Stop TTIP: Malmström’s ISDS proposal misses the point

No privileged rights for private investors!  

Cecilia Malmström, the EU Trade Commissioner, will today present the European Parliament with a reform proposal for the investor-state dispute settlement (ISDS) in TTIP.  According to the self-organised  European Citizens’ Initiative Stop TTIP this measure only covers-up problems but doesn’t solve them. “The reformed ISDS system still favors foreign investors and still allows for independent courts to be circumvented by using private arbitration instead,“ says Michael Efler, representative of the citizens’ committee of the European Citizens’ Initiative Stop TTIP.

The ISDS system remains one-sided; even with Malmström’s suggestions. ISDS grants foreign investors exclusive access to legal action against any national measure which limits their investments and profits. “Citizens, local or domestic companies have access to the standard legal procedures. In contrast foreign investors obtain rights without any obligations being imposed upon them – for example related to environmental protection or safety measures,“ says Efler. According to Stop TTIP, ISDS agreements with the United States or Canada are unnecessary. There already exists a high level of investment flows between these countries and all are equipped with well-developed and accessible legal systems. If the controversial ISDS tribunals are established, this will likely lead to a flood of legal actions since TTIP will dramatically increase the amount of US- and EU-Companies eligible to make use of this parallel justice system.

“The European Parliament must categorically reject ISDS when it votes on the TTIP resolution in early June,“ says Efler. „ISDS is and will remain a threat to the rule of law and democracy – no cosmetic surgery can change this.”  What is also problematic is that several of the changes proposed for TTIP will not apply to CETA. The agreement with Canada has already been negotiated and currently doesn’t directly forsee an appeal mechanism. Lawsuits that have been brought in parallel at state courts and ISDS-tribunals will be limited but not prevented. „So far, talk has been about reforming investor lawsuits, but when it comes to CETA silence kicks in. However, a renegotiation of this agreement is absolutely necessary if we want to eliminate the dangers of a private parallel justice,“ says Efler.

Malmström today (May 6) presents the European Parliament with various reform proposals for ISDS in TTIP:  Investors are to be able to decide if they want to use public courts or private arbitration. Appeal procedures are to be made possible and a roster of arbitrators is to be created. By establishing the “right to regulate“ the adoption of new laws on e.g. environmental, health or consumer protection is to be ensured; without fear of  lawsuits by foreign corporations.

The only safe solution is not to ratify CETA and TTIP, concludes the Stop TTIP alliance. „We are hoping that the European Parliament is aware of its responsibility and will not simply wave through TTIP,“ says Efler. The self-organized European Citizens’ Initiative Stop TTIP consists of 460 supporting organisations which to date collected over 1.7 million signatures and now want to reach the two-million mark.


Detailed opinion of the Stop TTIP partner “S2B”:

Self-organized European Citizens’ Initiative: