May 28, 2016

FFII comments on TTIP human rights assessment

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ECORYS has published a draft human rights assessment (sustainability impact assessment) on the trade agreement being negotiated between the EU and the United States (TTIP). Today the Foundation for a Free Information Infrastructure (FFII) has sent an email to ECORYS noting issues regarding intellectual property rights, investor-to-state dispute settlement (ISDS / ICS), data protection, and openness.

Footnotes per section, text continues after footnotes.

Intellectual property rights

The word “ACTA” does not appear once in the draft report. ACTA analysis has shown that intellectual property rights enforcement may seriously threaten fundamental rights at various levels. [1] Since the European Parliament rejected ACTA, the commission has published draft agreements with Canada and Singapore. The first strengthens the position of patent trolls; the second contains higher damages than ACTA. [2] The commission did not learn much from the ACTA process. As a result TTIP potentially threatens fundamental rights. Even before the start of the negotiations groups warned against IP in TTIP. [3]

Citizens in Europe and elsewhere are harassed by software patent trolls, and experience issues regarding sequential innovation, remixing, and access to knowledge and culture. The FFII has argued that the EU should bring its IP law into line with human rights obligations. [4] TTIP may undermine this through exportation of EU law.

Foreign investors could use investor-to-state dispute settlement (ISDS / ICS) to challenge European decisions regarding intellectual property rights. This may make it too costly to solve associated human rights issues. See FFII, section on intellectual property rights. [5] For instance, companies could use ISDS / ICS in trade agreements to challenge refusals to grant software patents. [6]

[1] https://www.greens-efa.eu/fileadmin/dam/Documents/Studies/ACTA_fundamental_rights_assessment.pdf
[2] https://blog.ffii.org/tentative-remarks-on-leaked-ceta-ip-chapter/ ; https://blog.ffii.org/acta-plus-damages-in-eu-singapore-free-trade-agreement/
[3] http://www.citizen.org/IP-out-of-TAFTA
[4] http://people.ffii.org/~ante/ipred/FFII-IPRED-2013-03.pdf
[5] https://blog.ffii.org/eu-commission-isds-proposal-a-threat-to-democracy-and-civil-rights/
[6] https://blog.ffii.org/eu-commission-goes-into-denial-mode-regarding-effect-isds-on-software-patents/

Investor-to-state dispute settlement (ISDS / ICS)

The draft report contains sections on ISDS / ICS, for instance page 191:

“5.4.2. Investment court system (ICS) explained and the possible environmental impacts”

Draft report footnote 350:

“Furthermore, this section is not based on a thorough legal analysis of the draft ICS, but an economic impact analysis on the main publicly available EC position papers describing the objectives of ICS.”

The draft report does not provide a credible human rights assessment. No thorough legal analysis, no mention of serious analyses, just relying on European Commission position papers describing the objectives of ICS. The mention of this too limited approach is hidden in a footnote. With such a limited approach, the draft report should not have drawn any conclusions on ISDS / ICS. However, the report does not shy away from reaching conclusions, for instance:

“It is clear that the new proposed ICS, although not yet accepted by the US negotiators, can take away many of the previous concerns.”

The too limited approach does not provide a solid basis for this or other conclusions. Moreover, a human rights assessment should investigate which concerns remain.

Some examples of shortcomings in the draft report. Draft report page 191 and 192:

“The new system should resolve disputes between investors and states (Investment Court System) and includes an appeal mechanism, qualified judges and transparent proceedings.”

The draft report fails to note the critique by Germany’s largest association of judges and public prosecutors and the European association of judges. According to these associations the adjudicators would not be independent. [1] The word “judges” should be avoided.

Draft report:

“Investment arbitration can only occur under TTIP’s ICS if new legislation is discriminative.”

First, the draft report fails to notice other grounds such as fair and equitable treatment and the possible importation of old, very open provisions through a most favoured nation provision. [2]

Second, the commission’s new language on substantive rights was criticised in a joint statement signed by more than 110 academics. [3] The language on substantive rights has not changed substantially since.

Third, ISDS tribunals have seen disparate treatment by enforcement agencies (allowed under local law for good reasons) as discriminative. See page 8, also applicable for the TTIP proposal. [4] Also note the paper’s remarks on overbroad interpretation of legitimate expectations on page 9.

Draft report:

“When non-discriminative legislation is introduced, we find that the right to regulate is safeguarded under TTIP’s ICS. As such, we can conclude that TTIP does not have a direct impact on a government’ ‘right to regulate’ and only a minor indirect impact due to regulatory chill (see below);” (fn removed)

The draft report overlooks the critique on the right to regulate clause. [5] The draft report also overlooks that in the draft agreements with Canada and Vietnam the right to regulate clause was weakened even further. [6]

Noteworthy, the ISDS / ICS section in the draft FTA with Canada (CETA) arguably is not conform the European Parliament TTIP resolution, which is important as CETA may be a model for TTIP. [7]

[1] http://bilaterals.org/?opinion-on-the-establishment-of-an&lang=en ;
http://www.iaj-uim.org/iuw/wp-content/uploads/2015/11/EAJ-report-TIPP-Court-october.pdf
[2] https://blog.ffii.org/eu-commission-isds-proposal-a-threat-to-democracy-and-civil-rights/
[3] https://www.kent.ac.uk/law/isds_treaty_consultation.html
[4] http://ccsi.columbia.edu/files/2015/11/TPP-entrenching-flaws-21-Nov-FINAL.pdf
[5] see Van Harten, point 4 http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2692122 ; FFII section Ineffective right to regulate https://blog.ffii.org/eu-commission-isds-proposal-a-threat-to-democracy-and-civil-rights/ ; S2B section The “right to regulate” has not been preserved http://www.s2bnetwork.org/isds-courting-foreign-investors/
[6] https://blog.ffii.org/ceta-who-pulled-the-plug-on-the-right-to-regulate/
[7] https://blog.ffii.org/ceta-isds-not-conform-european-parliament-resolution/ See also for CETA: https://www.cigionline.org/publications/isds-revised-ceta-positive-steps-it-gold-standard

Data protection

The draft report contains, page 164:

“Human right to protection of personal data”

Draft report:

“However, we do not expect TTIP to have an impact on the human right to the protection of personal data because the TTIP talks do not include the personal data sharing, so the expected effect is non – existent.”

Draft report:

“At this moment, when personal data is not included in the TTIP mandate, there is no reason to talk about the effect of TTIP on the human right to protection of personal data.”

The draft report fails to note:
– there are provisions on cross-border data flows and data protection in other EU trade agreements which arguably provide less protection than the EU Charter of fundamental rights; the US may demand the same treatment; [1]
– there have been talks on data flows;
– the US tabled a proposal; [2]
– GATS article XIV and similar have weaknesses; [3]
– EP resolution on TTIP paragraph (b)(xii) tries to avoid weaknesses in GATS article XIV but still proposes it as a model, which may invite issues (see also Public Citizen); [4]
– most favoured nation clauses may lead to importation of weaknesses;
– investors could exploit weaknesses in GATS, TTIP and other agreements and arrangements using ISDS / ICS. [5]

In sum, provisions on data flows, most favoured nation clauses and the inclusion of ISDS / ICS could have major effects on data protection.

[1] for instance the draft for CETA: https://blog.ffii.org/ceta-will-harm-our-privacy/ see also footnote 4 here: https://blog.ffii.org/ceta-isds-and-data-protection/
[2] https://blog.ffii.org/us-wants-to-outlaw-eu-cloud-in-ttip-negotiations/
[3] https://blog.ffii.org/ceta-places-itself-above-eu-charter-of-fundamental-rights/
[4] http://www.europarl.europa.eu/sides/getDoc.do?pubRef=-//EP//TEXT+TA+P8-TA-2015-0252+0+DOC+XML+V0//EN ; https://www.citizen.org/documents/general-exception.pdf
[5] for a conflict model see here: https://blog.ffii.org/ceta-isds-and-data-protection/

Openness

Draft report page 162:

“Something else that complicates the transparency issue is the difficulty to draw a line between more transparency and the risk of creating a negative impact on the negotiations because too much is known about the negotiating position of the European Commission.”

This seems not correct as on page 161 the draft report says:

“All negotiating proposals from the EU side are made public on the website of the European Commission”

So the negotiating position of the European Commission is already known.

Draft report page 163:

“Having carefully studied the various ways that have been used to reach out – described above – the degree to which the US, the EU counterpart, deals with transparency in TTIP, and the way transparency was dealt with in previous trade agreements, we do not consider this to be a valid concern anymore.”

Neither a horrible past nor the behaviour of a negotiating partner disqualifies valid concerns. Modern deep integration trade deals are hardly reversible. Systemic flaws in these deals will have long lasting and deep effects, may deeply change societies.

Legitimacy, quality and balance are essential aspects of regulations. The Treaty on European Union (TEU) provides guidance on how to ensure legitimacy, quality and balance. Article 1 TEU formulates openness as an inextricable characteristic of the EU: “an ever closer union among the peoples of Europe, in which decisions are taken as openly as possible and as closely as possible to the citizen”.

Article 1 of the TEU implies the Union can not take a path that leads to confidentiality, if a path leading to openness is available. International negotiations have to take place as openly as possible and as closely as possible to the citizen.

International agreements are also problematic as in the ratification process the European Parliament can only vote yes or no. The EU has “fast track” by constitutional design. In a yes or no vote it may easily happen that badly drafted definitions slip through or that systemic failures are not noticed. A tension exists between the aim to reach legitimacy, quality and balance, and the way international agreements are negotiated and ratified.

Openness leads to better results and discrimination in access to information leads to biased results; participation is a human right. The “freedom to receive information” embraces a “right of access to information”. [1] See also the Brussels Declaration on Trade and the Internet. [2]

The concerns are valid; the tension noted above remains. Secrecy interferes with human rights. The commission may argue that the interference is necessary in a democratic society, and is proportionate — we would disagree. A human rights assessment should at least note the interference. ECORYS may stay agnostic regarding “necessary in a democratic society”, and “proportionate”.

[1] http://people.ffii.org/~ante/ttip/FFII-Ombudsman-TTIP-consultation.html
[2] https://www.eff.org/files/2016/03/15/brussels_declaration.pdf