"The World Bank’s investor arbitration court and bilateral trade agreements have given Global 500 companies unprecedented power over low- and middle-income developing countries. This “corporate rule” undermines governments’ authority to protect human rights and natural resources, according to a new report released today by Food & Water Watch and the Institute for Policy Studies. The report was released just after a case was heard in which British investor Biwater is demanded $25 million from Tanzania, the 15th poorest country in the world, over a failed water project.
"When contracts fail, as they inevitably do when private corporations are unwilling to provide the needed investment to maintain, build and expand the water systems, investor protections allow the companies to demand outrageous settlements from the countries they failed to serve,” said Food & Water Watch Executive Director Wenonah Hauter. “The Biwater case is a perfect example of how bilateral investment rules are skewed against poor countries like Tanzania. Biwater is demanding compensation for lost potential profits despite the company’s failure to provide water for Dar es Salaam.”