Transatlantic Trade and Investment Partnership (TTIP).
EU consultation on the Investor-to-State Dispute Settlement Mechanism
Tips on making an effective response.  NOTE: this consultation closes on 06/07/2014 

Tell the European Commission:  No to TTIP
Article from Corporate Europe Conservatory: exposing the power of corporate lobbying in the EU

“When I wake up at night and think about arbitration, it never ceases to amaze me that sovereign states have agreed to investment arbitration at all […] Three private individuals are entrusted with the power to review, without any restriction or appeal procedure, all actions of the government, all decisions of the courts, and all laws and regulations emanating from parliament.”
Juan Fernández-Armesto, arbitrator from Spain

Thanks to public pressure across the European Union, the European Commission has launched a public consultation on one of the most worrying aspects of the Transatlantic Trade and Investment Partnership agreement (TTIP).  Although we think this consultation is a piece of theatre rather than a genuine attempt at accountability, it does give us the opportunity to make our voices heard.

Background
The consultation focuses on the so-called Investor State Dispute Settlement (ISDS) – that’s the legal system which allows corporations to sue governments for making decision which they perceive to be detrimental to their profits. It’s a special legal system which exists just for foreign corporations.

These ‘corporate tribunals’ already exist in many other investment treaties and allow multinational companies to sue countries across the world for doing no more than protecting their people and environment.

Just to give a few examples:

• Tobacco giant Philip Morris is claiming billions of dollars because Uruguay and Australia want to warn the public about the negative effects of smoking on cigarette packets 
• Mining company Lone Pine are claiming $250 million because Quebec placed a moratorium on fracking
• Swedish energy corporation Vettenfall is claiming $3.7 billion because the German government phased out nuclear power after the Fukishima disaster
• Ecuador has been forced to pay more than $1.7 billion to oil company Occidental even though that company broke the law
• Slovakia has to pay $22m after it reversed the privatisation of its health insurance system

The EU Commission’s proposals are aimed at salvaging ISDS which has faced increasing criticism in recent years from both citizens of the EU and also from those governments who have been adversely affected by their operation. In particular, governments of Ecuador, South Africa, Indonesia, Australia, Bolivia, India, Colombia and Venezuela have all either taken action against, or expressed disquiet about, the operation of ISDS. Some states are now cancelling their trade agreements with the EU precisely because of these mechanisms.  ISDS should stop being used across the world – that means in all new investment treaties which the EU signs.

For 10 excellent reasons to oppose TTIP – take a look at: 
http://corporateeurope.org/international-trade/2014/04/still-not-loving-isds-10-reasons-oppose-investors-super-rights-eu-trade



 

Take action
We don’t believe these corporate tribunals serve any purpose except to enhance the power of big business.

Unfortunately the EU’s consultation doesn’t ask whether we want these corporate tribunals to be included in TTIP - or whether we want TTIP at all. But we’re going to tell them anyway.

The consultation is very technical, but there’s no need to answer every question. However, the Commission has hinted that it might not accept duplicate responses. Therefore, we’re providing guidance as to how you might answer the consultation. It shouldn’t take more than 5 minutes.

How to respond to the consultation:
Go here: http://trade.ec.europa.eu/consultations/index.cfm?consul_id=179

In general, the questions laid out by the Commission are written to sound reasonable “we want to limit the usage of corporate tribunals to prohibit the most egregious cases”. The Commission hopes   that respondents will end up saying “that sounds like a reasonable way forward”. But we disagree, because we don’t believe these measures will prohibit undemocratic cases being brought. Moreover, we object to the whole notion of ISDS which privileges the interests of very large foreign ‘investors’ over the rights of everyone else.

We suggest you don’t answer all the questions, but state your opposition to ISDS in any form in either question 1 or question 13.

 Points you might want to make:
ISDS mechanisms:

• violate the principle of “equality before the law”. It privileges ‘foreign’ investors over local entrepreneurs, citizens, and communities who do not have access (even if they had the money) to these  parallel legal structures.
• are one-sided. Only companies can sue governments. It does nothing to enable people to hold corporations to account - and they take place in secret,
• are not judicially independent, but have a built-in, pro-investor bias because disputes are usually decided by a tribunal of three  unaccountable private sector lawyers appointed as arbitrators. These arbitrators do not have a flat salary, but are paid per case. This creates a strong incentive to side with the claimants because investor-friendly rulings pave the way for more cases and more income in the future.
• do not include any right to appeal or review. Decisions are final and binding – even if they are legally wrong or could have serious financial repercussion on a government, whose first duty should be to its citizens, not investors.
• provide a second ‘bite at the cherry’ for transnationals who lose a case in domestic courts. They can then bring a case against the state under ISDS

You might also want to point out, in your own words that:

• Philip Morris is currently using ISDS to sue both Australia and Uruguay over taking public health action to prevent smoking. These cases are widely seen as egregious by civil society groups. But according to campaigners at Corporate Europe Observatory, the Commission’s suggested ‘model ISDS’ system would in no way prevent such a case being filed against the EU or member governments if they attempted to introduced new anti-smoking legislation.
• ISDS claims are growing as more and more investors become adept at using these mechanisms, and more law firms specialise in advising on their operations. Including ISDS in TTIP seems certain to accelerate that trend. TTIP would cover more than half of all foreign direct investment in the EU. 75,000 transnational  companies with subsidiaries in both the EU and the US could make use of ISDS mechanisms in TTIP. EU and US businesses already account for 75% of all investor-state disputes known globally.
• ISDS mechanisms do not even help their intended objective of facilitating more investment. In the case of including an ISDS in TTIP, a study commission by the British government by the London School of Economics concluded that “Existing evidence suggests that the presence of an EU-US investment chapter is highly unlikely to encourage investment above what would otherwise take place.” Brazil has never signed an investment treaty and yet has still attracted vast amounts of foreign investment.

If you do send an action to the Commission’s consultation, please let us know at
http://corporateeurope.org/international-trade/2014/04/still-not-loving-isds-10-reasons-oppose-investors-super-rights-eu-trade