CORPORATIONS could sue for millions over Scotland’s longer route out of lockdown, trade unions say.

Unison, Unite, the RMT and other unions have sounded the warning as part of the Trade Justice Scotland coalition, a 25-strong network that also includes the Common Weal think tank, Women for Independence and Global Justice Now.

It has urged ministers to take action to prevent transnational corporations mounting court challenges for lost profits through the investor-state dispute settlement (ISDS) system.

Written into many trade and investment agreements, it allows foreign investors to sue governments in secretive tribunals outwith their national legal system for amounts far higher than are likely to be available to them in domestic courts. 

The movement claims cases could arise from actions administrations have taken to save lives, protect jobs and safeguard livelihoods.

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In Peru, the suspension of toll road charging has led to the threat of such action.

Trade Justice Scotland claims Scotland may be at risk due to the way its anti-Covid actions have differed from those in England, with building sites closed earlier and businesses kept shut for longer as part of public health measures. Similar calls have been made by groups in 90 countries

worldwide, with more than 630 organisations including Oxfam and Medecins Sans Frontieres backing the call to guard against such action.

Signatories want Holyrood to act to help end the use of ISDS for good.

Jane Herbstritt of Global Justice Now said Westminster could also be in the frame. She said: “ISDS cases against the Scottish and UK governments after lockdown would mean money that could have been spent investing in public services, adequate incomes for keyworkers, and a green economic recovery would instead go to corporations.

“Many of us have lost income and worse during lockdown because we were abiding by the rules set by the Scottish and UK governments to protect people’s lives.

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“Why should corporations be able to sue for their lost profits, which could then deny citizens the benefits of public investment that would ensure an equitable economic recovery?

“We urge the First Minister to call for the suspension of ISDS, and ultimately for it to be removed from current and future trade and investment deals negotiated by the UK Government.”

Stephen Smellie of Unison Scotland added: “Global corporations using ISDS to line the pockets of shareholders will be acting against the public interest and hampering us all in addressing the needs of our communities.

“It is therefore essential that steps are taken by the government to prevent this and to protect services.”

A Scottish Government spokesperson said: “Scottish Ministers and officials met representatives of Global Justice Now and the Trade Justice Scotland Coalition recently to discuss their concerns over ISDS and other aspects of international trade and investment agreements.

“The Scottish Government’s engagement with the UK Government in the development of future trading arrangements will be informed by these and other discussions.”