Hosted by BEUC, Friends of the Earth Europe and AK EUROPA
A fact based discussion on the need for ISDS within TTIP
Click here to read our Storify with videos, photos and tweets from the conference!
The conference on ISDS organised by BEUC, Friends of the Earth Europe and AK EUROPA on 9 December stood up in the crowded landscape of Brussels’ TTIP events for the variety and high-profile of panellists and attendees, who came from different continents and represented heterogeneous opinions.
It was a unique opportunity for policymakers and stakeholders to exchange and debate ideas in a series of fact-based panel discussions moderated by the Financial Times’ world trade editor, Shawn Donnan.
The programme opened with keynote speeches from the director generals of the three organisations hosting the event and EC director Rupert Schlegelmilch, it went through features and problems of existing ISDS regimes and it addressed possible solutions and alternatives.
The closing high-level panel wrapped up the debate with interventions by the US Ambassador to the EU Anthony Gardner Luzzatto, INTA Chair MEP Bernd Lange, President of Public Citizen Robert Weissman and Austrian MP Kai JanKrainer and I. (See here the programme of the conference).
Consensus on the need to get rid of the current flaws in ISDS
The event certainly contributed to taking stock of some important elements for the future debate on ISDS. The key one on which – surprisingly – almost all speakers seemed to agree is the existence of flaws in current ISDS regimes: transparency deficit, looseness of provisions and definitions, openness to abuses are unanimously – though to different degrees – recognised as problems in need of addressing.
However, on the implications of and solutions for such problems is where we diverged. Ambassador Gardner, the European Commission, BusinessEurope and a selection of business representatives among the audience believed satisfactory improvements have been undertaken in the CETA text. In contrast, academics from the London School of Economics and Osgoode Hall Law School, as well as trade unions and civil society representatives in the panels and among the audience highlighted persisting deficiencies. These included the conduct of arbitrators, exceptions to transparency rules and the key definitions such as ‘fair and equitable treatment’ and what constitutes an investor.
Among the apparently fundamental and unfixable flaws of the system, several contributors underlined unacceptable discrimination – not only of domestic investors, but also citizens who do not have access to any similar fast-track parallel judicial systems. The case of the 1984 Bhopal tragedy was mentioned during a panel discussion, wherein many had to wait decades without compensation for manifest and serious regulatory violations by companies or governments.
It was acknowledged that judicial systems are imperfect, but resources should be focused on improving them, rather than engaging in private arbitration.
Alternatives to ISDS foreseeable and well-identified
A wide spectrum of opinions also exist on the desirability and need for ISDS mechanisms in order to protect investments. On one side academics have insisted on the lack of systematic evidence of investors’ rights violations in the US and brought figures demonstrating investment flows are unaffected nor encouraged by the existence of ISDS mechanisms. South African Ambassador Xavier Karim highlighted this by way of the South African system which has witnessed an increase of Foreign Direct Investment flows despite the decision to terminate several Bilateral Investment Treaties containing ISDS. Conversely, the US Chamber of Commerce and other contributors maintained that ISDS is one, not decisive factor taken into account in investment planning. It is seen as addressing problems in the jurisdiction of national courts over international investment provisions and in their implementation.
Interesting feasible alternatives were proposed by Professor Gus Van Harten, who focused his presentation on the use of contractually-agreed legal fora and analysed conflicts of ISDS rulings with national constitutions.
While we await publication of the results of the ISDS and investment protection public consultation, BEUC reiterated the criticisms expressed in its submission and endorses LSE professor Jan Kleinheisterkamp’s definition of CETA improvements as “patches” on a system Public Citizen President Robert Weissman defined as “too flawed to be fixed”.
There must be political will to keep the rule of law, reinstate primacy of regulatory safeguards and constitutional principles. These must be the guiding principles when interpreting substantive rights given to investors in 21st century investment policy. This approach will be an investment towards the endorsement of the new generation of trade agreements by EU citizens.