Dark Money Investigations: News

Geoffrey Cox made £800,000 at law firm that helps rich companies sue poor states

Exclusive: Under-fire Tory MP’s second job is at London-based law firm Withers, which boasts of work representing wealthy multinational companies

20190502_155624.jpg Lou Ferreira 2022.jpg
Nandini Archer Lou Ferreira
10 November 2021, 3.52pm
Geoffrey Cox has earned more than £800,000 for his work for law firm Withers LLP in the past year
Malcolm Park/Alamy Live News

Tory MP and millionaire Geoffrey Cox’s second job is at a law firm that helps multinational companies to sue nations for introducing any measures that harm their profits.

In the past year, Cox, who has faced calls for resignation following revelations about his work for the British Virgin Islands, has received more than £800,000 for his work as a consultant for law firm Withers LLP. 

Withers boasts of its work representing wealthy firms in “investor-state dispute settlements” (ISDS), controversial tribunals that allow big, foreign companies to sue countries for any actions that might affect their profits.

ISDSs have previously been used by a tobacco company attempting to prevent plain packaging for cigarettes in Australia and by a French corporation seeking to challenge Egypt’s minimum-wage laws.

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Earlier this year, energy giant RWE filed a claim against the Dutch government, demanding €1.4bn in compensation following the state’s decision to phase out coal.

London-based Withers LLP is currently representing the Qatar National Bank, which is suing South Sudan after it defaulted on a $700m loan borrowed during its civil war. The loan amount, which is more than double South Sudan’s 2018 healthcare budget, was allegedly used to fund essential food and agricultural imports, pharmaceuticals, construction materials and refined oil products to help offset the effects of decreased oil production during its conflict with Sudan.

It should be unthinkable for a member of Parliament to support the firms profiting from this practice

Nick Dearden, Global Justice Now director

Withers is also representing German metal processor Scholz Holding in its case against Morocco, following the country’s ban on the export of processed scrap metal to the EU and on the import of certain types of steel. Scholz Holding claims the policy favours a local business over its Moroccan subsidiary.

Cox’s lucrative work for Withers has sparked fresh criticism about his interests outside Parliament. The former attorney general has faced calls for an investigation after it emerged that he was paid to advise the government of the British Virgin Islands in an inquiry launched by the UK government into alleged corruption in the tax haven. During lockdown, Cox even voted remotely in the UK Parliament from the Caribbean islands.

Global Justice Now director Nick Dearden said: “It should be unthinkable for a member of Parliament to support the firms profiting from this practice. But Geoffrey Cox has form protecting corporations from democratic mandates, raking in huge fees for advising the British Virgin Islands – a tax haven.

“ISDS clauses hand multinational corporations the power to overrule governments and hold entire nations to ransom to protect their profits. It’s a fundamentally anti-democratic practice that protects the likes of fossil fuel companies over all else – and could endanger the climate commitments made at COP26.”

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Potential for serious harm

ISDSs have been controversial for decades. Companies can request compensation for state actions they claim unfairly affect their finances, including the profits they expected to make. The system allows corporations to challenge – and even change – policies that will hit their bottom line. This can cost nations millions, even billions of pounds, in some disputes – meaning it has the potential to seriously harm a poorer nation.

Previous high-profile cases have challenged states’ corporate tax policies and minimum-wage laws that threatened investors’ profits; government actions to protect the environment and limit contributions to climate change; and industry efforts to redress racial inequalities in post-Apartheid South Africa.

Most international investment treaties and free trade deals allow companies to request compensation for state actions they claim unfairly affect their finances, including the profits they expected to make. Defending these cases, even if states are successful in the end, can take years and cost millions of dollars.

In 2006, for example, Italian granite investors (not represented by Withers) filed a claim against South Africa, two years after its post-Apartheid Mineral and Petroleum Resources Development Act came into effect. The new laws, which required companies to reapply for mining licenses and mandated a 26% ownership stake in the country’s mining companies by Black South Africans, were intended to redress longstanding inequalities in the mining sector as a result of racial Apartheid.

MPs’ first duty is to speak on behalf of our constituents... being an MP ought to be a full-time job

Jon Trickett, Labour MP

The Italian investors claimed that the new charter amounted to ‘unfair discrimination’ against them and had unlawfully expropriated their investments, and demanded $350m in compensation. After a four-year legal battle, the Italian firms dropped their claims and the tribunal ordered them to contribute €400,000 towards South Africa’s costs, which, The Guardian reported, still left South Africa “with €5m in unreimbursed legal fees”. Despite the case having been dropped, South Africa reportedly reduced the required 26% ownership stake to 5% for the firms.

Labour MP Jon Trickett told openDemocracy that MPs such as Cox should be barred from lucrative second jobs. “MPs’ first duty is to speak on behalf of our constituents and our country,” he said. “There ought to be no action which could give rise to a perception of receiving income in service of other states or of appearing to act in service of enterprises taking action against supposed allied states.

“The simplest way to achieve this is to ban all second jobs for MPs. In any event, being an MP ought to be a full-time job.”

Withers LLP did not respond to a request for comment.

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