Ecologic Staff Participates in EU Consultation on Investment Protection in TTIP
Christiane Gerstetter and Max Grünig, Senior Fellows at the Ecologic Institute, have prepared a submission for the EU Commission's online consultation on investment protection in the Transatlantic Trade and Investment Partnership (TTIP). The submission is available for download.
In their response to the Commission's consultation document, Christiane Gerstetter and Max Grünig express their view that neither substantive investment protection rules nor rules on investor-state dispute settlement (ISDS) are needed in TTIP. Both the EU and the US are rule of law systems where national courts provide sufficient protection for foreign investors. They also do not think that TTIP should be used, as is sometimes suggested, to establish "gold standards" on investment protection and ISDS that could be replicated in other agreements. They maintain that where there is a multilateral problem, the solution should also be multilateral.
By contrast, they see risks related in particular to ISDS provisions: Some of the case law on existing international investment treaties has interpreted e.g. fair and equitable treatment provisions or clauses prohibiting indirect expropriation quite broadly. This may lead to situation where a state has to compensate the investor for certain regulatory measures, adopted e.g. for the protection of the environment. They argue that while it is difficult methodologically to prove that the mere threat of ISDS proceedings would lead states to not adopt regulatory measures or to resort to less stringent regulation, there is certainly anecdotic evidence for such "regulatory chill".
The authors of the submission are also critical of the focus that the Commission has chosen for the consultation. They argue that a more general debate on the benefits and threats related to investment protection provisions in TTIP should have been a more central part of the consultation. Nonetheless, Christiane Gerstetter and Max Grünig respond to some of the detailed technicals questions of the Commission on how investment rules and rules on investor-state dispute settlement could be improved; they share the view expressed in the consultation document that ISDS as it currently mostly works suffers from some serious flaws.
The submission is partially based on the study conducted by the Ecologic Institute on "Investor-state dispute settlement under TTIP - a risk for environmental regulation?"