The Trans-Pacific Partnership (TPP) is now dead in the lame duck, and with Donald Trump’s victory, most probably for good. But, there are remaining issues arising from the Investor-State Dispute Settlement (ISDS) provisions, since ISDS is included as a matter of course in all pending US trade agreements.

The purpose of ISDS is primarily to provide protection and mitigate risks for large multinational organizations headquartered in the United States, but wishing to increase their profits through large, and, at times risky, investments in other nations. I’ve argued in the past that the Government mitigating risks incurred by multinationals is not consistent with a public purpose standard for trade policy, or for that matter human rights.

But apart from that, even if it were a valid purpose of policy, ISDS is a terrible instrument for achieving it, in part because of its two critical aspects and some of their implications.

The first aspect is that the amounts of money awarded by a tribunal are up to the discretion of the panelists, alone. So corporations can ask for awards in the billions or hundreds of billions of dollars, or some other currency unit of account, and tribunals can decide to award that amount or an amount as high or as low as the tribunal, in its wisdom based on its estimates of the amount of the claimant’s lost expected profits, decides is just.

It makes no difference what the financial state of the host nation is at the time of the award or its capability to pay, or the capability of its people to bear the burden of taxation to pay that award, or the amount of suffering that complying with such an award would cause. There are no mitigating circumstances that these ISDS private tribunals would be forced to recognize, and no standards of public international law that they would be constrained to apply. Instead, the sole standard involved is corporate profits über alles.

So, in effect, the tribunals, under the TPP, and other trade agreements with ISDS provisions have the power to destroy nations, because the power to assess fees in unlimited amounts against host nations is the power to destroy them, every bit as much as the authority of government (as John Marshall said) to tax individuals and businesses within a nation is also the power to destroy those individuals and businesses. And, the power to destroy a nation is the power to exercise a kind of negative sovereignty over it, constraining its activities in ways that shape its future and its destiny.

The second critical aspect, of the decisions of ISDS tribunals is that they are not, practically speaking, subject to appeal, review, revision, and overturning by some higher authority accountable to the people of the host nation. Not even one as remote from the people as an institution like the U.S. Supreme Court, which, at least is grounded in the Constitution of the United States.

This aspect, of course, raises the issues of subverting the consent of the governed, and subordinating popular sovereignty to the higher authority of the decisions of the ISDS tribunals about what kinds of legislation will be subject to the discretionary penalties of the tribunals and which will not.

So, keeping these two aspects of ISDS tribunal decisions in mind, The White House is simply not telling the truth when it says:

ISDS does not undermine U.S. sovereignty, change U.S. law, nor grant any new substantive rights to multinational companies.

When a nation cannot appeal an ISDS tribunal decision to its own supreme legal authority, then its sovereign authority has been undermined. Of course, it can always take back its authority by either withdrawing from the trade agreement according to the agreement’s rules for withdrawal, or simply by breaking the trade agreement through repeal. But neither of these ways of getting out change the fact that, while the US lives under the agreement, its sovereignty is constrained by it.

Also, it is a half-truth to say that ISDS does not change US law. There is no legal power to do that directly. But since the power to assess financial penalties of unlimited amounts is the power to destroy, laws being considered or already passed by a government that incur or threaten to incur heavy penalties through past or pending ISDS awards can certainly coerce sovereign nations to refrain from passing, or to repeal the laws that may have effected or may affect the actual or expected profits of a multinational corporate or individual investor.

There are many cases of this happening in the history of ISDS applications. Global Trade Watch offers many examples, and many more are cataloged in the recent BuzzFeed series on ISDS.

Lastly, the idea that ISDS grants no new rights to multinational companies is another false flat statement by a White House that certainly knows better. The three pending trade agreements provide companies and individuals the right to “sue” host governments, outside the frameworks provided by their own legal traditions and systems, and public international law forums, in private international tribunals whose decisions under the TPP and the other pending agreements are binding on the nation states involved.