Defend democracy: draft answers for new ISDS consultation

The European Commission has launched a consultation on an investor-to-state dispute settlement (ISDS) variant: a multilateral investment court. 1 The consultation is flawed; it is so narrow that social and environmental impacts may not show up in the consultation results. This is irresponsible, as the system as a whole will strengthen investments vis-à-vis democracy and fundamental rights. This undermines our values, ability to reform, and ability to respond to crises, including climate change. Mankind faces an existential threat and the commission buries its head in the sand!

Reject CETA

Update: The European Parliament gave consent to CETA. It failed to defend democracy. Now national parliaments will have to decide on CETA. There may also be referendums and court cases. See also EDRi’s press release; procedure file; INTA report; roll call vote (point 1, A8-0009/2017).

Multilateral investment court assessment obscures social and environmental impacts

DRAFT

The European Commission has launched a consultation on a multilateral investment court. This paper is the attachment to the FFII submission. The multilateral investment court would impede action on climate change and reform of intellectual property rights, and would risk undermining data protection. Submission below or pdf version. Table of Contents

1 Introduction
2 Issues with the Inception Impact Assessment

2.1 Social and environmental impacts
2.2 The one sentence baseline scenario is not comprehensive

3 A more comprehensive baseline scenario shows growing impacts

3.1 Substantive provisions, existing impacts

3.1.1 No or a limited right to regulate

3.2 ISDS
3.3 Systemic issues

3.3.1 Specialised courts tend to interpret expansively
3.3.2 Development of supranational investment protection outside of democratic scrutiny
3.3.3 No supreme court scrutiny
3.3.4 Values and ability to respond to crises

3.4 Unfairness, greatly expanded exposure, and lock in

3.4.1 Unjustifiable unfairness
3.4.2 Greater scope
3.4.3 Greater coverage of foreign direct investment
3.4.4 Lock in

3.5 Baseline scenario shows growing impacts

4 Multilateral investment court scenario shows growing impacts

4.1 Continued growing impacts
4.2 Potentially marginal improvement
4.3 Negative aspects

5 Conclusion
6 Attachment: impacts, three examples

6.1 MIC impedes action on climate change
6.2 MIC impedes intellectual property rights reform
6.3 MIC risks undermining data protection

1 Introduction

This position paper is the attachment to the FFII submission to the public consultation on a multilateral reform of investment dispute resolution.

New ISDS consultation seems surreal

The European Commission has launched a consultation on an investor-to-state dispute settlement (ISDS) variant: a multilateral investment court. 1 In an email the commission confirms the consultation has a narrow scope. The commission does not want feedback on the system as a whole. This way the system’s social and environmental impacts may go unmentioned in the consultation results. This is irresponsible, as the system as a whole will strengthen investments vis-à-vis democracy and fundamental rights This undermines our values and ability to respond to crises, including climate change.

Consultation on ISDS successor obscures impacts

The EU commission has launched a consultation on a multilateral investment court (MIC), an investor-to-state dispute settlement (ISDS) variant. 1 The commission does not expect a multilateral investment court to cause social or environmental impacts. 2 This is remarkable as the current ISDS system causes serious impacts. And even worse, the consultation seems designed to obscure the social and environmental impacts. In an email to the commission I explained the issues and asked to publish a more meaningful Inception Impact Assessment and consultation.

Multilateral investment court would impede measures on climate change

The European Commission has launched a consultation on a multilateral investment court (MIC). The MIC would be a successor to investor-to-state dispute settlement (ISDS). Mankind faces an existential threat: climate change. The data is disconcerting and shows our societies are not on top of the issue. Further reforms are needed; reforms will harm vested interests.

A disappointing TTIP human rights assessment

ECORYS published a final draft human rights assessment of the trade agreement with the US (TTIP). The official name is a Trade Sustainability Impact Assessment (TSIA). I provided feedback on an earlier draft, see here. In my opinion, the final draft is disappointing. I will give two examples.

European Parliament resolution: check legality ISDS/ICS in CETA

Members of the European Parliament want the EU’s Court of Justice to check whether a parallel legal system in the trade agreement with Canada (CETA) is compatible with the EU treaties. The parallel legal system, known as ISDS / ICS, is only accessible to foreign investors. Eighty-nine members tabled a resolution. The Parliament will vote next week, Wednesday 23 November 2016. According to associations of judges (one, two), academics (letter from over 100 law professors) and NGOs (ClientEarth, two pager), the ISDS / ICS parallel legal system is not compatible with the EU treaties.

MEP Schaake unconvincingly defends ISDS in CETA

Member of the European Parliament Marietje Schaake used harsh words on Wallonia for (temporarily) blocking the signing of the EU-Canada trade agreement (CETA): unbelievable, shameful political opportunism, really incomprehensible. In the press release she also defended the inclusion in CETA of investor-to-state dispute settlement (ISDS), a parallel legal system for multinational investors. In this blog I will argue that Schaake supports an approach that puts at risk democracy and the rule of law. Schaake is the liberal groups’s (ALDE) spokesperson on trade. Wallonia has seriously looked at CETA for years.

A deceitful attempt to get CETA signed

Update: new version of Declaration, see below

The European Commission and Canadian government work on a “Joint Interpretative Declaration” that should convince governments that have doubts about signing the EU-Canada trade agreement (CETA). The Declaration does not change CETA’s text. It does not give a clarification of provisions. Take the first paragraph of the section on Investment Protection:

“CETA includes modern rules on investment that preserve the right of governments to regulate in the public interest including when such regulations affect a foreign investment, while ensuring a high level of protection for investments and providing for fair and transparent dispute resolution. CETA will not result in foreign investors being treated more favourably than domestic investors.”