Monday 22nd February, 2016 – Ahead of the 12th round of TTIP negotiations, 280 civil society organisations from across Europe, with the support of US and Canadian groups, have called on the European Commission and the United States Trade Representative to eliminate the Investor State Dispute Mechanism (ISDS) and its so-called replacement, the Investor Court System (ICS), from the TTIP, CETA and all other trade agreements. The issue comes back to the negotiating table after a two-year impasse.

The EU has ignored public opinion. The changes made to ISDS are mostly cosmetic. Under the re-branded ICS, dangerous investor privileges will still empower foreign investors to launch attacks on laws and regulations designed to protect health, the environment or society”, said Peter Fuchs of PowerShift Germany.

The signatories of this statement condemn the European Commission’s ‘re-branding’ of the old ISDS system. The right to regulate, for example, still leaves massive potential to penalise national governments for legislation intended to protect public health, the environment and society. “It is a disgrace that in the wake of the Climate Change Summit of 2015, the EC and USTR are endorsing a mechanism that would allow companies such as Keystone XL to sue governments for measures designed to prevent global warming as is happening in the US right now” argues Cecilia Olivet of the Transnational Institute.

The key concerns that led 145.000 respondents to say no to ISDS in TTIP during the European Commission consultation remain intact under ICS:

  •  both ISDS and ICS give exclusive rights to foreign investors, thereby discriminating against domestic investors and communities, without any evidence of benefits to the wider society.
  • both ISDS and ICS can force governments to use billions in taxpayers funds to compensate corporations for public health, environmental, labour and other public interest policies, government actions and even court rulings. They do not ensure that private interests cannot undermine public policy objectives
  • neither ISDS or ICS are subject to democratic principles and scrutiny. Parliaments will not be able to change the rules later on;
  • both ISDS and ICS undermine the jurisdiction of European and Member State courts as foreign investors can by-pass them;
  • both ISDS and ICS ignore the fact that European, U.S. and Canadian legal systems are perfectly capable of handling disputes with foreign investors, based on the law that applies to everyone else in society.

Crucially, the new proposal is worse than the current practice of the member states’ stand-alone investment treaties from which it is possible to withdraw: both the EU and Member States (MS) would be locked into the TTIP and CETA unless they decide to leave the European Union.

If signed, ISDS in TTIP would newly empower over 47.000 companies (compared to around 4,500 today) to launch ISDS attacks on European policies and government actions. ‘Despite losing in Australia there is no doubt that Phillip Morris will continue its battle to prevent the loss of its markets of death using any means possible’ quoted Emma Woodford, Founding Director of the Health and Trade Network, ‘excluding ISDS/ICS from all trade agreements is the only way to fully support national governments in the work they are democratically elected to do.’

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Read and download the full statement