Transcript TTIP, CETA and ISDS

TTIP, CETA and ISDS
Introduction by Christoph Lechner
Member of the EESC, Group 2
E.o. meeting of Employees Group
4/12/2014, Bxl
Overview:
•
„Transatlantic trade relations and the EESC's views on an enhanced
cooperation and eventual EU-US FTA”,
EESC opinion, 4/6/2014, REX/390,
rapporteurs Jacek Krawczyk, Sandy Boyle
• „Investor protection and investor to state dispute settlement in EU trade
and investment agreements with third countries”,
EESC opinion in process, REX/411,
rapporteur Sandy Boyle
• Legal opinions on ISDS in CETA (TTIP),
Prof. Fischer-Lescano and Prof. Krajewski
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EESC opinion on „TTIP“
1.1 Committee believes that a successful TTIP could be a significant factor in
creating real growth and optimism.
1.5 Benefits of TTIP must be spread evenly throughout the business
community, workers, consumers and citizens.
1.18 Strong and robust Sustainable Development Chapter must be an
essential component in the agreement.
Essential components:
 Parties must reaffirm their obligations arising from membership of the
ILO
 The 8 core ILO Conventions must set the minimum basis
 Common commitment to enforce legislation and initiatives in the area of
environment
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EESC opinion on „TTIP“
1.24 Ability of EU Member States, regional and local authorities, to pursue
their own democratically agreed social and environmental policies.
1.22 Specificity of the public services must be preserved in accordance with
the obligations of the TFEU.
1.25 Promotion and protection of consumer interests is paramount to
achieve a broad based public support.
1.26 Existing EU agricultural and agri-food criteria must be taken into
account, as well as respect for the precautionary principle enshrined in
the Lisbon Treaty.
14. No diminution of standards of protection in regulatory field and
guarantee of the same level of data protection.
1.29 Strong joint civil society monitoring mechanism
1.31 Trans-Atlantic Labour and Environmental Dialogues must be activated.
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EESC opinion on „ISDS“ in process
Definition of ISDS:
3.1.3 Investment treaties enable companies to sue states at international
tribunals. This remedy is only available to foreign corporations or to
transnational corporations using a cross-border subsidiary.
Affected communities, citizens, domestic entrepreneurs and
governments cannot make use of the same mechanism.
Arbitration tribunal:
3.1.4 Arbitrators are not tenured judges with public authority as in domestic
judicial systems. The extrajudicial tribunals are comprised of three
private attorneys who sit in closed session, are appointed on an ad hoc
basis, and are unaccountable to any electorate. Their decision is final
and not subject to any appeal process.
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EESC opinion on „ISDS“ in process
3.3.1 Treaty based arbitrations reach 568 by the end of 2013 and actions
cover in sum 200 billion $
3.5.1 Average cost of an arbitration case is 8 Mio $.
5.9.4 Foreign direct investments are over 1.5 trillion € between the EU and
the US without an ISDS mechanism.
3.2.6 No EU OECD member state has signed a ISDS with the US.
Czech Republic, Estonia, Poland and Slovakia do have BITs with the US
before they joined the EU.
5.1 Business communities in US and EU strongly support ISDS.
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EESC opinion on „ISDS“ in process
5.2 On both sides of the Atlantic, strong opposition by
• consumer organisations (including BUEC and the Transatlantic Consumer
Dialogue),
• trade unions (including ETUC, AFLCIO and ITUC),
• environmental organisations and
• numerous NGOs.
5.1 EC's Public Consultation on ISDS received 150.000 submissions, the vast
majority of which are opposed to ISDS.
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EESC opinion on „ISDS“ in process
5.3 ISDS elevates transnational capital to a legal status equivalent to that of
the sovereign state and mushrooms into an undemocratic mechanism:
• fundamentally shifts the balance of power between investors, states and
other affected parties;
• prioritises corporate rights over the right of governments to regulate and
the sovereign right of nations to determine their own affairs;
• discriminatory mechanism favours foreign investors above their domestic
counterparts.
5.8.1 ISDS bypasses national legal systems demanding taxpayer
compensation for public interest policies e.g. in health and
environmental protection.
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EESC opinion on „ISDS“ in process
5.8.2 High profile cases:
• tobacco giant Philip Morris is suing Uruguay and Australia over health
warnings on cigarette packets due to its investment in trademarks and
other intellectual property;
• Swedish company Vattenfall sues for 4.7 billion € from Germany due to
decision to phase out nuclear energy;
• Lone Pine is suing Canada for 250 million Can$ after imposing a
moratorium on fracking
• French company Veolia is suing the Egyptian government after increasing
the minimum wage;
• US Occidental Oil Company gets from Ecuador 1,77 billion € for
termination of an oil concession despite possibility in contract.
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EESC opinion on „ISDS“ in process
5.9.1 Investors have mature and robust legal systems in the EU and USA ,
also in Canada and Japan.
5.10.5 President Juncker wrote in his political guidelines for the next EC:
"As Commission President I will also be very clear that I will not sacrifice
Europe’s safety, health, social and data protection standards or our
cultural diversity on the altar of free trade. Notably, the safety of the
food we eat and the protection of Europeans’ personal data will be non
negotiable for me as Commission President. Nor will I accept that the
jurisdiction of courts in EU Member States is limited by special regimes
of investor disputes. The rule of law and the principle of equality before
the law must also apply in this context."
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Legal opinions on ISDS in CETA (TTIP) by
Prof. Fischer-Lescano or Prof. Krajewski
• Legal opinion „European- and constitutional legal guidelines for the
Comprehensive Economic and Trade Agreement of the EU and Canada
(CETA) by Prof. Dr. Andreas Fischer-Lescano, Bremen, October 2014
• „Modalities for investment protection and Investor-State Dispute
Settlement (ISDS) in TTIP from a trade union perspective“ by Prof. Dr.
Markus Krajewski, Friedrich-Alexander-Universität Erlangen-Nürnberg,
FES October 2014
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Legal opinions on ISDS in CETA (TTIP) by
Prof. Fischer-Lescano or Prof. Krajewski
Significant problems with EU-Treaty law and constitutional laws in the MS:
• Jurisdictional monopoly of the European Court of Justice and the
ordinary jurisdictions in the Member States are questioned
• Possibility of mandatory examination by the ECJ and the High Courts in
the MS in the ordinary jurisdiction are missing.
• EU trade policy is bound to the principles in Art. 3 TEU, EU Charter of
Fundamental Rights and other EU legal norms.
Hand over jurisprudence to private arbitration, which would not be
bound to EU law and may therefore pass EU unlawful sentences, would
be a significant excess of authority (ultra vires).
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Legal opinions on ISDS in CETA (TTIP) by
Prof. Fischer-Lescano or Prof. Krajewski
• ISDS bypasses the jurisdiction of the ordinary courts in the MS through
investment actions by private arbitration.
That can contravene against the subsidiarity principle, because MS are
already able to decide investor lawsuits legally compliant.
• Proposed improvements in the CETA draft over the previous ISDSs in BITs
have not eliminated these concerns in core.
• ISDS obviously is introduced in a mixed agreement, therefore the
approval of all 28 parliaments of the Member States is required.
• Ultimately European Parliament has to decide to reject a free trade
agreement with ISDS as a whole or not.
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Legal opinions on ISDS in CETA (TTIP) by
Prof. Fischer-Lescano or Prof. Krajewski
• Due to these problems with EU legal conformity, the EU Commission, the
European Parliament and the MS have the option to apply to the ECJ for a
legal opinion.
• Subsidiarity action could be requested by the MS or their parliaments
before the ECJ.
• Affected communities or affected EU citizens or legal persons as domestic
firms because of discrimination of residents can bring an Action for
annulment under Art. 263 TFEU to the ECJ .
• It is absolutely necessary before decision making and before the
(provisional) entry into force, to perform a formal request for a legal
opinion to the ECJ on the examination of the EU legal conformity.
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Thank you very much for your interest!
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