ECJ backing of ‘investment courts’ places multinationals above citizens
The European Court of Justice (ECJ) has concluded that including a so-called Investment Court System in the EU-Canada free-trade agreement is “compatible with EU law” – a ruling that ignores the gross injustices corporate tribunals inflict on EU citizens and the environment.
In an opinion released earlier this week, the European Court of Justice ruled that the controversial Investment Court System (ICS) introduced in the Comprehensive Economic and Trade Agreement (CETA) between the European Union and Canada was “in principle, compatible with EU law”, noting that “since those tribunals stand outside the EU judicial system, they cannot have the power to interpret or apply provisions of EU law other than those of the CETA”.
Although the ICS may comply with the letter of EU law, the European Environmental Bureau (EEB) strongly disagrees with the ECJ ruling, as it conflicts fundamentally with the spirit of EU law.
The EEB is Europe’s largest network of environmental organisations, with around 150 members in over 30 countries.
“What is lawful is not necessarily fair or just,” stresses Attracta Ui Bhroin, the EEB’s vice-president. “The ICS undermines the principle of equality before the law and grants foreign corporations a privileged status. It runs the risk of placing multinational corporations beyond the law in practical effect. This is bound to be harmful to EU citizens and the environment and makes defending EU law rights excessively difficult in practice”
While the new ICS contains some improvements compared with its predecessor, the Investor-State Dispute Settlement (ISDS) mechanism, it still acts outside domestic courts, affording special rights and privileges to large corporations. It allows corporations to extract up to billions from states when a new regulation is deemed to harm their expected profits. And it only operates in one direction, allowing corporates to sue states.
Putting citizens first
Resistance to ISDS and similar mechanisms, such as the ICS, has been mounting in recent years. Millions of citizens, large swathes of civil society and many policy-makers are opposed to separate arbitration mechanisms being built into trade deals.
More than half a million people have already signed a petition entitled ‘Stop ISDS. Rights for People, Rules for Corporations’. On Monday, activists handed the petition to First Vice-President of the European Commission, Frans Timmermans, who was quoted as saying, “You can count on me”. In addition to ending or adjusting all trade deals employing ISDS mechanisms, the petition demands that the EU and its member states support the negotiating of a legally binding UN treaty on transnational corporations and human rights.
Despite the Court of Justice’s ruling, the battle is far from over. Join the Stop ISDS. Rights for People, Rules for Corporations campaign, make your voice heard.
New campaign: “Rights for People, Rules for Corporations – Stop ISDS”
At the start of the 2019 World Economic Forum in Davos, The European Environmental Bureau and 150+ other European organisations, trade unions and social movements launch a new trade and corporate accountability campaign called “Rights for People and Rules for Corporations – Stop ISDS”.
In today’s international system, corporations benefit from far reaching super-rights and have access to special tribunals to enforce them. Investor State Dispute Settlement (ISDS) allows them to attack states outside of national courts whenever these states adopt legislation that could harm their profits. This mechanism threatens democratic decision making, the rule of law, human rights, the environment, health, public services, gender equality, as well as consumer and labour rights.
Meanwhile, there are still no binding international obligations to make transnational corporations (TNCs) accountable for their deeds and ensure respect of human, labour and environmental rights. Affected individuals and communities often face a denial of justice when TNCs violate their rights. This is an appalling asymmetry.
In Europe, the TTIP and CETA movements put the ISDS mechanism in the spotlight and exposed its illegitimacy. We want to end this unfair system once and for all, stop its expansion in any form, and terminate existing treaties containing ISDS.
New rules are also needed to keep corporations accountable and shift the balance of power to people and the planet. There is momentum to adopt such rules at the national, European and UN level. We call on states to support the UN Binding Treaty on Transnational Corporations and Human Rights currently under negotiations, and to enact European legislation defining the duties of transnational corporations throughout their supply chain, as well as ensuring access to justice for victims of corporate malpractice.