Green NGO rejects new investment court proposal in TTIP

Friends of the Earth Malta have criticised a European Commission proposal to set up an investment court system as part of the ongoing negotiations on the a free trade agreement within the EU and the United States.

FOTE project officer Elena Portelli warned that this proposal in the Transatlantic Trade and Investment Partnership will grant extraordinary rights to corporations, without obliging them to protect citizens and the environment.

The TTIP had originally and controversially proposed to set up an investor-to-state dispute settlement (ISDS) mechanism that would allow multinational corporations to settle disputes with governments through international arbitration rather than through national courts. Critics warned that this would allow multinational corporations to sue countries if government policies harm their profits, therefore conditioning governments into designing policies in a manner that will appease big business.

On Wednesday, the EC proposed an Investment Court System to replace the ISDS, that Trade Commissioner Cecilia Malmstrom hailed as “modernized and transparent”. If accepted, the court will be composed of a first instance Tribunal and an Appeal Tribunal, with judgements passed by publicly appointed judges with high qualifications comparable to those required for judges at the International Court of Justice.

Investors will only be able to sue governments on cases such as targeted discriminations, expropriation without compensation, and denial of justice.

The EC insisted that governments’ right to regulate would be enshrined in the provisions of the trade and investment agreement.

However, Portelli claimed that this proposal is simply “ISDS under a new name”.

“Despite reforms on the functioning of the system, it reaffirms the granting of extraordinary rights for corporate investors without giving them any obligations that would protect citizens and the environment,” she said in a statement.  

“The clause would extend the reach of arbitration cases from the current 10% to 100% of trade between the EU and the US. We would expect to see a steep rise in the amount of these cases, costing taxpayers millions in compensation costs.”