Het EU-VS Vrijhandelsverdrag (TTIP) #3

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Op dinsdag 3 mei 2016 20:22 schreef Bram_van_Loon het volgende:

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Deze citeer ik eventjes simpelweg omdat het een goede reactie is. Niets aan toe te voegen.

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Key flaws in the European Commission’s proposals for foreign investor protection in TTIP

Gus Van Harten
York University - Osgoode Hall Law School
November 17, 2015
Osgoode Legal Studies Research Paper No. 16/2016

In November 2015, the European Commission released a proposed text on foreign investor protection in the EU-US Transatlantic Trade and Investment Partnership (TTIP).¹ The EC’s proposal has various flaws arising from concerns about the foreign investor protection system but also detailed aspects of the proposed text. The flaws cast doubt on the EC’s claims, in particular, that it has reformed investor-state dispute settlement (ISDS) and that it has safeguarded the right to regulate. They also return us to weaknesses in the EC’s proposals for foreign investor protection in agreements like the TTIP. In this paper, I outline six key flaws.

1. ISDS is alive in the EC’s proposals
From the start, the EC’s approach to foreign investor protection has been based on the widely and rightly criticized process of investor-state dispute settlement.² In its new TTIP proposal, the EC introduces a new acronym to describe ISDS: ICS, which stands for “investment court system”.³

Despite my initial enthusiasm about ICS when I read the EC’s press release on the topic, and although the details do have positive elements, after a study of the text it became clear that ICS is mainly a re-branding exercise for ISDS. Too many flawed elements of ISDS remain – including elements that give rise to unacceptable appearances of bias among ICS “judges” – to use terms like court and judge without being misleading to the uninitiated.

Most importantly, ICS “judges” would continue to have a financial interest in future claims because they are still paid a (lucrative) daily fee in a context where only one side – foreign investors – can bring claims,⁴ they would continue to operate under the usual ISDS arbitration rules,⁵ they would not have to meet the requirements for judicial appointment in any country ⁶ and they would not even be barred from working on the side as ISDS arbitrators.⁷ I am prompted to say that, if ISDS is “dead”, as some officials have claimed,⁸ then the EC’s ICS proposal reminds me of a zombie movie.

There is one very promising signal in the EC’s proposals – an apparent commitment to establish a proper international court to replace ISDS in existing treaties⁹ – yet this aspect of the proposal unfortunately is put in doubt by the EC’s choices about sequencing, as I discuss below.

2. The case still has not been made for foreign investor protection in the TTIP

The foreign investor protection system gives a special status and, in effect, a public subsidy to foreign investors faced the usual risks of democracy and regulation. In the case of the TTIP, the EC is proposing to expand this system to countries whose courts are reliable, accessible, independent, and indeed much superior to ISDS itself.

Various assertions have been made to justify the expansion of ISDS in this unorthodox context. Yet they are never, in my experience, accompanied by any real evidence to show that European or U.S. courts have systemic failings to justify giving such an extraordinary international remedy to foreign investors alone.

For example, the EC has said that ISDS is needed to protect small and medium enterprises (SMEs). However, the EC does not provide evidence of actual benefits of ISDS for SMEs nor does it address the extensive evidence of significant costs. As an illustration of the latter, SMEs have recovered only a tiny fraction of compensation ordered by ISDS tribunals in known cases and, for the vast majority of SMEs that have brought ISDS claims, the legal and arbitration costs of doing so appear to have exceeded any compensation received.¹⁰ Worse, domestic investors and citizens have no right whatsoever to protection in ISDS, while ISDS can be used to pressure governments to appease large multinationals and extremely wealthy foreigners. In short, ISDS skews decision-making and the marketplace in favour of bigger foreign players at the expense of smaller and domestic ones.

Any proposal to give special privileges or public subsidies to any economic actor – here, the largest and wealthiest in the world – calls for a strong justification based on clear evidence of the public benefit. The absence of such a justification and evidence has been a serious omission in the EC’s proposals for foreign investor protection from the very start.¹¹

3. The EC’s proposals are fundamentally imbalanced

The EC is proposing exceptionally powerful rights and privileges, without any actionable responsibilities, for foreign investors.¹² Again, the EC gives no serious justification for this discrimination in favour of foreign investors over domestic investors and citizens.

If the EC was committed to balance, it would ensure at least that ISDS could be used to hold foreign investors to account if they flaunt labour, environmental, consumer, or other standards in situations where domestic or European institutions do not offer an effective remedy.¹³ The EC’s proposal takes no steps at all toward such a balance.

The way forward on this issue is clear, I suggest. The EC should establish actionable responsibilities for foreign investors by allowing a host country or affected third party, such as a trade union or a local community, to bring a claim (or, more modestly, a counter-claim) against a foreign investor in the very same process that is used to enforce foreign investor protections.¹⁴ That is a basic test for evaluating balance in the EC’s proposals. At present, the EC’s proposals are the opposite of balanced.

4. The EC’s proposals put poison pills into the “right to regulate”¹⁵

The EC has proposed to put a right to regulate into the TTIP text.¹⁶ However, the EC has included poison pills in the relevant text that appear designed to kill the right to regulate in future ISDS cases. The key poison pills are as follows.

i. The wording of the right to regulate in Article 2(1) includes a “necessity test” for state decisions that are protected by the right to regulate. While this test might sound reasonable on its face, it has been applied in exceedingly strict ways by a large majority of ISDS tribunals faced with the issue.¹⁷ One who knows the record of ISDS tribunals therefore should also know that a necessity test is the surest way to make it very hard for a challenged law, regulation, or other decision to qualify for protection under the right to regulate.¹⁸

ii. The wording of the right to regulate in Article 2(1) – when interpreted in the context of the express prohibition any requirement for states “to compensate the investor” that is included in Article 2(4) but not in Article 2(1)¹⁹ – makes it clear that compensation orders by ISDS tribunals for new laws, regulations, or other decisions are not precluded or limited by the right to regulate in Article 2(1). This discrepancy creates a big gap in the EC’s proposal because compensation orders, and the potentially huge price tag they put on future state decisions ²⁰ are at the heart of the concerns about ISDS and the right to regulate.

iii. Similarly, in Article 2(2), the wording of the state’s right to “change the legal and regulatory framework”, read again in the context of Article 2(4), makes it clear that compensation orders for legal or regulatory changes are also not precluded or limited by the state’s right in Article 2(2).

iv. Although Article 2(2) appears to block awards of expected profits, the compensation orders mentioned in items ii. and iii. above would typically include reasonable-expected lost profits for foreign investors.²¹ As I explained above, Article 2(2) does not apply to compensation orders by ISDS tribunals. As a result, the language in Article 2(2) on expected profits would not apply to compensation orders. Rather, the arbitrators’ general power to award monetary compensation, which is used regularly to award lost profits, takes over. In the EC’s proposal, this general power is found in Article 28(1).²²

These textual details greatly undermine the EC’s proposal on the right to regulate and the right to change the legal and regulatory framework. Indeed, they suggest that the EC is pretending to protect the right to regulate, while leaving catches in the text that return us to the usual concerns about ISDS. The text on this point is a good case study for how legal language can be written in ways that may give a false impression of security to the uninitiated.

Under the EC’s proposal, foreign investors can still use ISDS – as they have in most ISDS cases so far – to attack state decisions in areas of agriculture, consumer protection, culture, energy, environment, financial security, intellectual property, land use, mining, public health, taxation, or transportation.²³ Likewise, ISDS tribunals can still order vast amounts of public compensation for foreign investors in any of these areas.²⁴ The EC’s proposal does not alter this situation.

5. The EC’s proposal remains disrespectful of domestic institutions, including domestic
and European courts

The EC’s proposal is still premised on an assumption that EU and US courts are so flawed that foreign investors should be able to bring an ISDS claim without having to demonstrate that it would be unreasonable for the foreign investor to seek relief first in the courts.

This assumption is inherent in the EC proposal not to include the standard duty of all individuals to go first to a country’s courts, where they offer justice, before pursuing an international remedy.²⁵ Foreign investors alone have been excused from this duty, thus exacerbating the imbalances created by ISDS.

Instead of including a standard duty to exhaust local remedies, the EC has introduced a complicated “U-turn” clause. This clause prevents foreign investors from turning back from ISDS, once they have resorted to ISDS. Yet it does nothing to require foreign investors to use the courts first or to explain why they are going to ISDS instead of to the courts. Foreign investors can choose to avoid the courts, they can turn back from the courts at any point to pursue ISDS instead, and they can use ISDS to seek compensation for a court’s decisions at any level.

This arrangement is an extraordinary gift for foreign investors, not available to anyone else who might need international protection. In turn, domestic investors and citizens in general are disadvantaged. They must deal with the usual risks of democracy and regulation in the usual ways: by taking part in the democratic process, by buying insurance, by bargaining for strong dispute settlement clauses in their contracts with government, or by relying – like everyone else – on the courts.

6. If the EC is serious about an international investment court, why is it proposing to
expand ISDS in the TTIP?

I worry that the EC is using the language of an international investment court to give cover for a huge expansion of ISDS.²⁶

As noted earlier, the EC’s ICS proposal falls well short of establishing a court with independent judges. And, while the EC has signalled that it will work toward an fullblown international court to replace ISDS, if this is the goal then the EC’s sequencing appears backwards. Logically, the EC should be pushing to transform existing treaties so that ISDS is replaced with an international court before the EC goes to the U.S. with its proposals. In past, the U.S. government has not welcomed the idea of new international courts. The fact that the EC has done the opposite – by floating a version of ISDS with the U.S. before pursuing a proper court with other countries –seems to undermine the EC’s credibility on the issue of an international investment court.

Conclusion
For six reasons, the EC’s proposal for foreign investor protection in TTIP are flawed:
1. ISDS lives on in the details of the EC’s proposal.
2. There is still no evidence-based justification for including extraordinary protections
for foreign investors in the TTIP and similar agreements.
3. The proposal does not include any responsibilities for foreign investors that can be
enforced in the same process as foreign investors’ elaborate rights and protections.
4. The EC has buried poison pills inside the details of the “right to regulate”.
5. The proposal remains disrespectful of domestic institutions, including domestic and
European courts.
6. The EC’s proposal for an international investment court lack credibility because the
EC has proceeded first with a proposal for ISDS in the TTIP.

There is a viable alternative to this state of affairs. The EC could decline to pursue new treaties based on ISDS. It could work to establish an international judicial process that replaces ISDS in existing treaties. It could ensure that the law of foreign investment is balanced by permitting foreign investor rights and responsibilities to be enforced in the same process. It could ensure that this area of law is respectful of domestic institutions based on longstanding principles of international legal protection for all individuals. The EC could do all of these things, and it should.

Bron: http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2692122

SPOILER: Voetnoten

Om spoilers te kunnen lezen moet je zijn ingelogd. Je moet je daarvoor eerst gratis Registreren. Ook kun je spoilers niet lezen als je een ban hebt.

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The prospect of TTIP, Wilson added, "creates an inevitability over time, that the Russians will have to play by U.S. and EU rules. Rather than be at the table shaping standards, they're going to have to react." Some U.S. officials are more blunt. "What we do know is that the Kremlin hates this deal. That's fact," Anthony Gardner, the U.S. ambassador to the EU, told POLITICO last year.

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Some supporters have taken to casting TTIP in security terms, and the European Commission is pushing the U.S. to include an energy chapter in TTIP as a means to secure access to U.S. natural gas and reduce European dependence on Russian energy.

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"Do you believe it is wise to spend so much political energy on a free trade zone with the USA while you have more natural partners at your side, closer to home?" Chizhov said at the time. "We don't even chlorinate our chickens."

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Still, the links between NATO and the idea of a transatlantic trade deal do have historic resonance. The second clause of NATO's charter treaty from 1949, for instance, notes that member states "eliminate conflict in their international economic policies and will encourage economic collaboration between any or all of them."

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Op dinsdag 10 mei 2016 00:48 schreef Bram_van_Loon het volgende:
http://www.washingtonsblo(...)ming-opposition.html

Dit deel is interessant:

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TTIP krijgt niet de media-aandacht die het verdient omdat die media er belang bij hebben dat de TTIP er komt. Steun vrijere en minder afhankelijke media op het internet, denk aan Huftington Post, Young Turks, GeenStijl etc.
Links, rechts, binnenlands, buitenlands, het doet er niet toe. Als ze maar minder afhankelijk en vrijer zijn

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Op maandag 9 mei 2016 19:44 schreef Sicstus het volgende:
Ik weet weinig van de details, maar als dit van de Amerikanen komt, en Europese aarslikkers van de Amerikanen staan ervan te juichen, dan is dat genoeg reden om er tegen te zijn.

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Op dinsdag 10 mei 2016 13:07 schreef 99.999 het volgende:

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Ik snap dat jij vanuit lolbetarisch perspectief dit slechts compleet eenzijdig kan benaderen vanuit je eigen verzonnen definities. Maar je snapt toch ook wel dat de wereld van de volwassen mensen niet zo werkt? Dan past je zwart-wit-wereldbeeld gewoon niet.

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Op dinsdag 10 mei 2016 13:07 schreef 99.999 het volgende:
Is dan al bekend wat de uitkomst van de onderhandelingen is?

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Op dinsdag 10 mei 2016 16:38 schreef 99.999 het volgende:

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Is het niet de inzet van de Amerikaanse delegatie? Daar tegenover staat een andere inzet van de Europese. Men is niet voor niets nog aan het onderhandelen...

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Op dinsdag 10 mei 2016 00:48 schreef Bram_van_Loon het volgende:
Steun vrijere en minder afhankelijke media op het internet, denk aan Huftington Post, Young Turks, GeenStijl etc.
Links, rechts, binnenlands, buitenlands, het doet er niet toe. Als ze maar minder afhankelijk en vrijer zijn

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Op woensdag 11 mei 2016 18:21 schreef CynicusRomanticusRob het volgende:

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Steunen? Hoe?
Door het te lezen? No problem! Al ben ik wel behoorlijk geenstijlmoe.
Maar doneren? No thank you.
Wat ik wel doe, is 'boycotten' van de gevestigde media.