27 March 2014

Public consultation on ISDS investor protection launched today

90 days to cement public opposition against plans for investor-only safeguards in TTIP.

Simon McKeagney, Editor

The European Commission has launched a 90 day public consultation on the controversial investor protection chapter of TTIP, which includes the Investor State Dispute Settlement (ISDS) - a mechanism allowing investors to sue nations for loss of future earnings if laws are passed that may impact their profits.

The consultation period, announced in January, was due to begin at the start of March but is instead launching only today. It consists of an online questionnaire, 'which covers 12 key issues of interest, including the right to regulate, fair and equitable treatment for investors, and transparency of the ISDS system' according to statement released by the Commission. The questions are 'accompanied by relevant legal texts that the EU proposes would serve as a negotiating basis for TTIP.' A quick look at the questions, released only this afternoon, indicates that out of the 13 to be answered, only one allows for a general statement in opposition to the ISDS mechanism. This shows that the consultation period is aimed more at investment specialists than the general public.

The Commission has already included ISDS mechanisms in pending free trade agreements with Canada (CETA) and Singapore, on which the accompanying legal texts draw. Yannick Jadot, Trade Spokesperson for the Green Group said today:

"Finally the Commission has provided a hint to ISDS texts already in existence. It is a first step, and is clearly the consequence of our continuous questioning of the dangers of such a supranational instrument. We want the public to have access to the full ISDS texts in the FTAs with Canada and Singapore in order to have a more precise idea as to how ISDS would look in TTIP. We are quite optimistic that a closer look at the legal texts will open the eyes of many people regarding the dangers of ISDS for democracy and public interest policies. The question now is- will the Commission be ready to drop ISDS from TTIP, CETA and the Singapore FTA, if the majority of responses to the consultation are negative?"

Many believe there is no need for such settlement procedure between the EU and US, whose legal systems are well capable of handling such disputes without the need for a private arbitration courts. The Greens entirely reject the approach of giving extra-constitutional rights to foreign investors, thereby discriminating not only against national businesses, but against citizens who will not have access to such courts.

Leading Green candidate Ska Keller wrote yesterday on how investor-state lawsuits are a threat to democracy:

"The Commission argues that there are already thousands of bilateral agreements which include ISDS. Therefore we must continue with this practice. I vigorously disagree with this argument. So far, only nine EU Member States have concluded bilateral investment treaties with the United States. TTIP would be a huge extension in the use of ISDS, and have an untold impact. I am of the opinion that the entire system of international arbitration is worth re-evaluating. States such as South Africa have already shown that you can renegotiate investment treaties to exclude ISDS."

The American based NGO, Public Citizen released a detailed map last year which demonstrates the possible proliferation of investor-state lawsuits that could take place under TTIP. A total of 75,000 subsidiaries from the EU and US operate in both regions, which could open up the possibility of an unprecedented number of claims in the future.

There are also concerns that such courts do not allow fair and equitable access to justice. Pia Eberhardt of the Corporate Europe Observatory suggested (March 13) that the proposed reforms of ISDS in TTIP by the Commission do not go far enough, and will do little to address the concerns of many. An audio extract of her speech can be found here.

Recent backlash has also come from member states, with Germany and France both saying ISDS must not make up a final agreement. But as of yet, there is still staunch support for ISDS from the Commission.

See a list of examples of ISDS in action compiled by Friends of the Earth.

Find the online questionnaire and more information on the consultation period here. Members of the public have until June 21 2014 to submit their contributions.

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It is an outrageous idea to put foreign investors above the rule of law by a people.

David Foster

Companies should do not have a right to profits where common sense says unregulated development would damage the environment.

Robert Boyle


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