good-paying jobs they create," said one lawmaker from Maine.
Aug 06, 2024
More than 300 state lawmakers signed a letter Monday calling on U.S. President Joe Biden to "eliminate the threat of Investor-State Dispute Settlement from all U.S. trade and investment agreements," joining hundreds of civil society groups and dozens of members of Congress in speaking out against rules that allow foreign corporations to challenge state laws.
The legislators—who include Democrats, Republicans, and Independents—expressed support for the official position of the National Conference of State Legislatures (NCSL) regarding ISDS, as the conference convened its annual summit in Louisville, Kentucky.
The NCSL opposes trade deals "with investment chapters that provide greater substantive or procedural rights to foreign companies than U.S. companies enjoy under the U.S. Constitution."
The Biden administration has agreed with the NCSL's call to exclude ISDS from any new trade agreements, but the U.S. is currently a party to more than 50 trade and investment deals that contain the rules.
"It's long overdue that we change course. Getting rid of ISDS, which embodies the runaway corporate power embedded in our trade deals, is a great place to start.
ISDS rules empower corporations to sue governments if they claim their profit margins are harmed by public programs, such as public health regulations, environmental rules, food safety guidelines, or climate laws aimed at reducing fossil fuel emissions.
"The outcomes of these cases, which can result in billions of U.S. tax dollars paid to foreign corporations in compensation, are
determined in unaccountable tribunals presided over by unelected corporate lawyers whose rulings are not subject to appeal," reads the Monday letter from state lawmakers, including North Carolina state Rep. Pricey Harrison (D-61), New York state Sen. Liz Krueger (D-28), and Florida Rep. Anna Eskamani (D-42).
According to the letter, "even cases that get dismissed can result in countries paying millions in tribunal costs."
Harrison said in a statement that "the era of corporate-dominated trade policy" has contributed to a loss of 40% of North Carolina's manufacturing jobs.
"It's long overdue that we change course," said Harrison. "Getting rid of ISDS, which embodies the runaway corporate power embedded in our trade deals, is a great place to start. These extreme corporate rights undermine democracy and critical public interest protections here at home and around the globe. I'm glad to see so many colleagues from across the political spectrum joining me in this effort."
Last November, 200 civil society groups demanded the elimination of ISDS within APEP, and three dozen members of Congress wrote to U.S. Trade Representative Katherine Tai and Secretary of State Antony Blinken last May saying the U.S. should end the system's use in its trade agreements.
Allowing corporations to sue over laws that cut into their profits, wrote the lawmakers on Monday, "threatens the policy space we need to maintain high-level public health standards, create clean energy jobs, protect the digital privacy and data-security of those we represent, and much more."
Maine state Sen. Craig Hickman (D-14) expressed concern about ISDS both as a lawmaker and "an organic farmer committed to curtailing the severe impacts of climate change and strengthening rural economies."
"Outdated trade rules like ISDS can pose a real threat to states' sustainable energy initiatives and the good-paying jobs they create,"
said Hickman. "I urge the administration to eliminate this antiquated mechanism that stands in the way of sustainable food systems and the clean energy economy we need to build for our children and grandchildren."
Note: This article has been edited to correct a reference to U.S. trade deals containing ISDS and the Americas Partnership for Economic Prosperity.
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