EU commission #ISDS proposal a threat to democracy and civil rights #TTIP
EU commission ISDS proposal a threat to democracy and civil rights
Ante Wessels
The European Commission has published its investor-to-state dispute settlement (ISDS) reform proposal for the EU-US trade agreement under negotiation (TTIP).
Introduction
The commission’s proposal institutionalises discrimination. It gives foreign investors – and only foreign investors
– the right to exit domestic legal systems and use supranational
adjudication to challenge government decisions. Supranational
adjudication places the development of law outside democratic oversight.
On the positive side, the proposal removes a relic: unfair procedural advantages for the United States. However, the proposal contains a loophole and fails to protect policy space.
The proposal would create perverse incentives. The adjudicators would
be paid per day worked, without prohibition on outside remuneration.
This creates perverse incentives to give foreign investors value for
money as only foreign investors can start cases. The proposal doesn’t
provide certainty that this will ever change.
Societies have to be able to change course, for instance to reform
copyright or to effectively protect privacy. The proposal would place
(for-profit) supranational investment adjudicators above democracies.
The adjudicators would assess whether democratic decisions are arbitrary
from a foreign investment protection point of view. This creates major
risks for democracies and civil rights.
Furthermore, the commission undermines any possible positive element
in its reform proposal as it intends to add old ISDS to the trade
agreements with Canada and Singapore, giving foreign investors the
possibility to route their investments into the EU through these
countries.
The right approach is to improve weak aspects of domestic legal
systems. This provides equal access to the law and doesn’t remove
democratic oversight of the development of law. Investors can take out
political risk insurance for additional certainty.
