Modalities for investment protection and Investor-State Dispute Settlement (ISDS) in TTIP from a trade union perspective

FES | 1 July 2014

Modalities for investment protection and Investor-State Dispute Settlement (ISDS) in TTIP from a trade union perspective

Markus Krajewski
Friedrich-Alexander-Universität Erlangen-Nürnberg

Introduction and Background

The impact of international treaties protecting foreign investment on a state’s ability to regulate and intervene in the economy from a public interest perspective has been the subject of academic debates since the late 1990s. [1] However, it was the debate surrounding an investment protection chapter in the planned Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States which moved this issue to the centre of a heated public debate.

In the light of the increased critique of investment protection in the TTIP, especially provisions establishing a system of Investor-state dispute settlement (ISDS), the European Commission decided in January 2014 to launch a public consultation on investment protection in the TTIP. [2] Between 27 March and 13 July 2014, members of the public were invited to reply to a set of thirteen questions addressing specific elements of the investment chapter in TTIP. These questions were illustrated and explained using examples of text taken from the recently negotiated Comprehensive Economic and Trade Agreement (CETA) between the EU and Canada. [3] The consultation generated almost 150,000 online contributions. The largest number of replies came from the United Kingdom, Austria and Germany. Most contributions were submitted by individuals and in many cases were submitted collectively through coordinated actions. 569 organisations, including many NGOs, also responded. [4] The responses to the consultation have not yet been published as the European Commission is still reviewing and analysing the results. According to the Commission, the responses will be analysed during the coming months and a report on the results will be published towards the end of 2014. [5]

Irrespective of the conclusion drawn by the Commission on the basis of the consultation, the debate about the impact of investment protection in the TTIP on regulatory autonomy is set to continue. The present study will therefore address the issues raised during the consultation in a broader context and discuss in particular the impact of investment protection on social and labour regulation and the autonomy of the social partners in regulating these matters through collective agreements.

The study begins with a general assessment of the system of investment protection and ISDS in international agreements (II.). This is necessary even though the EU consultation document did not specifically invite answers to the general question as to whether such a system was desirable. However, any attempt at a thorough analysis of the pertinent issues would be incomplete without discussing this general question first. The study will go on to address specifically the necessity of investment protection in a EU-US agreement (III.). The study then moves on to cover specific aspects of the system of investment protection and shall offer up a discussion on the problems and possible solutions to particular elements of investment protection.
­
These parts of the study follow the structure of the consultation document which in turn follows the general structure of a bilateral investment treaty (BIT) or an investment protection chapter in a free trade agreement such as NAFTA or the proposed TTIP. Consequently, the study addresses a number of substantial elements (IV.) as well as aspects of ISDS (V.). Part VI of the study discusses elements that are missing from the EU approach. The study concludes with a summary of its main findings and recommendations (VII.).

PDF - 771.3 kb
ISDS union perspective

Footnotes:

[1Titi, The right to regulate in international investment law, 2014.

[2European Commission, Commission to consult European public on provisions in EU-US trade deal on investment and investor-state dispute settlement, 21 January 2014, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1015.

[3Online public consultation on investment protection and investor-to-state dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP), http://trade.ec.europa.eu/consultations/index.cfm?consul_id=179.

[4European Commission, Preliminary report (statistical overview), Online public consultation on investment protection and investor-to-state dispute settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP), 18 July 2014, http://trade.ec.europa.eu/doclib/docs/2014/july/tradoc_152693.pdf.

[5Investment protection and ISDS in TTIP – EU starts reviewing survey results, 14 July 2014, http://trade.ec.europa.eu/doclib/press/index.cf-m?id=1127.

source: FES