Colombia calls out corporate courts that block climate action and environmental protection

Colombia’s Environment Minister Irene Vélez Torres is demanding major reforms to international trade rules that she says are blocking countries from taking meaningful climate action. Speaking at the UN climate summit COP30 in Brazil, Vélez criticized the investor-state dispute settlement system (ISDS) – often called “corporate courts” – as one of the biggest barriers to transitioning away from fossil fuels.

The ISDS system allows foreign corporations to sue governments for financial losses caused by policy changes, even when those policies aim to protect the environment. This creates a troubling scenario where countries face hefty penalties for trying to phase out polluting industries or strengthen environmental regulations. “No government should have to choose between protecting nature and its people, and protecting itself from arbitrators,” Vélez stated, calling the system a relic from an era that prioritized corporate investment over national sovereignty.

Real-world examples highlight the problem: British mining giant Anglo American sued Colombia after courts halted the expansion of an environmentally destructive coal mine, while Chevron took legal action against Ecuador after the country demanded compensation for a devastating Amazon oil spill. These cases demonstrate how corporate litigation can intimidate nations from enforcing environmental protections.

For Colombia, a country historically dependent on fossil fuel exports, these international trade mechanisms essentially force continued support for extractive industries that harm the environment and contribute to climate change. Vélez argues that reforming these systems is crucial for enabling countries to pursue legitimate climate policies without facing corporate retaliation through international arbitration.