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MEP Childers moves to take out private investor courts from EU-US trade talks

TTIP reading room protest, Oct 2014

Press Release

Friday 5 Jun 2015

Nessa Childers, MEP for Dublin, tabled an amendment to remove private arbitration mechanisms from the EU-US trade agreement. The amendment was tabled with other parliamentarians who oppose Investor-State Dispute Settlement schemes.

Investor-state dispute settlement clauses in trade deals allow companies to seek compensation from countries if they deem that government actions, including legislation, have harmed their profits or expectations of profits under the terms of international trade agreements.

The amendment was proposed to change the official position of the European Parliament, which will be voted at next week’s plenary session, to remove private and confidential arbitration courts from the scope of the trade agreement.

Ms. Childers has vowed to reject the final text of the EU-US trade agreement, which requires Parliament’s consent to be ratified, if an Investor-State Dispute Settlement clause is included.

Further to moving the amendment to Parliament’s position, this week, Ms. Childers said:

“The Commission was forced to backtrack on the issue of investor-state dispute settlement (ISDS) mechanisms in the face of civil society’s opposition to these schemes, but the reviewed proposals brought to the table are sugar-coating a very unpalatable offer.

“Commissioner Malmström wants ISDS to survive in the text of the Transatlantic Trade and Investment Partnership so she is offering us a permanent appellate panel with a better choice of arbitrators and perhaps the requirement that companies take only one avenue – litigation or arbitration – instead of both.

“This may sound like an improvement but still doesn’t explain why we want a pricey, private, parallel legal forum that foreign companies alone can threaten governments with, holding them ransom to lengthy, expensive cases every time they legislate in the public interest.

“Big tobacco’s bigwig litigants in Ireland are a case in point. Do we really want to open up another legal front for these people to stall public health policy with?

“These obsolete schemes were created in the ‘60s as an insurance for investors to operate in what they saw as banana republics and have no place in the transatlantic jurisdictions. The vibrancy of our trade links is in itself proof that we don’t need them.
“So, big foreign investors want their own arbitration court just for themselves.

“Will Commissioner Malmstöm also propose a consumers court where these alone can sue companies? And maybe also a taxpayers court where taxpayers alone can sue them for ruinous public-private partnerships or firesale privatisations?”

ENDS

Note to Editor – see text of amendment below

Report A8-0175/2015
Bernd Lange
Negotiations for the Transatlantic Trade and Investment Partnership (TTIP)
2014/2228(INI)

Motion for a resolution
Paragraph 1 – point d – point xv
Motion for a resolution Amendment
(xv) to ensure the applicability of
international agreements, to bring an end
to the unequal treatment of European
investors in the US on account of existing
agreements of Member States; to ensure
that foreign investors are treated in a nondiscriminatory
fashion and have a fair
opportunity to seek and achieve redress of
grievances while benefiting from no
greater rights than domestic investors:
– to build on the concept paper
recently presented by Commissioner
Malmström to INTA Committee on May 7
and the ongoing discussions in the Trade
Ministers’ Council and to use them as a
basis for negotiations on a new and
effective system of investment protection,
as they provide very welcome proposals
for reform and improvement,
– taking into account the EU’s and
the US’ developed legal systems, to trust
the courts of the EU and of the Member
States and of the United States to provide
effective legal protection based on the
principle of democratic legitimacy,
efficiently and in a cost-effective manner,
– to propose a permanent solution
for resolving disputes between investors
and states which is subject to democratic
principles and scrutiny, where potential
cases are treated in a transparent manner
(xv) to ensure that foreign investors are
treated in a non-discriminatory fashion
and have a fair opportunity to seek and
achieve redress of grievances, while
benefiting from no greater rights than
domestic investors; to oppose the
inclusion of investor-state dispute
settlement (ISDS) in TTIP, as other
options to enforce investment protection
are available, such as domestic remedies;
by publicly appointed, independent
professional judges in public hearings
and which includes an appellate
mechanism, where consistency of judicial
decisions is ensured and the jurisdiction
of courts of the EU and of the Member
States is respected,
– in the medium term, a public
International Investment Court could be
the most appropriate means to address
investment disputes;
Amendment:

(xv) to ensure that foreign investors are
treated in a non-discriminatory fashion
and have a fair opportunity to seek and
achieve redress of grievances, while
benefiting from no greater rights than
domestic investors; to oppose the
inclusion of investor-state dispute
settlement (ISDS) in TTIP, as other
options to enforce investment protection
are available, such as domestic remedies;