20 April 2015

ISDS: Some battles won, but a long road ahead

Vote results in the European Parliament may indicate the tide is beginning to turn for investor-rights

Simon McKeagney, Editor

Correction: the original post said that committees on Internal Market and Consumer Protection (IMCO) and Committee on Industry, Research and Energy (ITRE) narrowly carried pro-ISDS language. In fact, amendments on ISDS did not carry, and as a result no mention of ISDS were included in the final opinions. The stance against ISDS was not only opposed by ECR in the Environment, Public Health and Food Safety (ENVI) committee. EPP and a number of ALDE MEPs also voted against it. [Updated: 19:30, April 20]

Members of the European Parliament are gearing up for a big-TTIP vote at the plenary session on June 10 with a series of committee opinions, which concluded on Thursday.

In total 14 committees wrote and voted on opinions relating to TTIP in the last month and a half, and all have exposed interesting divisions amongst MEPs and political groups on the contents of the deal, particularly on the controversial question of the investor-state dispute settlement (ISDS).

Of the 14 opinion giving committees, only one carried pro-ISDS language, mentioning the need for a "reformed ISDS". The Committee on Agriculture and Rural Development (AGRI) carried a reform paragraph comfortably by 27 votes to 16.

The committees on Development (DEVE), Foreign Affairs (AFET) Internal Market and Consumer Protection (IMCO) Industry, Research and Energy (ITRE) and Culture (CULT) made no mention of ISDS, and the language in Civil Liberties, Justice and Home Affairs (LIBE) remains undecided. In the Economic and Monetary Affairs (ECON) the anti-ISDS paragraph was voted down by a single vote (28 to 29). But the remaining 6 committees included clear anti-ISDS positions, showing tentative signs that ISDS support is losing ground.

Employment and Social Affairs (EMPL) won a clear majority against ISDS, with the statement "We oppose the inclusion of any form of private arbitration courts in TTIP" receiving 32 votes to 19. The final result for the opinion overall was 30 in favour, 18 against and 3 absentions.

Environment, Public Health and Food Safety (ENVI) overwhelmingly supported their TTIP-opinion, led by Green rapporteur Bart Staes, in which the majority supported the anti-ISDS stance, aside from the ECR and EPP group, and a number of ALDE MEPs: "Calls on the Commission to oppose the inclusion of ISDS in the TTIP". The final vote was 58 to 8, with 2 abstentions.

In the Committee on Constitutional Affairs (AFCOthe paragraph against ISDS was adopted with 14 in favour (6 S&D, 2 GUE, 2 Greens/EFA, 2 EFDD, 1 ECR and 1 NI) and 11 against (8 EPP, 2 ALDE and 1 ECR). It states:

"To oppose the inclusion of an ISDS mechanism in TTIP given the EU's and US' developed legal systems and that a state-to-state dispute settlement, and the use of national courts are the most appropriate tools to address investment disputes;"

In a tight vote in favour (12 votes to 11) Legal Affairs (JURI) included several anti-ISDS remarks, stating that they were:

"of the firm opinion that a possible TTIP agreement should not contain any investment protection standards and ISDS mechanism as the given level of investment protection in the EU and the US is fully sufficient to guarantee legal security;"

"Calls on to Commission to oppose the inclusion of an ISDS mechanism in TTIP given the EU's and the United States' developed legal systems..."

" oppose the inclusion of ISDS in TTIP, as other options to enforce investment protection are available, such as domestic remedies.."

The Committee on Petitions (PETI) breezed through with similar anti-ISDS language, voting 25 in favour, 2 against and 3 abstentions:

"Calls on the Commission to oppose the inclusion of ISDS in TTIP, as other options to enforce investment protection are available, such as domestic remedies"

Finally, while TRAN’s anti-ISDS paragraph, "stresses that ISDS is not necessary in a trade agreement between countries with fully functioning legal systems", initially carried, in the end the entire opinion was voted against.

What does this mean?

The Committee on International Trade (INTA) now has the difficult task of taking on board the 13 opinions that survived their committee’s votes. The chairman of the INTA committee, Bernd Lange (S&D) has quite a lot of discretion when it comes to including or dismissing the paragraphs that will ultimately form a resolution to be voted by INTA on May 28. He is on the record as one of the more critical voices against ISDS, but whether that will be enough remains to be seen.

INTA now forms a tough bottleneck for anti-ISDS language to get through before the full plenary vote on June 10. There is a chance that INTA members could vote against any language that opposes the inclusion of ISDS, if compromises cannot be reached. Even then, at plenary, such language could still fall.

The next few weeks in the run into to the INTA vote are therefore crucial. While the overall resolution on TTIP may not make-or-break the negotiations, it will certainly bolster the Commission’s position, or burden it with an array of non-negotiable redlines on a host of issues. We can be sure that the Commission will monitor events closely. A close vote on the overall resolution, as we have seen in many committees in recent weeks, could be a worrying sign of what is to come down the road. After all, once the negotiations are complete, it will be the European Parliament that has the final say.

Read further analysis by Vote Watch: How will Parliamentarians vote on TTIP?

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Richard Dennis

Any law that gives corporations power over government has got to be defeated otherwise it is manna from from heaven for Murdoch and co.

Sheila Anderson

I agree with Richard Dennis

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