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13 January 2015
Widespread rejection of investor privileges in public consultation
The Commission today published it’s much anticipated “qualitative analysis" of its public consultation on the Investor-State Dispute Settlement (ISDS) in EU-US trade deal, which received a record-breaking number of responses when it was launched last March.
EU Trade Commissioner Cecilia Malmström revealed that the findings showed that there was “huge scepticism" around the ISDS mechanism, with 97% of respondents either voicing opposition to or concerns around TTIP or opposing or expressing general concerns about investment protection/ISDS in TTIP. Only 3% provided comments on how to improve the ISDS mechanism.
Yet despite the overwhelmingly negative response, the Commission has concluded that the results show that “further improvements [to ISDS] should be explored” none of which propose the removal of ISDS from TTIP.
“The publication of the report on the consultation is only a first step. Further discussions with the other EU institutions and stakeholders will be necessary.” They have identified the need to seek improvements of ISDS in the areas of:
- the protection of the right to regulate;
- the supervision and functioning of arbitral tribunals;
- the relationship between ISDS arbitration and domestic remedies;
- the review of ISDS decisions for legal correctness through an appellate mechanism.
Today NGOs and civil society groups cried foul of the Commission’s attempt to gloss over the resounding calls for the controversial mechanism’s removal. Jos Dings, T&E’s director and member of the EU’s TTIP advisory group, said:
“Despite the overwhelming call on the Commission to drop ISDS, it has obscured the true extent of opposition in order to ram through its agenda to reform the unreformable. Commissioner Malmström wants to make a fresh start on trade but she has just made a false one.”
Campaigners have helped bring to European citizens’ attention the risks surrounding the investor-state dispute settlement, a clause virtually unheard of a year ago, which allows corporations to sue governments for passing laws that may negatively impact their investments. At the start of 2014, a series of online platforms were created to allow European citizens to express their opposition to ISDS via third party sites, a common feature of online campaigning.
But at the conclusion of the consultation last July, former trade commissioner Karel De Gucht suggested that duplicate answers may be “treated as one.” Whilst Malmström has now accepted the responses as valid, she will not move to push for its removal, but has indicated that the consultations findings will be taken into account under plans to develop a EU trade policy dossier in the spring.
Elephant in the room
Germany had been one of the most vocal opponents of ISDS, along with a number of EU countries, and even the new Commission President Jean-Claude Juncker. Germany had expressed reservations about ISDS in the EU-Canadian agreement (CETA) last year. It maintained that it would not agree to signing CETA until after the ISDS consultation had been concluded, but has since u-turned on its decision. However, today’s results leave a huge question mark hanging over the future of such investor VIP treatment in EU trade policy.
Commenting on the Commission's analysis, Green trade spokesperson Yannick Jadot said:
“The elephant in the room is that there is clear and overwhelming public opposition to ISDS. Instead, the Commission's analysis of the consultation merely focused on the responses to the more specific questions. This analysis, combined with the superficial transparency steps on TTIP presented by the Commission, shows how the Commission is trying to fob-off public concerns and demonstrates a total lack of respect for the public and civil society and their concerns.
"This public opposition cannot be ignored. ISDS has no place in TTIP or EU trade policy in general. It is an opaque procedure which can be and is used by multinational corporations to whittle away EU standards and regulations across a range of policies from the environment to food safety to social protection. The Commission and EU member states should finally acknowledge this and confine ISDS to history.”
Currently, US investment in the EU is three times greater than with the whole of Asia. 19 out of 28 member states, representing 93% of the EU economy, currently do not offer ISDS protection to US investors. To date there are nine known claims in EU-US trade relations, all of them led by US investors. Including ISDS in CETA and in TTIP will allow up to 75,000 subsidiaries of multinational companies gain access to the mechanism, opening up EU governments to unprecedented risk of being sued for regulating for the common good.
See the map of subsidiaries who would gain access to the use of ISDS here.
10 reasons why Europe and America DO NOT need ISDS here.
The press release on DG Trade's website: http://trade.ec.europa.eu/doclib/press/index.cfm?id=1234
The Report (141 pages):http://trade.ec.europa.eu/doclib/docs/2015/january/tradoc_153044.pdf