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investor-state disputes | ISDS

Investor-state dispute settlement (ISDS) refers to a way of handling conflicts under international investment agreements whereby companies from one party are allowed to sue the government of another party. This means they can file a complaint and seek compensation for damages. Many BITs and investment chapters of FTAs allow for this if the investor’s expectation of a profit has been negatively affected by some action that the host government took, such as changing a policy. The dispute is normally handled not in a public court but through a private abritration panel. The usual venues where these proceedings take place are the International Centre for Settlement of Investment Disputes (World Bank), the International Chamber of Commerce, the United Nations Commission on International Trade Law or the International Court of Justice.

ISDS is a hot topic right now because it is being challenged very strongly by concerned citizens in the context of the EU-US TTIP negotiations, the TransPacific Partnership talks and the CETA deal between Canada and the EU.

Seven things you should know about EU-Singapore ISDS
7-Dec-2014 FFII
Lock-in, no institutional safeguards for independence, perverse incentives, no separation of powers, automatic consent, ripe for exploitation, sovereign debt instruments included, open to the world, and a strategic mistake. Former trade commissioner De Gucht left us a Gordian Knot, writes Ante Wessels.
CETA: The French Parliament votes against the ISDS
4-Dec-2014 AITEC
At the end of November, both chambers of parliament rejected integrating the investor-state dispute resolution mechanism into CETA.
Revealed: How taxpayers are footing bill for Europe’s trade deals
4-Dec-2014 FOEE
New research today reveals that European governments have already paid at least €3.5 billion to private investors due to a clause in international trade deals.
Congressional Financial Services Committee leaders: Exclude ISDS from US-EU deal
4-Dec-2014 Public Citizen
US congressional leaders have just sent a letter to the Obama administration warning against TAFTA/TTIP provisions that could restrict Congress’ ability to prevent another financial crisis.
The increasing appeal and novel use of bilateral investment treaties
3-Dec-2014 Skadden
State measures that reduce or nullify existing creditor rights, such as the Argentine “Lock Law” or similar moratoria on repayment, may violate BIT rights and supply investors and creditors in other jurisdictions, particularly in the eurozone, with a basis for challenging similar measures.
Investor-state dispute settlement in Europe
3-Dec-2014 IR Blog
If it is left in TTIP, a great deal more of global FDI flows will suddenly be covered by ISDS.
CETA’s fate may hinge on outcome of EU-Singapore trade ratification
2-Dec-2014 Globe and Mail
The fate of Canada’s landmark trade agreement with the European Union, known as CETA, may hinge on an obscure case due to come before the European Court of Justice that relates to a similar deal the EU recently struck with Singapore.
Sigmar Gabriel: ‘Germany will approve CETA’
28-Nov-2014 EurActiv
German Minister of Economic Affairs Sigmar Gabriel is clashing with his own party over the EU’s planned free trade agreement with Canada (CETA), calling on Bundestag members to approve the deal despite the controversial investor protection provision.
Online protest delays EU plan to resolve US trade row
26-Nov-2014 Reuters
EU officials say the Commission is divided over how to draw conclusions from the public consultation it held on investor-state disputes under the proposed EU-US trade accord, which is now delaying negotiations.
Korea, US evaluate current state of FTA
26-Nov-2014 Business Korea
The two sides discussed the adoption of appeal instead of a single trial in the Investor-State Dispute Settlement (ISDS) but failed to reach an agreement.
Protecting profits over people
25-Nov-2014 Myanmar Times
Burma is in the process of formulating an investment law which would give investors full compensation if government regulations impact their profits
What “free trade” has done to Central America
25-Nov-2014 FPIF
Ten years after the approval of DR-CAFTA, we are seeing many of the effects that citizens who opposed the deal cautioned about., write Manuel Perez-Rocha and Julia Paley.
Europe-US free trade agreement faces risks
23-Nov-2014 Gulf Daily News
Europe’s proposed free trade agreement with the US would collapse if European leaders bowed to pressure to remove investment protection from any deal, the chairman of EU trade ministers said.
Investor-state dispute settlement and the China-Australia Free Trade Agreement
21-Nov-2014 Allens
The Investment Chapter of the ChAFTA may be similar to the KAFTA’s with broad carve outs limiting the scope of claims that a foreign investor may bring against the host country and providing the parties with a discretion to regulate on ’public welfare’ objectives
Modalities for investment protection and Investor-State Dispute Settlement (ISDS) in TTIP from a trade union perspective
21-Nov-2014 FES
This study discusses the impact of investment protection on social and labour regulation and the autonomy of the social partners in regulating these matters through collective agreements.
Canada-EU deal could unleash "corporate litigation boom’’
19-Nov-2014 CUPE
A new report warns that controversial investor protection rules in the proposed Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union could expose Canada to a new wave of corporate lawsuits that restrict the powers of all levels of governments.
Chinese corporations allowed to sue Australian government under free trade agreement
18-Nov-2014 SMH
The deal struck between China and Australia on Monday will contain an Investor State Dispute Settlement mechanism that will allow Chinese corporations to challenge the Australian government for "pretty much anything", say academics
French government will not sign TTIP agreement in 2015
17-Nov-2014 EurActiv
Matthias Fekl, France’s Secretary of State for Foreign Trade, has made it clear that France will not support the inclusion of the Investor State Dispute Settlement mechanism (ISDS) in a potential TTIP agreement.
TPP deal not about trade, should be stopped
17-Nov-2014 Guam PDN
The Trans-Pacific Partnership threatens workers’ rights in the 12 nations negotiating the deal, say Communications Workers of America
Netherlands – Indonesia BIT rolls back implementation of new Indonesian mining law: The case of Newmont Mining vs Indonesia
13-Nov-2014 TNI
The case of Newmont Mining vs Indonesia is a powerful example of how investment agreements, particularly Bilateral Investment Treaties (BITs), are used by companies to get exemptions from government regulations and legislation, undermining democracy and development.