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Winning the debate against pro-ISDS voices An activist’s argumentation guide

Index Glossary

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CHAPTER 1 Although the investor-State

Dispute Settlement (ISDS) has been discredited, policy makers continue to negotiate new investment protection treaties

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CHAPTER 3 Back to basics: the most

common pro-ISDS claims are not supported by evidence

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Claim 1 More rights for investors bring more investments.

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Claim 2 Investment deals only protect investors against extreme sovereign abuse and discrimination.

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Claim 3 Investor-State arbitration is independent and impartial.

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Claim 4 International investment arbitration is the only hope for justice and protection for investors, especially in countries with a weak judicial system.

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Claim 5 States win more cases than investors, therefore the system is not biased.

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Claim 6 Laws and regulations cannot be revoked by investment tribunals, therefore ISDS does not undermine the regulatory powers of governments.

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Claim 7 Investor-State dispute settlement contributes the rule of law. Claim 8 Investor-state dispute settlement is a useful tool for small and medium-sized companies (SMEs). Claim 9 Investment arbitration can help to protect the climate. Claim 10 Foreign investment promotes prosperity for all. Therefore, being against investment protection agreements is being against development.

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CHAPTER 4 The EU Investment Court

CHAPTER 2 Identifying the pro-ISDS

voices and the interests that lie behind them

Claim 11 If a government terminates investment protection agreements, investors will leave.

System (ICS) proposal unpacked: nothing more than smoke and mirrors

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Claim 12 The EU investment proposal is a big step in the right direction. It balances the interests of NGOs, businesses and Member States.

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Claim 13 Emblematic cases like Vattenfall v. Germany, PMI v. Uruguay, or Lone Pine v. Canada would not be possible under the current EU investment protection proposal.

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Claim 14 ICS narrows the interpretation of the Fair and Equitable Treatment (FET) clause.

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Claim 15 ICS protects the right to regulate.

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Claim 16 ICS sets up an independent court and secures the impartiality of arbitrators.

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CHAPTER 5 ISDS in TTIP is not needed

and no one has yet proven otherwise

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Claim 17 Including a ‘reformed’ and ‘modern’ investment protection system in TTIP is the ultimate chance to fix the problems of the past.

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Claim 18 Without investment protection provisions in TTIP, the rights of investors cannot be enforced in the US.

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Claim 19 Investment protection in TTIP will be better for Central & Eastern EU (CEE) countries than what they currently have in their BITs with the US.

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Claim 20 We need investment protection provisions in TTIP to include them in a deal with China.

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21 CHAPTER 6 Useful resources and ideas for action

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23 Endnotes

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AUTHORS: Cecilia Olivet, Natacha Cingotti, Pia Eberhardt DESIGN: Ricardo Santos

Published by the Transnational Institute, Friends of the Earth International and Corporate Europe Observatory. Amsterdam/Brussels, June 2017 Acknowledgements We would like to thank Lucile Falgueyrac for insightful comments to the draft of the texts. We are also grateful to Luciana Ghiotto and Tohan Ayewoh for their contributions. Contents of the report may be quoted or reproduced for non-commercial purposes, provided that the source of information is properly cited.

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Glossary/Acronyms

International Investment Agreement (IIA): a treaty concluded between states. It mostly includes bilateral investment treaties (between two states), regional investment treaties (between a group of more than two states), and investment chapters in free trade agreements. There are currently more than 3,300 IIAs, mostly signed between developed and developing countries. The harmful use of the related ISDS mechanism has led a number of countries to question existing models for such agreements.

Arbitration tribunals have argued that it protects investor’s legitimate expectations. Investors use this provision most often and successfully when attacking public interest measures. In three-quarters of cases won by US investors, tribunals found an FET violation.

Legitimate expectations: arbitration tribunals have interpreted the FET concept as protecting investors’ ‘legitimate expectations’ even if the term is not included in existing treaties, such as NAFTA. They have also considered it as creating a right to a stable regulatory context, binding governments to maintain

Arbitration tribunal: in ISDS proceedings,

laws, regulations or other measures, even in light of

a panel of three corporate lawyers who examine evidence brought forward in a dispute and decide on the outcome.

Most favoured nation (MFN): a clause

ICSID: The International Centre for Settlement of Investment Disputes of the World Bank, located in Washington. It is used in most investor-State dispute settlement (ISDS) mechanism cases as the host of the arbitration tribunal.

new knowledge or democratic votes.

used in many investment treaties to ensure that ‘more advantageous’ privileges granted to investors under third party agreements are made available to all signatories of a treaty. Arbitrators have used MFN provisions like a ‘magic wand’ that allows investors in ISDS proceedings to ‘import’ more favourable rights from other treaties signed by the

Investment: generally speaking, an invest-

host state. This multiplies the risks of successful

ment is an allocation of capital that is expected to generate a profit. Investment treaties tend to list what types of assets are protected under their terms. These range from ownership of companies to intellectual property rights.

attacks against public policy.

Expropriation: the taking of property without consent. Investment treaties and trade agreements distinguish between direct and indirect expropriation. Nationalization is a typical form of direct expropriation and is compensated if investor protections are in place. Indirect expropriation is a vague concept. In reality, any law or regulatory measure that lowers a foreign investor’s expected profits can be challenged as an indirect expropriation. Tribunals have interpreted legitimate health, environmental and other public safeguards in this way, ordering states to pay compensation.

Fair and equitable treatment (FET): a provision found in trade and investment agreements which ensures that companies’ investments are treated fairly and equitably. This potentially catch-all clause is the most dangerous for the public interest.

National treatment (NT): this principle in many investment agreements holds that foreign investors have to be treated at least as favourably as domestic ones. This has been interpreted, in ISDS proceedings, as a prohibition of any measure that de facto disadvantages or could somehow disadvantage foreign investors, even if it was not its purpose.

Performance requirements: these are measures that a government can impose on investors to assure that their investment makes a positive contribution to the economy or country’s development. Governments could for example demand investors to ‘ensure for a level of local content for products and services, achieve a specific level of local job, carry out a given level of research and development (R&D) activity in the country, or limit itself to a certain volume or quantity of sales of goods or services on the national market’.2 IIAs tend to ban governments from imposing any performance requirement measures.

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Regulatory measures: these are any measures (new legislation, amendments in legislation etc.) taken by a government in order to implement the national law.

Damages in investment arbitration: these are claimed by the foreign investor launching ISDS proceedings against a host government. Foreign investors will claim financial reparation from the host government in order to wipe out the consequences of the regulatory act that started the dispute in the first place.

Award: the outcome of an ISDS proceeding as determined by arbitration tribunal in charge of settling the dispute.

Regulatory chill: occurs when the mere possibility to be subject to an ISDS claim and an obligation to pay financial compensation to a foreign investor as a result of the enactment of a regulatory change inhibits a state to regulate in the public interest.

UNCTAD: the United Nations Conference on Trade and Development, the division in charge of trade and development at the United Nations. They have a section dedicated to investment and publish regularly the most comprehensive statistics on international investment treaties and investor-State disputes. Stockholm Chamber of Commerce (SCC): one of the venues most regularly used for filing and hearing arbitration disputes after the ICSID and UNCITRAL tribunals.

International Chamber of Commerce (ICC): an international corporate lobby group, which is a strong promoter of free trade and investment agreements. The ICC has its own International Court of Arbitration, which it claims is ‘the world’s leading body for the resolution of international disputes by arbitration’.3

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EFILA: The European Federation for Investment Law and Arbitration is a lobby group and think tank that claims to be ‘a platform for a merit-based discussion on European and international investment law’ and to ‘foster an objective debate about the current system of investment arbitration’.4 It was set up in 2015 by the arbitration law industry itself as a response to the increasing criticisms against the ISDS system. Its secretary general, Nikos Lavranos, is a former negotiator and policy advisor on bilateral investment treaties for the Netherlands, currently acting as head of legal for Global Investment Protection, a major global promoter of strong investment protection for investors.

BusinessEurope: one of Europe’s biggest and most powerful corporate lobby groups. It represents business associations from European member states in Brussels, where its offices are located. It claims to be ‘the leading advocate for growth and competitiveness at European level, standing up for companies across the continent and campaigning on the issues that most influence their performance’. BusinessEurope strongly promotes the conclusion of free-trade agreements. It has declared that the conclusion of TTIP should be one of the top priorities of the current European Commission. BusinessEurope is a keen supporter of ‘state-of-theart investment protection to protect investment’.5 Faced with growing public opposition to ISDS, it has been one of the most outspoken corporate lobby groups in its critique of the European Commission’s attempt to reform ISDS system.

Trans-Atlantic Business Council (TABC): one of the most high-profile corporate lobby groups acting at a transatlantic level. TABC was born in 2013, out of the fusion of former Transatlantic Business Dialogue and the European American Business Council. It represents the interests of transnational companies that have been keen users of the ISDS system, such as Chevron or Philip Morris, and has been one of the fiercest lobby forces in favour of TTIP.

Winning the debate against pro-ISDS voices An activist’s argumentation guide

Although the Investor-State Dispute Settlement System (ISDS) has been discredited, policy-makers continue to negotiate new investment protection treaties CHAPTER 1

During the last five years, investment treaty arbitration has shifted from an obscure topic, mostly discussed among a handful of experts, to an issue openly debated in the public arena. Nowadays, the threats posed by the investor-State dispute settlement (ISDS) mechanism are mobilising hundreds of thousands across European capitals.6

ISDS is the topic of shows hosted by TV comedians,7 and has also resulted in a European Commission (EC) public consultation that attracted the second highest number of responses in history.8 The critics have also multiplied at an exponential level, starting with a few isolated public interest groups and academics considered as ‘black sheep’,9 growing into a wide spectrum of critics, ranging from UN experts10 and UN institutions like the United Nations Conference on Trade and Development (UNCTAD),11 to an increasing number of legal scholars,12 economists,13 Nobel Prize winners,14 and prominent politicians.15 Most recently, the European Association of Judges (the EAJ, representing 44 judges associations in Europe)16 and the largest German Association of Judges17 published critical public statements against the ISDS mechanism. The scope of civil society groups denouncing the issue has also grown from a small and specialized nucleus of trade campaigners to a worldwide movement composed of trade unions, consumer groups, environmental organisations and small and medium-sized enterprises.18 Even the pro-free trade libertarian Cato Institute has adapted its position and become a strong voice against ISDS.19 Governments, which had long kept quiet about the dangers of investment protection treaties out of fear of deterring foreign investors, have started speaking out and taking action to roll back the regime.20 Even European countries, wary of being at the receiving end of lawsuits, have started questioning the inclusion of this mechanism in negotiations for investment treaties with the United States.21 Meanwhile, the EC has called for the abolishment of all bilateral investment treaties (BITs) between European Member States (Intra-EU BITs).22 The change in attitude towards the issue has also been reflected in the media. Five years ago, only a handful of journalists followed and reported on the issue. Today, opposition to the arbitration system is slowly gaining space in the columns of mainstream media, such as The Financial Times,23 The Economist,24 The Guardian,25 The Washington Post,26 and Bloomberg,27 among others. As encouraging as these recent developments might be, we are still very far away from a worldwide consensus on the fact that ISDS is outdated and needs to be ousted once and for all. In fact, there are still many strong and powerful advocates of the current investment protection system, mainly composed of investment lawyers, arbitrators, business representatives and some policy-makers. Most of them are proposing ‘benevolent self-regulation’,28 with the aim of re-legitimising the system. They do not want to go beyond fine-tuning and light reforms.

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Moreover, several key governments are currently pushing for the signing of new investment treaties with broad investor rights, including the right to sue at international tribunals. The European Union strongly seeks the expansion of the investment protection system. And in fact it is currently negotiating (or about to start negotiations for) new binding and enforceable treaties with investment protection throughout the world. This includes: - The recent finalization of negotiations with Singapore, Vietnam, and Canada, all of which will now move forward to ratification. - Ongoing negotiations for agreements with the US (TTIP), Japan, China, Indonesia, the Philippines, Mexico, and Myanmar. - Preparations for negotiations with Australia, New Zealand, Hong Kong, Taiwan, South Korea, Turkey, and Chile. Beyond the European Union’s agenda, several important negotiations are currently under way or being finalized at the regional level: - Negotiations on a Regional Comprehensive Economic Partnership (RCEP) – a proposed free trade agreement (FTA) between the 10 member states of the Association of Southeast Asian Nations (ASEAN) and six other countries – Australia, China, India, Japan, South Korea, and New Zealand – which started in November 2012 and include ISDS. - The Trans-Pacific Partnership (TPP) agreement between 12 Pacific Rim countries, signed on 4 February 2016, of which ratification is currently in limbo. Undoubtedly, ISDS has been highly discredited over the last years. Not only have the critical voices grown stronger, but the evidence is also on their side. However, we are still far away from a scenario in which a majority of governments would reject a trade deal for including the ISDS mechanism and to roll back their commitments to the current investment protection regime. There is still a long way ahead in terms of taking on the pro-ISDS voices and countering their arguments. This guide aims to help activists in doing so, by identifying the ‘defenders’ of the system and their arguments, and how to counter their position based on reliable facts and evidence.

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Winning the debate against pro-ISDS voices An activist’s argumentation guide

Identifying the pro-ISDS voices and the interests that lie behind them

CHAPTER 2

Among the broad spectrum of pro-ISDS voices, a core group of prominent defenders are particularly vociferous. These are primarily investment lawyers, law firms, and business lobbyists with vested interests and are therefore in favour of maintaining a system that is in a downward spiral of delegitimization. For this group, a vibrant and active flow of investment arbitration disputes means a steady and healthy income. This is a stark difference from those campaigning against ISDS who do not benefit financially from this system but rather strive to defend people’s rights. Among the defenders of the ISDS system, there are however various positions that can be broadly defined as follows: the ‘nothing is wrong with ISDS’ camp, and the ‘reform ISDS to prevent a collapse of the arbitration system’ camp. The latter embraces some changes that do not alter the essence of the system. Understanding the nature of the actors defending the ISDS system, their arguments, and what interests they represent is necessary to help us refine our own arguments.

The ‘nothing is wrong with ISDS’ camp ‘Any proposal that alters any of the fundamental elements of international arbitration constitutes an unacceptable assault on the very institution’ Charles Brower, investment arbitrator29 In light of the overwhelming criticism of the ISDS system, the number of staunch defenders is shrinking. These include those that see nothing wrong with how investment protection and investment arbitration operate, and do not acknowledge that some reforms are needed to ‘improve’ the system. This group’s key strategy to dismiss criticism is to argue that ‘the critics lack understanding of how the system actually works’. These were the words of Lord Goldsmith, former UK Attorney General who has a long practice in arbitration as part of the Ivy League law firm Debevoise & Plimpton.30 Other examples include the International Bar Association (IBA) writing that ‘criticisms are based on misconceptions and inaccurate information’.31 Lawyer Gary Born, from the law firm Wilmer Cutler Pickering Hale and Dorr denounced the fact that ‘some of that criticism is surprisingly ill-informed’;32 or veteran arbitrator Stephen Schwebel argues that ‘uninformed or misinformed critics have made so much uninformed and misinformed noise that the EU has been moved to appease the views of those critics’.33 Finally, Alexis Mourre, current president of the ICC International Court of Arbitration, maintains that ‘the dysfunctionality of the process has been exaggerated’.34

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The attempt to discredit ISDS critics as ‘uninformed’ is a tactic to avoid engaging in the substance of arguments. It has been used by those who defend the system as it stands with the same old and unsound arguments posited for decades – states win the majority of cases, investment treaty tribunals cannot order states to amend their laws or change their policies and in fact ISDS safeguards state’s sovereign right to regulate, and finally an international tribunal is needed to resolve issues of international law. Because these arguments do not hold the test of evidence [see chapter 3 for details], focusing on presenting critical views as myths and misinformed is clearly the default position. This group also resorts to scaremongering with governments to block even the mildest attempt of reform. For example, when the European Union produced a proposal for an investment court system (ICS), elite arbitrator Stephen M Schwebel immediately argued that ‘it would replace a system that on any objective analysis works reasonably well with a system that would face substantial problems of coherence, rationalisation, negotiation, ratification, establishment, functioning and financing’.35 Meanwhile, business associations, like the European Services Forum, have put pressure on the EC to dismiss the ICS proposal and continue with the current system, arguing that ‘the Commission should use its negotiating mandate under the Lisbon Treaty to improve and strengthen, and not dilute, the generally accepted fundamental protections that are currently enshrined and relied upon in the existing 1,400 BITs’36. The arbitration industry lobby arm, The European Federation for Investment Law and Arbitration (EFILA) has also argued in strong terms against an ICS.37 Finally, this group strongly believes that they are losing the public opinion battle, and their way to regain control has been twofold. On the one hand, law firms, such as Covington & Burling LLP, are urging companies to ‘make sure their voices are heard’ and ‘communicate the value of strong and effective investor state provisions’.38 On the other hand, they are going to great length to convey the positive aspects of investment arbitration to the general public. This has been the approach taken, for example, by the Stockholm Chamber of Commerce when promoting the film The Quiet Triumph: How Arbitration Changed the World39 or through regular posts on their blog.40

Criticisms of investment arbitration are ‘largely ideological, if not emotional. No rational discussion is possible’ Philippe Pinsolle a partner at law firm Quinn Emanuel Urquhart & Sullivan

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The ‘reform ISDS to prevent a collapse of the arbitration system’ camp

‘Reform proposals abound. Most of them focus on changes to investor-State dispute settlement, not on substantive investment law’ Stephan Schill 41 Academic Catharine Titi probably summarized best how many in the world of international arbitration currently feel, when she wrote, ‘reforming the system may be preferable to rejecting it as a whole, to avoid throwing the baby out with the bathwater’.42 Over the last five years, we have seen a big shift within the pro-ISDS voices, with an increasing number calling for a reform of the system to address its current legitimacy crisis. These investment lawyers are ready to embrace marginal reforms in order to pre-empt structural changes. This is noted by some prominent voices in arbitration circles. According to leading arbitrator William Park, ‘If investment arbitration is to fulfill its promise [...] some mechanism must be found to promote greater sensitivity to vital host state interests. Otherwise, investor/government arbitration may fall prey to public pressure arising from a backlash against investor victories’.43 Another elite arbitrator Bernard Honatiau puts it more bluntly, ‘it is only at this price [accepting some changes in the way the system works] that arbitration will remain in the decades to come the “natural judge” of international commerce’.44 However, proposals for change are mainly procedural in nature and do not alter the system fundamentals. They revolve around the following points: increasing transparency,45 ‘moderating [arbitral community] love of unilaterally appointed arbitrators’,46 curbing the double hat problem of lawyers sitting as arbitrators while acting as counsel in other cases,47 and narrowing the language of substantive protection clauses, such as fair and equitable treatment (FET) or indirect expropriation.48 Real change would entail promoting treaties and agreements which support and protect human and labour rights, people’s health, and the environment, as well as secure policy space for elected governments to expedite the necessary social-ecological transition of our economies and societies, without facing prohibitively costly obligations and liability risks. Such agreements must also establish the primacy of human rights and environmental law over trade and investment law. The limitations of the reform proposals have not been highlighted by critics of the system only. In fact, arbitrators themselves have acknowledged their superficial nature: arbitrator Charles Brower recognized that the arbitration community is only prepared to accept reforms as long as ‘such strategies do not require a fundamental redesign of the entire system’.49 In a recent speech, prominent investment arbitrator Michael Reisman admitted that changes, for example, the narrowing of definitions of key clauses such as FET, expropriation, most favoured nation (MFN), or even the replacement of investor-State dispute settlement with a permanent tribunal with judges selected by state parties do not alter what he calls ‘the great compact’, the foundational arrangement of the international investment system.50 So let us not forget that the reform proposals urged by the arbitration industry are fundamentally a self-preservation exercise.

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Winning the debate against pro-ISDS voices An activist’s argumentation guide

CHAPTER 3

Back to basics: the most

common pro-ISDS claims are not supported by evidence

As of April 2017, 2,369 BITs and 303 treaties with investment provisions are in force worldwide.51 While these treaties cover a relatively small percentage of the world’s investment flows, they have already resulted in a large number of investment arbitration claims damaging the public interest. To legitimize the investment arbitration system and expand it via new treaties, international investment arbitration proponents use a number of common claims, which are not supported by evidence.

CLAIM

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More rights for investors bring more investments.

PRO-ISDS ARGUMENTS - ‘If countries don’t sign up to BITs they will have nothing to offer and will lose the investment, as has been seen many times’, investment arbitrator Francisco Orrego-Vicuña52 - ‘It is in the interests of developing countries to put in place these kind of framework agreements that are going to allow Canadians to trade and invest with confidence’, Edward Fast, Canada’s former minister for international trade53 - ‘There is an obvious strong link between investment agreements and the amount of investment a country attracts’, Pascal Kerneis from the European Services Forum (ESF), an EU lobby group for big services companies54 - ‘Strong investment protection standards should be a policy priority for all governments in order to promote new waves of prosperity-enhancing FDI’, International Chamber of Commerce (ICC)55

REALITY

Signing investment protection treaties that grant investors ample rights do not bring the claimed economic benefits.

COUNTER EVIDENCE The conclusion that by signing investment treaties, governments would attract more foreign direct investment (FDI) is not supported by the evidence presented in academic studies, business surveys and by governments’ experience.

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While some econometric studies find that investment treaties do attract investment, others find no effect at all – or even a negative impact. Qualitative research suggests that the treaties are not a decisive factor in whether investors invest abroad.56 European Trade Commissioner Cecilia Malmström has admitted that most studies showed no ‘direct and exclusive causal relationship’ between international investment agreements (IIAs) and FDI.57 Moreover, the business community’s response as presented in various large-scale surveys concludes that investment protection agreements are not a key determinant in deciding to invest abroad. - For example, in 2010, the EC interviewed 300 European companies about the relevance of investment treaties and found that only 10 per cent had a working knowledge of these treaties, 40 per cent had some general awareness, and 50 per cent had no knowledge at all.58 - According to a survey of American multinationals (among Fortune 500 companies), ‘the responses indicate a low level of familiarity with BITs, a pessimistic view of their ability to protect against adverse host state actions, and a low level of influence over FDI decisions’.59 - Another survey, carried out among political risk insurers (companies that assess the risk and provide insurance to operations of business overseas), established that few private risk insurers ‘find BITs of much relevance when determining the risk of investment projects’.60 Some quotes illustrate the point: ‘The existence of a BIT may provide us with comfort, but they are not specifically taken into account when we are considering investment projects.’ (UK political risk insurer);61 ‘BITs can perhaps simplify our analysis… but in practice they are hardly ever decisive.’ (Dutch political risk insurer).62 Finally, after careful analysis, many governments discovered that the promised increase in foreign investments when signing IIAs was not fulfilled. - South Africa, for example, reports that it has not received significant inflows of FDI from partners with whom it signed BITs. But it received investments from jurisdictions with which it did not sign BITs. According to Xavier Carim, Deputy Director General of South Africa’s Department of Trade and Industry, ‘South Africa does not receive significant inflows of FDI from many partners with whom we have BITs, and at the same time, continues to receive investment from jurisdictions with which we have no BITs. In short, BITs have not been decisive in attracting investment to South Africa’.63 - Brazil is the only country in Latin America that has never ratified a BIT that includes ISDS. Yet it receives the largest amount of FDI in the region. - Ecuador’s auditing of its BITs revealed64 that most of the FDI comes from countries with which Ecuador has no BITs. In fact, most foreign investments in Ecuador originate from two countries that are not covered by BITs. - Hungary is one of only two Central and Eastern European Union countries without BITs with the US. Yet, during the last 10 years, Hungary has been one of the biggest recipients of US FDI in the region.65 - Most investments from the US to Europe are made in the Western European Member States, even though none of these countries have an investment treaty with the US. According to UNCTAD, the ‘FDI stock held by US investors in these nine [Central and Eastern European] countries equals one per cent of the total US FDI stock in the EU.’66

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CLAIM

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Investment deals only protect investors against extreme sovereign abuse and discrimination.

PRO-ISDS ARGUMENTS - It is ‘categorically not true’ that investment arbitration ‘will allow companies to sue governments over changes in regulation pertaining to health, environment, consumer protection, etc. if these changes negatively affect the profits of companies’, Representatives from US and European industry67 - Cases against states are ‘relatively rare’ and brought in ‘extreme’ situations according to the International Chamber of Commerce (ICC)68 - ‘Claims can be brought only where there is, usually, an arbitrary or capricious action of the state in relation to an investment’, Lord Goldsmith, investment arbitration lawyer, Debevoise & Plimpton69 - ‘A government that conducts itself in an unbiased and non-discriminatory fashion has nothing to worry about’, Scott Miller, an international business expert70

REALITY

Investment deals are a powerful tool for corporations to challenge legitimate and non-discriminatory legislation to protect public health or the environment.

COUNTER EVIDENCE Protection standards in investment agreements are not limited to extreme sovereign abuse or discrimination. The vague wording of these investor rights has paved the way for claims challenging all kinds of legitimate and non-discriminatory legislation and regulatory measures. Philip Morris’ investor-State challenge of Australia’s plain tobacco packaging law71 is a good example to show that investment treaties are not harmless. The law applies to all tobacco producers, therefore it is non-discriminatory. It was upheld by Australia’s High Court,72 which did not consider it an expropriation of property (expropriation is one of the bases for awarding damages in investment arbitration). The law is based on extensive research and is supported by leading public health experts as a means to reduce the appeal of smoking. In other words, Philip Morris used an investor-State claim to attack a public health legislation that is non-discriminatory, does not result in the expropriation of property, is in line with Australia’s constitution, and is backed by scientific evidence. If the grounds for investor-State arbitration were as narrowly defined as industry lobbyists claim, Philip Morris would not have been able to launch this lawsuit. While the case was dismissed by the arbitration panel, investors are still able to use ISDS to initiate cases that cannot be considered as sovereign abuse. The Philip Morris case is not an isolated example. Foreign investors have initiated lawsuits challenging many other government legislation that are far from ‘extreme sovereign abuse’: - Regulations to provide affordable public services (water, electricity)73 - Regulations to protect labour rights74 - Regulations to deal with economic crises75

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- Regulations in the area of public health76 - Regulations to protect the environment (bans on harmful chemicals, bans on fracking77 etc.) - Regulations to support energy transition and against climate change78 - Increase in corporate taxes79 - Regulation of natural resource extraction, such as bans on mining80 There is a plethora examples of how these policies have been challenged. To name a few: Policy being challenged Case

• Philip Morris v. Uruguay (tobacco)81 • Philip Morris v. Australia (tobacco) • Eli Lilly v. Canada (medicines)82 • Dow AgroSciences v. Canada (cosmetic use of pesticides)83

Regulations to improve labour rights (minimum wage, minimum hiring of locals) • Veolia v. Egypt • Astaldi v. Honduras • Golden East v. Mongolia90

Policy being challenged Case

Public services:

Health

Bans on mining

delivery of water

(due to environmental regulations)

• Bechtel v. Bolivia • Suez v. Argentina • Vivendi v. Argentina • Biwater Gauff v. Tanzania

• Pacific Rim v. El Salvador84 • Renco v. Peru85 • Gabriel Resources v. Romania86 • Infinito Gold v. Costa Rica87 • Bilcon v. Canada88 • Glamis v. United States89

Regulations regarding disposal of hazardous waste • Metalclad v. Mexico • Tecmed v. Mexico • Baird v. USA

Environmental protection • Lone Pine Resources v. Canada (fracking)92 • Vattenfall v. Germany I (coal)93 and II (nuclear energy) 94 • Methanex v. United States (chemical and groundwater contamination) • Parkerings v. Lithuania • Ethyl v. Canada • TransCanada v. United States95

Regulations to remedy discrimination and inequalities among the country’s population • Piero Foresti v. South Africa91

Policy being challenged Case

Increase in corporate taxes

Debt restructuring as a result of financial crises

• Vodafone v. India96 • Micula v. Romania97 • US agribusiness v. Mexico98 • Tullow Oil v. Uganda99

• Poštová bank and Istrokapital v. Greece • Marfin Investment Group (MIG) v. Cyprus • Abaclat v. Argentina

A research study by Professor Gus van Harten, based on 162 publicly available investment treaty cases up to 2013, shows that in 44 per cent of the cases, investors have challenged a judicial decision, and in 37 per cent of the cases they have challenged a legislative measure100 – a shocking finding considering that measures taken by the judiciary and the legislative can never be branded as ‘extreme sovereign abuse’. Beyond the fact that investment agreements are used to attack legitimate public policy measures, it is also important to question why foreign investors should have a higher level of protection than national investors and everyone else in society in the first instance. ISDS grants foreign investors privileges that are not available for anyone else under international law, even though the international legal protections available to everyone else are far weaker than those available to foreign investors.

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CLAIM

3

Investor-state arbitration is independent and impartial.

PRO-ISDS ARGUMENTS - ‘The current ISDS system provides a neutral body to decide disputes – certainly more neutral than state courts’, David W. Rivkin investment arbitrator with law firm Debevoise & Plimpton101 - Investors will have access to an ‘impartial, less expensive and more effective dispute-resolution mechanism’, Government of Canada102 - As ‘the separation of powers and judiciary independence and impartiality is not always evident in some states’, arbitration ‘provides an opportunity to seek for independent and impartial judicial decisions, based on technical and legal grounds’. The system is also described as ‘neutral’, ‘fact-based’, and ‘objective’ by Business Europe103 - ‘Arbitration is a globally recognized, neutral, efficient and well-functioning system for dispute resolution’, Stockholm Chamber of Commerce104 - ‘International arbitration (…) is the most appropriate forum in light of the international character of the dispute providing the investor with a neutral forum to settle its dispute’, Investment arbitration lobby group EFILA105

REALITY

Arbitrators have a vested interest in pleasing investors and are riddled with conflicts of interest that question their impartiality.

COUNTER EVIDENCE Investor-State arbitration has a built-in pro-investor bias. Disputes are usually decided by a tribunal of three for-profit arbitrators. Unlike judges, they have no institutional guarantees of independence and impartiality.106 They do not enjoy security of tenure; they are not prohibited from having other paid positions; there is no ban on lawyering on the side; and they do not have a flat salary. Rather they are paid per case, earning daily fees of $3,000 (US dollars) and more. They are, as investment lawyer Lord Goldsmith put it, ‘judges for hire; dependent on their next appointment for their fees.’107 Such a one-sided system, where only investors can bring claims, creates a strong incentive for arbitrators to side with investors – as investor-friendly rulings pave the way for more claims, more appointments, and higher income in the future. It is a fact that arbitrators tend to adopt an expansive (investor-friendly) interpretation of various clauses – backed by serious statistical analyses of 140 investment-treaty cases.108 These interpretations prioritize the protection of the property and economic interests of transnational corporations over the right of states to regulate and the citizens’ right to self-determination. The fact that arbitrators are appointed on an ad-hoc basis has led to an increasing amount of conflicts of interest among arbitrators, which questions their impartiality. For example: - The international investment arbitration industry is dominated by a small and tight-knit Northern hemisphere-based community of elite arbitrators: Just 15 arbitrators, nearly all from

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Europe, the US or Canada, have decided 55 per cent of all known investment-treaty disputes. This small group of lawyers has been referred to by some as an ‘inner mafia’. A 2015 survey by business magazine The American Lawyer claims: ‘Our survey finds more billion-dollar cases than ever – and they’re being heard by the same tiny club of arbitrators.’109 This has led to growing concerns, including within the broader legal community, over conflicts of interest as this small group of influential arbitrators has a particularly big interest in growing their business and expanding arbitrator power.110 - Arbitrators’ pro-corporate bias: Several prominent arbitrators have been members of the board of major multinational corporations, including those which have filed cases against developing nations. Nearly all share businesses’ belief in the paramount importance of protecting private profits.111 - Arbitrators sit both as arbitrator and counsel: The fact that some arbitrators also act as counsel in investment treaty cases raises doubts about the arbitrator’s independence and impartiality since they could be motivated to interpret the law in a way that benefits the party they represent as counsel in another case. Brigitte Stern, the investment arbitrator with the highest case load worldwide, has argued that the fact that lawyers can act as arbitrators and counsel is like if a football player could also act as the referee.112

International investment arbitration is the only hope for justice and protection for investors, especially in countries with a weak judicial system.

CLAIM

4

PRO-ISDS ARGUMENTS - ‘Companies investing abroad do encounter problems which - for a variety of reasons - cannot always be solved through the domestic legal system’, European Commission113 - ‘Investors need to be sure that they will be treated fairly when they invest abroad. Investment protection provisions aim to do just that and to ensure foreign firms’ investments are treated in the same way as domestic ones’, European Commission114 - ‘ISDS arbitration is needed because the potential for bias can be high in situations where a foreign investor is seeking to redress injury in a domestic court, especially against the government itself’, USTR115 - ‘Investor-State Dispute Settlement provides necessary protections for companies who have been treated unfairly by foreign governments […] it is a last resort for investors who have been harmed by the host government’, Hendrike Kuehl, Trans-Atlantic Business Council116

Investors have numerous options to protect their investment. However, only investment arbitration gives them the opportunity to challenge government public interest measures.

REALITY

COUNTER EVIDENCE There is a wide array of options, beyond investment arbitration, available to foreign investors who feel that they have been mistreated by the state’s actions.

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First and foremost, foreign companies are entitled to seek compensation for wrongdoings at national courts, as with national companies and citizens in the countries in which they operate. Using domestic legal remedies should be the norm. The lack of judicial independence in a few countries cannot be the excuse to promote investment arbitration worldwide. It is important to note that most ISDS lawsuits are brought against democratic countries with a strong rule of law. A 2014 study found that from the mid-nineties onwards, most ‘investment arbitrations have been filed against governments exhibiting, on average, a relatively high level of democratic development and rule of law’.117 If investors want to have further ‘insurances’, they can recourse to:

* Private political risk insurance:

These cover both assets and contracts. Asset coverage may include risks such as confiscation, nationalization, and expropriation. The coverage of the contract may include losses due to repudiation of the contract, currency inconvertibility, and cancellation of the contract due to political violence. The policy of confiscation, nationalization and expropriation of insurance can usually be extended to cover cancellations of licenses, trade embargoes, strikes, riots, loss of income following expropriation and other types of political risk. One thing to keep in mind is that for private political risk insurance, the existence of BITs is not relevant in assessing the risk of investment projects.

* The Multilateral Investment Guarantee Agency (MIGA) of the World Bank provides guarantees subsidized by states investors against losses caused by risks such as expropriation, currency inconvertibility, currency transfers, civil war or riots.

* Insurance offered by the investor’s home country:

Most of the countries that export capital provide insurance to companies that invest abroad, similar to those offered by the World Bank.

Finally, if none of these reassurances are enough for investors, they can always negotiate access to investor-State arbitration in specific contracts. But then the government can assess if offering that possibility is justified for the specific investment instead of giving a blank check to all investors from a certain country.

CLAIM

5

States win more cases than investors, therefore the system is not biased.

PRO-ISDS ARGUMENTS - ‘It is wrong to condemn a system on the basis of dire predictions rather than facts. Overall data reflect that states win more than investors’, over 50 lawyers, including many well-known arbitrators118 - ‘The statistical evidence shows that respondent states in arbitral proceedings consistently win more cases than the investors who bring claims against states.’ Investment arbitration lobby group EFILA119 - ‘The perception has been created – and fuelled by anti trade/ investment/ globalization NGOs and the media – that investment arbitration is a system that only benefits investors and is detrimental to public interests of the state and its citizens. But statistics show that states win more cases than investors. More generally, the critics fail to appreciate that legal certainty and access to independent judicial bodies is essential for every foreign investor. That is the very reason why investment arbitration has been included in more than 3,000 Bilateral Investment Treaties (BITs) worldwide.’ Nikos Lavranos, Secretary General of investment arbitration lobby group EFILA120

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REALITY

States always lose, even when they ‘win’ and settle cases. COUNTER EVIDENCE

According to UNCTAD’s World Investment Report 2016, 36 per cent of all known concluded cases were decided in favour of the state, 27 per cent in favour of the investor, and 26 per cent were settled (the rest were discontinued). While these figures might look state-friendly at first sight, it is likely that many of the settled cases involve payments or other concessions to the investor. Germany, for example, settled its first dispute with Swedish energy company Vattenfall by agreeing to reduce environmental standards121 imposed on one of Vattenfall’s coal-fired power plants. If we combine settlements and decisions in favour of the investor, the percentage of cases benefitting investors increases to 53 per cent; therefore, the statistics are relatively pro-investor. In addition, it is important to note that the above statistics do not cover the many situations in which no case was filed, however an investor successfully used the threat of a lawsuit to obtain concessions from a state (see claim 6 on regulatory chill). One can also argue that, since only investors can initiate lawsuits, states can never really win; they may – at best – not lose a case. And even when the tribunal decides that the state has not breached the investor’s rights, governments regularly have to pay hefty bills for legal fees that can dent public budgets. According to UNCTAD, legal costs involved in investor-State arbitration have skyrocketed in recent years.122 For the known cases with available data, the Organisation for Economic Co-operation and Development (OECD) estimates that legal and arbitration costs averaged over $8 million (US dollars), exceeding $30 million (US dollars) in some cases.123 The Philippines government spent $58 million (US dollars) to defend two cases against German airport operator Fraport124 – the equivalent of the salaries of 12,500 teachers for one year or vaccination costs for 3.8 million children against diseases, such as tuberculosis, diphtheria, tetanus, and polio. Finally, and on a more technical note, UNCTAD has recently produced a second set of statistics, which only looks at investor-State cases which passed the first hurdle (where arbitrators decide issues, such as whether there really is an investment etc.) and for which there was an actual decision of the arbitrators (rather than a settlement or a discontinuation of a case) investors won 60 per cent of the cases and states only 40 per cent.125 In other words, when investors do actually have a case and are willing to continue with it to the end, they have a high chance of winning.

Laws and regulations cannot be revoked by investment tribunals, therefore ISDS does not undermine the regulatory powers of governments.

CLAIM

6

PRO-ISDS ARGUMENTS - ‘Under no circumstances does a ruling under ISDS require a state to revoke a law, regulation or any other measure, even in cases where the particular law, regulation or measure has been found to violate the bilateral agreement. The ISDS arbitrators only allocate awards […] Contrary to what is often claimed, ISDS does not limit the policy space of states, including in the area of public goods and services. Instead, it helps establish a balance between the right of states to regulate and the rights of investors to protection

17

under international law […] The purpose of the ISDS is not to compromise the policy space of the state regulator.’ European employers’ association BusinessEurope126 - ‘ISDS does not limit what policy measures governments may adopt.’ Stockholm Chamber of Commerce127

REALITY

By putting enormous pressure on public budgets, ISDS claims can push governments to think twice about regulatory measures, postpone them, or even weaken regulation.

COUNTER EVIDENCE While it is true that arbitration tribunals generally do not order government to repeal a policy measure, they can order governments to pay millions of US dollars in compensation. The cost of lawsuits can be a deterrent for governments trying to implement public interest legislation. The amounts demanded by investors in treaty cases have been on the increase. A recent survey reports that between 2013 and 2014 there were ‘59 treaty disputes […] with an amount in controversy of at least US$1 billion—including 10 cases with stakes of at least US$15 billion’.128 It is almost impossible to ascertain when the fear of a lawsuit discourages regulation. Nevertheless, it is known that ISDS can reduce the regulatory space for decision-makers in at least two ways: First, there is evidence129 that the mere threat of a multi-million claim can put pressure on governments to avoid a regulation that they know investors will consider as violating their rights. Reflecting on NAFTA, a former Canadian official acknowledged: ‘I’ve seen the letters from the New York and DC law firms coming up to the Canadian government on virtually every new environmental regulation […]. Virtually all of the new initiatives were targeted and most of them never saw the light of day’.130 For example, when tobacco giant Philip Morris first threatened to sue Uruguay, the government considered relaxing its new legislation to meet the tobacco company’s demands.131 While the case was eventually decided in favour of the state, this lawsuit, together with a similar one against Australia caused other countries, including New Zealand, to postpone their plans to introduce stricter rules on cigarette packaging.132 A former Indonesia government official also recently acknowledge that the threat of ‘arbitration is the only reason’ why the government exempted Australia-based Newcrest Mining from a prohibition on open-pit mining in protected forests in early 2000s.133 Second, ‘regulatory chill’ can also happen as a result of filed investor-State claims. For example, the city of Hamburg agreed to lower environmental requirements as a result of a claim initiated by energy giant Vattenfall;134 Canada reversed a ban on toxic chemical MMT and agreed to a $13 million (US dollars) payment as a result of a claim initiated by Ethyl;135 and the government of Indonesia granted mining company Newmont an exemption to a law that requested companies to process raw materials domestically before export, which aimed to strengthen industrialization.136 Law firms too are actively encouraging investors to use the threat of arbitration as a tool to scare governments away from regulation.137 As described by Peter Kirby, from law firm Fasken Martineau, ‘it’s a lobbying tool in the sense that you can go in and say, “Ok, if you do this, we will be suing you for compensation”. It does change behaviour in certain cases’.138 According to Stephen Jagusch, partner at law firm Allen & Overy, ‘treaty claims can provide a very powerful means of putting pressure on state opposition and must be considered as part of counsel’s advice on overall dispute management strategy.’139

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Investor-state dispute settlement fosters the rule of law.

CLAIM

7

PRO-ISDS ARGUMENTS - ‘Far from undermining the rule of law, investment treaty arbitration ensures that states honor their obligations, thereby reinforcing the rule of law’, over 50 lawyers, many of whom are known investment arbitrators140 - ‘ISDS is a means to promote and ensure respect of international law, i.e. the rights and obligations agreed between states in their investment agreements’, BusinessEurope141 - ‘ISDS strengthens [the] rule of law by creating incentives to ensure that basic due process and [investors’] rights are being recognized’, United States Trade Representative142 - Investment arbitration ‘may provide a powerful incentive to review and modernize their domestic legal systems’, Professor Rudolf Dolzer, University of Bonn143

ISDS risks undermining the rule of law by creating a parallel system to the legal systems in force.

REALITY

COUNTER EVIDENCE The idea that investment arbitration improves the rule of law in countries where national courts ‘cannot be trusted’ is fundamentally flawed.144 A detailed analysis of the issue by Mavluda Sattorova from the University of Liverpool concluded that, ‘Given its historical origins and existing design, the international investment regime appears to be an unlikely candidate for bringing about positive transformation in legal and bureaucratic culture and practices in host states’.145 ISDS does not contribute to the rule of law because:

1

Amongst other things, the ‘rule of law’ is about procedural fairness and judicial independence. But, these principles are not realized in the investment arbitration system. ISDS ‘tends to favour claimants and, more specifically, those states and other actors that wield power over appointing authorities or the system as a whole’.146 ISDS weakens the rule of law by removing the procedural protections of the legal system and using a system of adjudication with limited accountability and review.147

2

The ‘rule of law’ is also about equal access to justice and accountability. Instead, ‘ISDS exacerbates inequality under the law by giving foreign investors access to a parallel and preferential legal system; diminishes the role of various government actors and institutions; and poses challenges to transparency and public participation’.148 Yale law Professor Judith Resnik, Harvard law Professor Lawrence Tribe, along with Nobel Laureate Joseph Stiglitz and a few others have made a strong case on this point: ‘To protect and uphold the rule of law, our ideals of fairness and justice must apply in all situations and equally to everyone. ISDS, in contrast, is a system built on differential access’.

3

The rule of law is about upholding democratically enacted national laws. However, that task cannot be left in the hands of unaccountable investment arbitrators. Academics have argued that the idea that ISDS promotes the rule of law makes little sense because ‘control over the development of the rule of law has been outsourced to ISDS tribunals who may push that law in directions that are out of step with what

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the public of the various contracting states view as reflecting the proper balance between “property rights” and the “right to regulate”’.149 Arbitral tribunals have a track record in undermining legitimate and democratic national laws, the Philip Morris v. Australia case is a clear example of this.

4

If the aim of ISDS is to strengthen the rule of law, most investment claims would be directed against states with unstable legal and political infrastructures. But, instead, many ISDS lawsuits are initiated against democratic countries with a strong rule of law. A 2014 study found that from the mid-nineties onwards, most ‘investment arbitrations have been filed against governments exhibiting, on average, a relatively high level of democratic development and rule of law’.150

The best way to strengthen the rule of law in countries is to support the development of an independent national judiciary. Providing an external source of dispute resolution for foreign investors reduces the incentive to improve the quality of local judicial systems. While proponents of the system argue that ISDS is needed in weak judicial systems to provide and encourage FDI, the root problems remain since ‘host governments will be less motivated to improve their domestic legal systems, and other aspects of the rule of law that would benefit domestic stakeholders as well’.151 Further academic research on this issue supports this statement: ‘under some circumstances BITs may lead to lower institutional quality in subsequent years.’152 According to some commentators ‘one is left with an impression that the good governance argument has been engineered in an attempt to deflect criticism that has been increasingly mounted against the widening scope of investment treaty rules and the growing reach of the institute of investor-State arbitration’.153

CLAIM

8

Investor-state dispute settlement is a useful tool for small and medium-sized companies (SMEs).

PRO-ISDS ARGUMENTS - ‘Investment protection under existing treaties has to a large degree been sought by small and medium-sized companies (SMEs)’, Stockholm Chamber of Commerce154 - ‘SMEs represent a significant number of ISDS claimants’, Stockholm Chamber of Commerce155 - ‘ISDS is mainly directed to small and medium size companies’, BusinessEurope156

REALITY

The system is too expensive for small and medium-sized companies (SMEs) and the main users and beneficiaries are big companies and tycoons.

COUNTER EVIDENCE ISDS is a system geared towards big companies. The costs of a case – $8 million (US dollars) in legal fees and arbitration costs on average,157 create a significant barrier in terms of access for small and medium size enterprises (SMEs) – as pointed out by critical SME associations.158

20

Moreover, contrary to claims by ISDS supporters, an analysis of the data about foreign investors that have filed claims and received compensation shows that beneficiaries have mostly been companies with more than $1 billion (US dollars) in annual revenue, especially extra-large companies with more than $10 billion (US dollars) and individuals with more than $100 million (US dollars) in net wealth. Furthermore, the success rate of extra-large companies (especially at the merit stage) has largely exceeded the success rates of other claimants.159 It is therefore not surprising that SMEs themselves have come out strongly against this mechanism. For example, the Federal Association of SMEs in Germany (BVMW, Bundesverband mittelständische Wirtschaft) published the results of a representative survey among their member companies on TTIP (the EU-US trade deal). Eight hundred companies responded; regarding ISDS, the survey shows broad scepticism: only few companies (6 per cent) agree that ISDS is an important instrument abroad; another 10 per cent agree to some extent; 48 per cent disagree; and 14 per cent disagree to some extent.160 This adds to statements already made by SME representative in opposition to the inclusion of an investment protection agreement in TTIP, for instance claiming that, ‘The ISDS mechanism favors big corporations, who because of it can circumvent existing national law and the state jurisdiction’.161

Investment arbitration can help protect the climate.

CLAIM

9

PRO-ISDS ARGUMENTS - ‘If we can combine treaty terms that truly reflect the role played by private investment for a better environment, and the existing enforcement mechanisms of international arbitration, I believe true progress for the environment could be achieved on a global level’, Annette Magnusson, Secretary General, Stockholm Chamber of Commerce162 - ‘Bilateral investment treaties (BITs) and investor-state dispute settlement (ISDS) come in, by assisting in the enforcement of legally binding environmental obligations’, Global Investment Protection firm163 - ‘Arbitrators have developed a supranational rule of law that has helped to create uniform standards for acceptable sovereign behaviour. […] Imagine if similar principles could be developed for climate change mitigation expectations […]?’ David W. Rivkin investment arbitrator with law firm Debevoise & Plimpton164

ISDS has been repeatedly used to undermine environment protection measures. Facing multimillion-dollar lawsuits, governments might think twice before adopting climate change mitigation legislation.

REALITY

COUNTER EVIDENCE Avoiding catastrophic climate change is the defining challenge of our time. If we are to have a chance of preventing extremely dangerous levels of global warming and save the environment, governments will have to take bold actions, such as: - Leaving much of the world’s fossil fuels – oil, coal, and gas – unexploited; this should include banning the use of risky technologies, such as hydraulic fracturing, which is used to extract shale gas;

21

- Phasing out nuclear power; - Denying or revoking mining permits for coal, gold, and silver (among others) because of environmental concerns or violation of the human and social rights of indigenous communities; - Cutting off subsidies to the oil sector; - Rejecting dirty energy projects; - Implementing fossil fuel taxes; - Supporting the development of local, community-driven renewable energy projects. However, the ability of governments to introduce the right laws and regulations is severely constrained by the international investment regime. A growing number of investor-State lawsuits are initiated by fossil fuel, energy, and mining companies. They target government initiatives aimed at protecting the environment and avoiding climate change.165 For example, as of November 2015, nearly half of all cases pending at the World Bank’s International Centre for Settlement of Investment Disputes (ICSID), where most investor-State disputes are tried, related to oil, mining, gas, electric power, and other energy projects.166 Also, as of December 2014, 60 per cent of known ISDS cases against EU member states had targeted environmental legislation.167 Some emblematic examples that show how corporate rights trump the environment include:

Policy being challenged Case

Bans on mining due to environmental concerns

Regulations to fight for energy transition and against climate change

• Pacific Rim v. El Salvador168

• Vattenfall v. Germany I (environmental restrictions on coal)172

• Renco v. Peru169 • Gabriel Resources v. Romania170 • Infinito Gold v. Costa Rica171 • Bilcon v. Canada • Glamis v. United States

• Vattenfall v. Germany II (phasing out nuclear energy)173 • Lone Pine Resources v. Canada (fracking moratoria)174

Other environmental protection measures • Methanex v. United States (chemical and groundwater contamination)175 • Ethyl v. Canada (ban of environmentally damaging gasoline additive)176

• Perenco/Burlington v. Ecuador (oil taxes) • TransCanada v. United States (cancellation of pipeline due to environmental concerns)

While preventing catastrophic global warming requires bold government actions, the fossil fuel industry will bear a significant loss. Against this background, the inclusion of ISDS in giant trade deals under negotiation (such as TTIP or RCEP to mention just a few) would allow them to put pressure on governments enacting climate-friendly policies by claiming financial compensation through the mechanism. Gus van Harten, an investment law expert from the Osgoode Hall Law School in Toronto, Canada, has argued that ‘faced with risks of uncapped financial liability due to ISDS claims, states may be deterred from implementing measures to fulfil their climate change responsibilities’. He has developed an exemption clause intended to protect a future climate agreement from the adverse effects of investor-State dispute settlement.177 In October 2015, the European Parliament adopted a resolution endorsing the proposed ‘carve-out’.178

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Foreign investment promotes prosperity for all. Therefore, being against investment protection agreements is being against development.

CLAIM

10

PRO-ISDS ARGUMENTS - ‘BITs make a genuine contribution to economic development’, Vinson & Elkins partner George Burn179 - ‘ISDS is an important tool for protecting investments and therefore for promoting and securing economic growth in the EU’, European Commission180 - ‘As numerous studies have found, ISDS and the investment rules that it enforces fosters high-quality FDI that is critical to poverty elimination and global growth.’ The US National Association of Manufacturers181

Closing the development gap is not dependent on investment agreements. The risk of being sued because of enacting policies with specific development purposes can prove very burdensome for governments keen on regulating investors and implementing specific industrial objectives.

REALITY

COUNTER EVIDENCE Most BITs include a preamble whereby the signing governments blindly assert that it would ‘increase prosperity in both states’182 or that ‘investments will stimulate the economic development of the contracting parties’.183 However, the belief that unregulated entry of FDI will improve a country’s economic development has been widely discredited.184 UNCTAD has warned that regulation of foreign investment is crucial to attempt to restrict the negative social and environmental impacts of foreign investors and to guarantee some positive contribution to economic development.185 According to UNCTAD, ‘more and more governments are moving away from the hands-off approach to economic growth and development that prevailed previously’186. In the extractive industries sector, for example, the current trend among countries rich in natural resources is to enhance the state’s influence.187 For example, South Korea and Taiwan, considered to be success stories of industrial development, used extensive controls on foreign investment.188 Investment treaties put a heavy price tag on the regulatory powers of the government that tries to ensure that FDI achieves poverty eradication, technology transfer, respect for human rights and environmental protection. IIAs have the effect of severely limiting the ability of governments to design a national investment strategy that involves a tighter regulatory framework for foreign investors. For example, IIAs forbid governments from applying performance requirements,189 but these requirements have been used by developed countries to achieve both economic and non-economic goals.190

23

Furthermore, IIAs generally restrict the state’s ability to control the entry and exit of speculative capital, despite the fact that many governments have used these controls with a great degree of success to prevent financial crises.191 Some forms of capital controls also serve to guarantee that capital that enters a country contributes to economic development as they require a minimum time of remaining in the host country.192 Investment agreements help to perpetuate the asymmetry between developing and developed countries. They provide a safeguard for investors that come from countries with the capacity of exporting investments, while preventing developing countries from applying similar industrialization policies that helped developed countries achieve such a status decades ago.193 Countries such as South Africa, Indonesia, India, Venezuela, Bolivia, and Ecuador, which have terminated many of their BITs, are not anti-development. On the contrary, they aim to put developmental issues back in the hands of the state, after confirming that the investment agreements they had signed in the past did not bring development to their countries. United Nations Rapporteur Alfred de Zayas recently noted the negative effects of IIAs on development, ‘Over the past 25 years ISDS has undermined fundamental principles of the United Nations, state sovereignty, democracy and the rule of law. Far from contributing to human rights and development, they have resulted in growing inequality among States and within them’.194

CLAIM

11

If a government terminates investment protection agreements, investors will leave.

PRO-ISDS ARGUMENTS After South Africa terminated its BITs: - South Africa’s decision to terminate its BITs would ‘certainly affect the investment climate’ and that ‘the EU would reduce its foreign direct investment (FDI) if South Africa doesn’t rethink its proposed dumping of BIT’, Karel de Gucht, EU Trade Commissioner at the time195 - ‘If the [South African] government is striving to attract investment, they are shooting themselves in the foot’ by deciding to exit these treaties, Markus Schrader, the Head of Economic Cooperation and Development at the Embassy of Switzerland196 After Indonesia terminated its BITs: - ‘There may still be a significant drop in FDI into Indonesia if it proceeds with the termination of all existing BITs.’ Andi Yusuf Kadir, partner at law firm Baker & McKenzie197 - ‘I understand the politics of Indonesia’s decision, and the symbolism of the choice of the BIT with their former colonial rulers as the first for termination will be lost on no-one. But in my opinion, Indonesia will regret this decision in the long-run and may well end up back-pedalling on it.’ George Burn, partner at law firm Vinson & Elkins198 After India announced to terminate its BITs: - European Commission Vice-President Jyrki Katainen sent a letter to the Indian Finance Minister pointing to rising capital costs and legal uncertainty as concerns that would keep away investors199

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Foreign investors will remain in the country as long as they can make profit, even after governments terminate Investment protection agreements.

REALITY

COUNTER EVIDENCE In the same way that there is no empirical evidence proving that FDI attraction is correlated to the signature of BITs (see Claim 1), the claim that investors will leave when governments terminate their treaties is unsubstantiated. So far, governments like South Africa, Indonesia, Bolivia, Ecuador, and Venezuela, which terminated many of their BITs, did not experience a mass exodus of the foreign investors, as predicted by politicians and investment lawyers. For example, only one year after the termination of the Germany-South Africa BIT in 2013, research led by Germany’s KfW Development Bank found that South Africa is still ‘a favoured destination for German direct investment’ with more than €600 million flowing into the country in the fourth quarter of 2014.200 There are about 600 German companies in South Africa, providing a total of approximately 100,000 jobs. These companies include global players like Siemens, Mercedes Benz, Volkswagen, and BMW. None have left the country. In 2016 Walter Lindner, German Ambassador to South Africa, emphasized that these companies would not be in South Africa if they did not see opportunities there.201 In fact, he believes that many of these businesses are planning substantial increases in their investments in the country.202 The South African example proves that the BIT framework is not the only consideration that investors take into account when analyzing the future of their investments. Germany’s KfW Development Bank recognized that issues such as infrastructure (a well-developed road and rail network, as well as modern seaports and airports), education and healthcare services, and a stable financial system are more important.203 This body also recognizes that the existence of an ‘independent legal system offers a reliable framework for business activities’. Therefore, ‘As South Africa has a well-functioning legal system that should guarantee the protection of property, with limitations in the agricultural sector, the change in regime should not be a cause for major concern to investors’. The evidence supports the claim by South Africa’s minister of trade and industry, Rob Davies, that ‘If there are investors who stay away because they feel that we don’t have old-style, dated, antiquated bilateral investment treaties in place, I can assure you there are plenty of other investors from other parts of the world who are happy to come and don’t insist on this. And, if they want to make that decision [to stay away], well, they’ll be keeping themselves out of an economy which is part of a growing continent and that’s their choice’.204 Similar to the case of South Africa, in March 2014, the government of Indonesia discontinued 17 out of 64 IIAs, including agreements with the Netherlands, Italy, France, Spain, and China. Abdulkadir Jailani, from the Indonesia Ministry of Foreign Affairs noted: ‘It is a matter of fact that the review process does not really affect the foreign investment inflows to Indonesia. In fact, 2014 was the year in which foreign direct investment (FDI) to Indonesia hit a record high of US$78.7 trillion, according to the latest data by the Indonesian Investment Coordinating Board (BKPM)’.205 In 2014, the Netherlands, the first country with whom Indonesia terminated its BIT, was the fourth largest foreign direct investor in 2014.206 Interestingly, in 2015, FDI to Indonesia increased by 19.2 per cent in relation to the year before and the Netherlands remained the fourth leading investor.207 The Multilateral Investment Guarantee Agency (MIGA), a member of the World Bank Group has also noted that ‘provided we can expect a country to remain committed to foreign investments and the rule of law, cancelling all its BITs would not have a substantial impact on whether, and to what extent, MIGA would be willing to underwrite investments to that country’.208

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Winning the debate against pro-ISDS voices An activist’s argumentation guide

The EU Investment Court System (ICS) proposal unpacked: nothing more than smoke and mirrors CHAPTER 4

Confronted with unprecedented public opposition to the privileges granted to foreign investors through trade agreements such as CETA (between EU and Canada) and TTIP (between EU and the US), the European Commission (EC) and some EU member states have produced a number of proposals to ‘reform’ the system. The EU’s new approach has been re-branded as the Investment Court System (ICS).209 This model has been already included in CETA and the EU-Vietnam Free Trade Agreement. The EC is currently negotiating this model in other EU trade deals under negotiation. These proposals however do not reduce the risks that the decried investor privileges pose to democracy, public budgets, and public policy.

CLAIM

12

The EU investment proposal is a big step in the right direction. It balances the interests of NGOs, businesses and Member States.

PRO-ISDS ARGUMENTS - ‘Today’s [ICS] proposal builds on many comments and ideas received from a broad range of EU stakeholders [… and] sets out a series of far-reaching reforms. Big change is what many people and stakeholders have called for, and I agree with them’, Cecilia Malmström, EU Commissioner for Trade210 - ‘CETA moves decisively away from the traditional approach of investment dispute resolution and establishes independent, impartial and permanent investment tribunals, inspired by the principles of public judicial systems in the European Union and its Member States and Canada, as well as international courts such as the International Court of Justice and the European Court of Human Rights (…) CETA represents an important and radical change in investment rules and dispute resolution’, Council of the European Union, CETA interpretative instrument211

REALITY

The ICS proposal is nowhere near a middle ground. It keeps ISDS fully alive, even expanding its scope and reinforcing the clout of the arbitration system.

COUNTER EVIDENCE The EC has put a lot of effort (particularly in recent debates around the CETA agreement) to brand the new proposal on investment protection as a reformed version of ISDS, which takes into account the concerns of all stakeholders and creates a middle ground for everybody.

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But the proposal is nothing near a real reform, even less a middle ground, as it maintains the most problematic features of investor-State arbitration, such as: Very strong rights for investors, including the most dangerous clauses of ‘fair and equitable treatment’ and indirect expropriation (see claim 13 and 14). - Foreign investors will still be able to undermine democracy and the public policy space to regulate. They will still be able to initiate cases in international tribunals, claiming financial compensation from taxpayers’ money over health, environmental, financial and other domestic safeguards that they consider to undermine their rights. The proposed investment protection system will still be able to scare governments away from regulations in the public interest (the so-called regulatory chill effect) because of the fear of pressure on public budgets (see claim 6). - Foreign investors will still enjoy special rights over national investors and the rest of society, allowing them to circumvent existing courts and sue states in private international tribunals. On the contrary, national investors and citizens need to rely on domestic courts to claim the enforcement of their rights. - The judgment over whether legal and constitutional public policies are right or wrong will remain surrendered to for-profit lawyers with a vested interest in this system. Despite the EC and European Council’s declarations, the CETA text proposed for signature does not foresee a cooling-off period for arbitrators before or after their appointment, nor any ban from sitting as arbitrators in other cases, or from acting or sitting as private lawyers (see claim 16). - The system remains a purely one-sided tool that only gives rights to investors without any obligations to contribute to public policy objectives or respect environmental, social, health and safety, or other standards.

Emblematic cases like Vattenfall v. Germany, Philip Morris v. Uruguay or Lone Pine v. Canada would not be possible under the current EU investment protection proposal.

CLAIM

13

PRO-ISDS ARGUMENTS - ‘The ability of investors to take a case before the tribunal would be precisely defined and limited to cases such as targeted discrimination on the base of gender, race or religion, or nationality, expropriation without compensation, or denial of justice’, European Commission212 - ‘European Trade Commissioner Cecilia Malmström has proven that she takes people’s concerns... seriously... She wants to rule out claims against new environmental, health and consumer protection rules. Abuse of the investment protection system will therefore be factually impossible.’ German daily Frankfurter Allgemeine Sonntagszeitung on the ICS proposal213

All these cases could still be launched and would likely prosper under the Investment Court System.

REALITY

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COUNTER EVIDENCE Close analysis of emblematic ISDS cases (see below) through the lens of the ICS proposal shows that these controversial disputes could still be launched and would likely prosper under the ICS.214 Cases analysed: - TransCanada claiming that the US decision to reject the contested Keystone XL oil pipeline was based on ‘politically-driven’ and ‘arbitrary criteria’; - Philip Morris calling Uruguay’s anti-smoking measures ‘excessive’, ‘unreasonable’ and ‘arbitrary’, while they were clearly intended to protect public health; - Lone Pine arguing that Quebec’s introduction of a moratorium on fracking was ‘arbitrary, idiosyncratic, unfair and inequitable’; - Energy giant Vattenfall arguing that the German government’s decision to introduce, as a prerequisite for the construction of Vattenfall’s coal-fired power plant along the Elbe River, a new permit for water use (aimed to improve environmental protection and the health and safety of communities) was a ‘politically motivated, unreasonable measure’ (in Vattenfall I v. Germany). There is nothing in the ICS’ proposed rules that prevents companies from challenging governments’ decisions to protect citizens’ health and the environment. And there is nothing to prevent arbitrators from deciding in their favour, ordering states to pay billions in taxpayer compensation for legitimate public policy measures. Here are some of the main reasons why the ICS would fail to prevent any of these controversial cases again:

Investors’ right granted under ICS

‘Fair and Equitable Treatment’ standard The EC claims they narrowed the scope of the standard, but in reality it remains ambiguous. The EU included ‘manifest arbitrariness’ as one of the criteria that investors can invoke as a breach of this clause. By doing so, they leave the door wide open for investors to initiate new claims and for arbitrators to interpret the clause to their discretion.

How investors could argue that governments have breached the ICS protection clauses It is common for investors to argue that the measures sanctioned by the state were ‘arbitrary’. For example: - Philip Morris called Uruguay’s anti-smoking measures ‘excessive’, ‘unreasonable’ and ‘arbitrary’ and denied they are related to public health policy.215 - TransCanada in its arbitration claim over the US claimed that the decision was based on ‘politically-driven’ and ‘arbitrary criteria’.216 - Investors presented similar arguments in the cases of Lone Pine v. Canada217 and Vattenfall v. Germany.218 - In some cases, arbitration tribunals have also considered arbitrary measures taken in the interest of the environment. This was the case of the tribunal’s ruling in Bilcon v. Canada.219 So, what constitutes manifest arbitrariness is clearly not well defined and there is plenty of unwelcome discretion that arbitrators can exercise.

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Investors’ right granted under ICS

Investors’ ‘legitimate’ expectations The EC has even widened the concept of fair and equitable treatment by explicitly allowing tribunals to take into account the notion of investors’ ‘legitimate expectations’.

Indirect expropriation The annex that is meant to clarify the article on indirect expropriation opens a big loophole. It states that only ‘legitimate’ public policy measures that are not ‘manifestly excessive’ would be out of reach from indirect expropriation demands. But, what is the criterion to determine whether the government measure is legitimate and when it is excessive?

How investors could argue that governments have breached the ICS protection clauses It is very common for investors to claim a breach of their legitimate expectations. - Philip Morris, in its case against Uruguay, claimed that ‘the measures [taken by Uruguay] frustrate one of the most fundamental expectations that any investor may have, which is that a host State will comply with its own law and respect private property’.220 - TransCanada in its case against the US, argues that its ‘reasonable expectation’ that the US would process its application ‘fairly and consistently with past actions’ was ‘not met’ and that the government had led it to believe that the pipeline would be approved.221 - Finally, an arbitration tribunal ruled that Canada frustrated Bilcon’s ‘legitimate expectations’ as the company had been encouraged by provincial government officials to pursue the quarry project.222 Even in cases where the government’s measure that led to dispute was undeniably for a public purpose, investors have routinely claimed the policies were illegitimate and excessive. Here are a few examples: - Philip Morris International argued that the restrictions imposed by Uruguay’s anti-tobacco legislation did ‘not bear any rational relationship to a legitimate governmental policy’.223 - TransCanada argued that the US administration’s decision on the pipeline was not for a legitimate public policy objective.224 - Lone Pine accused Canada of ‘arbitrary’ and ‘capricious’ behaviour, questioning the authority’s motivation because it had not proved that fracking was harmful.225 - Vattenfall similarly contested the public interest dimension of the regulatory changes on the water permit.226

(For more details, see also Claims 14 and 15)

ICS narrows the interpretation of the Fair and Equitable Treatment (FET) clause.

CLAIM

14

PRO-ISDS ARGUMENTS - ‘The standards of protection have been narrowly and clearly defined to prevent abuse. For example, the key standard of “fair and equitable treatment” sets out a closed list of government’s behaviour that investors are protected from’, European Commission227 - ‘CETA includes clearly defined investment protection standards, including on fair and equitable treatment and expropriation and provides clear guidance to dispute resolution tribunals on how these standards should be applied’, CETA interpretative instrument as agreed by Canada and the EU228

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REALITY

Under the current ICS system, the FET clause remains as threatening as ever.

COUNTER EVIDENCE Fair and equitable treatment (FET) is the most widely used and expansively interpreted investment protection standard when investors attack public interest measures to date.229 In three-quarters of cases won by US investors, tribunals found a FET violation.230 The EU’s current investment protection model keeps this dangerous clause fully alive. Contrary to the EC’s assertion, the FET formulation included in CETA, the EU-Vietnam trade agreement, and the TTIP negotiation proposal has not been limited. The inclusion of ‘manifest arbitrariness’ as one of the criteria that investors can invoke as a breach of this clause leaves the door wide open for investors to initiate claims because of public interest regulations. It also preserves arbitrators’ possibility to interpret the FET clause to their discretion. Investors already routinely claim that the FET clause has been breached by using the justification that a regulatory measure was ‘arbitrary’ (see examples in Claim 13). In addition, the new proposal allows investors to claim that this provision has been breached when their ‘legitimate expectations’ are affected. This dangerous language expands the meaning of this clause as it explicitly protects investors’ ‘legitimate expectations’. What constitutes a legitimate expectation is subject to interpretation. The EC proposals request that investors’ legitimate expectations be preceded by ‘a specific representation’ of the state. But the latter is so poorly defined that a ‘specific representation’ might be any measure, action or even verbal indication by a government official that, according to the investor, had induced it to make or maintain the investment.

CLAIM

15

ICS protects the right to regulate.

PRO-ISDS ARGUMENTS - The ICS has been hailed as ‘a new system that sets down the right to regulate in black and white’ by Commissioner Malmström231 - ‘With this new system, we protect the governments’ right to regulate’, European Commission Vice President, Franz Timmermans232 - ‘CETA includes modern rules on investment that preserve the right of governments to regulate in the public interest including when such regulations affect a foreign investment’, CETA joint interpretative instrument as agreed by the EU and Canada233

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The investment chapters in CETA and the EU-Vietnam trade agreements, as well as those being negotiated with other countries threaten governments’ right to regulate.

REALITY

COUNTER EVIDENCE CETA,234 its interpretative declaration, the EU-Vietnam FTA,235 and the TTIP negotiating texts236 all include language on the right to regulate. But with the exception of withdrawn subsidies (whereby investors are prevented from claiming compensation from the state), these formulations on the ‘right to regulate’ will not prevent investors from claiming compensation from governments. In other words, countries may regulate, but if their regulations violate the commitments they have made in CETA or other treaties, they can be ordered to pay compensation. The prospect of potential multi-billion compensation orders endangers this right, as governments might avoid formulating regulations out of fear of being sued. The ‘right to regulate’ language does not change that. Furthermore, the EU’s proposal for investment protection contains the same wide-ranging ‘substantive’ rights for foreign investors as existing international treaties, which have been the legal basis for hundreds of investor lawsuits against states, targeting regulations to protect health, the environment, and other public interests. The EC claims to have narrowed the scope of these rights, but in reality, significant loopholes remain. When sued by investors, states will have to prove that the measures they took were ‘necessary’ and not ‘arbitrary’, did not damage the ‘legitimate expectation’ of the investor, were not ‘manifestly excessive’ and were for a ‘legitimate’ public policy. Thus, it is very likely that the same egregious investor attacks, which have already undermined the right to regulate on the basis of existing agreements, might well take place under the EU’s proposal (see Claim 13). Under all investment protection rules proposed by the EU so far, not only are governments’ right to regulate left unprotected, on the contrary, such rules pave the way for further challenges to public interest regulations in the future. Even the US Chamber of Commerce agrees that the provisions included in investment treaties, as currently proposed by the EU ‘restrict the right to regulate’.237

ICS sets up an independent court and secures the impartiality of arbitrators.

CLAIM

16

PRO-ISDS ARGUMENTS - ‘The new Investment Court System will be composed of fully qualified judges, proceedings will be transparent, and cases will be decided on the basis of clear rules. In addition, the Court will be subject to review by a new Appeal Tribunal’, European Commission238 - ‘Today, we're delivering on our promise – to propose a new, modernised system of investment courts, subject to democratic principles and public scrutiny', European Commission239

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REALITY

The ICS, which is enshrined in CETA, the EU-Vietnam trade agreement and also proposed in other EU trade negotiations, is not independent, but has a built-in, pro-investor bias.

COUNTER EVIDENCE It is important to be aware of the differences between the ICS proposal and the investment arbitration tribunals under the ISDS model. The main disparity is that under the ICS investors can no longer nominate arbitrators to decide on a case. These will be picked from a roster of pre-selected candidates nominated by the states which are parties to the trade and investment agreements that include an ICS provision. This is why the Commission is now calling arbitrators (who have gained a bad reputation from being a small group of corporate lawyers with conflicts of interest) ‘judges’ and why other proponents of the system are calling it a ‘public’ system of dispute settlement, rather than private arbitration. The ICS, as enshrined in CETA, the EU-Vietnam trade deal, and as proposed for TTIP, is not judicially independent. Rather, it has a built-in pro-investor bias. The individuals deciding the cases will be highly paid lawyers with an interest in greater and longer cases. They will be paid per case by the parties in the dispute at a rate of $3,000 (US dollars) per day and there is no limit in the amount they can earn in total per case. Therefore, they maintain a strong financial incentive to interpret the law in favour of the investor, because as long as the system pays out to investors, arbitrators will receive more claims and earn greater fees. Their situation differs greatly to those of judges, whose salaries are fixed no matter how many cases they adjudicate and how long the cases last. One of the guarantees of the independence of the judiciary is exactly that judges are never paid by the parties in a dispute. There are other flaws which make the proposed ICS prone to bias. For instance, the list of conflicts of interest is very narrow and there is no cooling off period between being a ‘judge’ and ‘a practicing counsel representing investors’. So, future ICS arbitrators could be part of the small club of investment lawyers who have until now driven the boom in investment arbitration and grown their own business, by encouraging investors to sue and by interpreting investment law expansively to encourage more claims. The selection criteria for members of the tribunals also exclude expertise in legal areas outside of this club – areas which are less dominated by commercial interests, but might be relevant for rulings, such as national administrative, labour, or environmental law. Citing the flaws in the proposed appointment procedure for arbitrators and doubts about their financial independence, Germany’s largest association of judges and public prosecutors has questioned the ICS as it is included in CETA and also proposed for its twin deal TTIP: ‘Neither the proposed procedure for the appointment of judges of the ICS nor their position meet the international requirements for the independence of courts’, the judges wrote in a statement published in February 2016.240 The European Association of Judges has similar concerns.241 The ICS continues to act as a powerful tool for investors to threaten governments to refrain from policies that might endanger profits but benefit the people or the environment. There is still no convincing argument as to why we need ISDS in the first place.

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ISDS in TTIP is not needed and no one has yet proved otherwise

CHAPTER 5

Winning the debate against pro-ISDS voices An activist’s argumentation guide

The EU-US agreement under negotiation (also referred to as TTIP) has generated strong opposition movements in Europe and the US, since the negotiations started in 2013. The inclusion of investment protection provisions has been one of the most contentious issues. Whereas ISDS opponents often question the need to include investor protection in TTIP, proponents posit ever-creative arguments to justify it.

Including a ‘reformed’ and ‘modern’ investment protection system in TTIP is the ultimate chance to fix the problems of the past.

CLAIM

17

PRO-ISDS ARGUMENTS - Lobbyists for the Unites States Council for International Business and the Danish and Swedish Industry Federations wrote in a joint letter to the Financial Times: ‘We have a unique possibility of making a modern ISDS agreement which can balance the legitimate needs of governments to regulate public priorities with the legitimate needs of businesses to have reasonable and predictable protection of investments’. 242 Such an agreement, they argued, would ‘create a global gold standard’ which other countries would look to as a model. - The EC has echoed this perception: ‘what will be proposed in the TTIP context will set the standard for the further development of investment protection provisions and investment arbitration in EU investment negotiations. TTIP provides a unique opportunity for reforming and improving the system’.243

If you want to fix the problems, abandon investor-state arbitration in TTIP and elsewhere.

REALITY

COUNTER EVIDENCE Governments seeking to get out of the investment arbitration system always have the option to terminate or re-negotiate existing investment treaties. And many have done exactly this: South Africa, India, Indonesia, Bolivia, Ecuador, and Venezuela have terminated several BITs. South Africa has developed a domestic bill that does away with some of the fundamental and most dangerous clauses in international investment law. So does India’s new model investment treaty. Indonesia seems to be moving in a similar direction. And in Europe, Italy has withdrawn from the Energy Charter Treaty (ECT), a multilateral treaty created after the Cold War to integrate the energy sector of the former Soviet Union into Western markets – notably after having been hit and threatened with ECT-based claims in the renewables sector. The EC’s agenda, on the other hand, will make these kinds of ‘fixes’ practically impossible and, instead, will ‘lock-in’ the dangerous existing system. While governments can terminate a BIT (albeit with time and often with significant outside pressure), countries willing to exit TTIP (or other EU deals) will be left in a much more difficult situation. For instance, an EU member state wanting to exclude investment protection in TTIP would have to leave the EU to be able to do so (since the agreement will be signed by the EC on behalf of the 28 EU member states and become part of the EU’s legal body).

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In addition, the Commission’s ‘reform’ agenda for ISDS244 (in CETA, TTIP, and other EU FTAs) does not contribute to any meaningful change and does not address the fundamental problems of the investment protection system (see Claims in chapter 4).245 In fact, the Commission’s ‘reform’ agenda is used as a lubricant to make a flawed ISDS system more acceptable in an attempt to increase the coverage of ISDS. The EC might be claiming that it will contribute to limiting the excesses that have made private arbitration so unpopular, but in fact, it will reinforce its clout. According to UNCTAD, existing treaties between the US and EU member states cover only 1 per cent of the total US FDI stock in the EU.246 If TTIP is agreed, including ISDS will increase the coverage of the US FDI stock by investment arbitration to 100 per cent. It will significantly increase the probabilities of lawsuits; the estimation is that with an investment protection chapter in TTIP no less than 75,000 companies across the Atlantic will be empowered to sue governments at international tribunals.247 Fixing the problems of the past would mean rejecting the flawed investor-State arbitration system entirely, and establishing control mechanisms to halt abuse by transnational corporations. EU-US investments have taken place for decades and have grown to over €3,000 billion without ISDS, showing that ISDS is clearly not needed.

CLAIM

18

Without investment protection provisions in TTIP, the rights of investors cannot be enforced in the US.

PRO-ISDS ARGUMENTS - BusinessEurope gives this example: ‘If a domestic US law is adopted after TTIP enters into force and its content violates the agreement, such a law can still be found constitutional. In this case, the only possibility for a European investor to seek the protection agreed in TTIP is to bring the claim to international arbitration.’248 - ‘The US justice system can be questionable […] The US law does not recognise the problem of discrimination, therefore we need ISDS to ensure that investors’ rights can be enforced’, EU Member State representative249

REALITY

Nothing would hinder EU companies from enforcing the investor’s rights in local courts, but pro-investor arbitrators are more likely to rule in their favour than independent judges.

COUNTER EVIDENCE According to analysis by Jan Kleinheisterkamp from the London School of Economics, the above example presented by BusinessEurope is misleading because ‘international commitments by the US to European investors can very well be made applicable in US courts and even confer right of action to individuals’.250 So, it is entirely possible that EU investors could enforce the rights granted to them in TTIP by suing the US government in US courts, meaning ISDS would be unnecessary. This would only require that TTIP is implemented through legislation by Congress.

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There is an interesting honesty in the example that BusinessEurope uses to support the pro-ISDS position (see quote above). It describes a common scenario in which a law is in line with a country’s constitution, but violates an international investment treaty (which arguably includes greater substantive rights for investors than most countries’ constitutions). The EC often relies on two specific case examples of unfair treatment in Canada to justify its arguments. However, expert analysis of those cases has revealed that, contrary to the Commission claims, in both cases the companies were offered compensation or had access to the national courts.251 This illustrates what investment arbitration is really about: granting multinationals more generous property rights than domestic firms, communities, and individuals are granted by domestic law, and providing them with a parallel, exclusive legal system to claim these superior rights.

Investment protection in TTIP will be better for Central & Eastern EU (CEE) countries than what they currently have in their BITs with the US.

CLAIM

19

PRO-ISDS ARGUMENTS - CEE countries would benefit from replacing the former ISDS section of BITs with the US with a new and modern ISDS in TTIP, Business representative252 - ISDS, as proposed in TTIP, will help to achieve a better balance between the rights of the foreign investor and the right of governments to regulate, Ministry of Economy of Poland253

A TTIP with investor protection, even in its ‘reformed’ version, will not improve the regulatory space of CEE countries, but in fact will undermine it further.

REALITY

254

COUNTER EVIDENCE Current BITs between the US and CEE countries can be terminated at any time. However, signing TTIP will lock these countries into providing extensive rights to US investors indefinitely. All nine US-CEE countries’ investment treaties have now either met or long exceeded their initial runtime, and may thus be cancelled at any moment on the basis of a one-year notice. This gives Central and Eastern European governments the potential to control the investment protection framework of their investment flows with the United States. Agreeing to investor protection in TTIP will likely lead to a surge in US investors challenging governments’ regulatory measures at international arbitration tribunals. CEE countries have already been sued at least 10 times by US-based investors who invoked US BITs. Data available in the public shows that US companies, including powerful companies such as Cargill or Eurogas, have used ISDS provisions against countries that have BITs with the US following regulatory changes in those countries. While the exact terms of the awards and settlements mostly remain shrouded in secrecy, by the end of 2014 it was estimated that at least €2 billion had already been claimed from those countries by US investors (based on publicly available figures).255

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Accepting the ICS in TTIP will not improve the regulatory space of CEE countries: the substantive investment protection standards proposed for TTIP could lead to exactly the same investor attacks against legitimate public interest regulation as existing treaties (see Claims in chapter 4); and investors could lead the same lawsuit challenges to scare governments from regulating.

CLAIM

20

We need investment protection provisions in TTIP to include them in a deal with China.

PRO-ISDS ARGUMENTS - ‘I think it will be difficult one day to claim that we must avoid ISDS provisions with the U.S. because they are dangerous and then the next day insist to include the same kind of provisions in agreements with others such as China’, Karel de Gucht, former European Trade Commissioner256 - ‘It would seem inconsistent, arbitrary, unjustified and unreliable from the part of the EU to view ISDS as a central element in an investment treaty with emerging and developing countries while insisting on not having such a mechanism in a treaty with OECD members. Such a precedent would weaken the ability of the EU to include ISDS in future [bilateral investment treaties and free trade agreements] with non-OECD countries, for instance with BRICS’ (Brazil, Russia, India, China, South Africa), European employers’ federation, BusinessEurope257

REALITY

China wants corporate rights as much as the EU and granting them to Chinese investors is no less dangerous than granting them to US businesses.

COUNTER EVIDENCE It is questionable that TTIP will make these countries more or less likely to enter into a treaty with the EU. China, for example, has already built up a dense network of more than 130 BITs, aggressively catering for the interests of its companies abroad. China wants an EU-China agreement no less than the EU. Has China in the past refused to agree to this arbitration mechanism? China has agreed to this arbitration method more often than any other country except Germany. There is no indication that China is inclined not to sign this kind of agreement. Recently, China and Canada concluded a BIT that includes an investment arbitration mechanism.258 The fact that the US-Australia FTA from 2004 does not contain an ISDS provision, while the more recent Australia-China FTA from 2014 does indicates that countries like China accept that their partners negotiate agreements according to different standards. Finally, such an agreement would be no less dangerous than TTIP, allowing Chinese corporations to sue EU governments, and vice versa, when they change their laws.

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Winning the debate against pro-ISDS voices An activist’s argumentation guide

CHAPTER 6

Useful resources and ideas for action

A list of recommended resources to understand the ins and outs of investment arbitration Videos · The ISDS Files: a compilation of videos and visuals that unpack the dangers of ISDS259 · Several short animations exposes how international investment agreements are also at the heart of an international economic system that is enriching a small corporate elite at the public expense: - The Dark side of investment agreements (2012), by TNI260 - A short ISDS – A corporate system of injustice (2014), by Campact261 - Investor State Dispute Settlement and Financial Crises (2014), by WEED262 - The evolution of ISDS since 1990 (2015), by OneWorld263 · Short documentary Global Investment Rules: Threat to Democracy and the Environment (2011) by Democracy Center264

Short overview of the investment arbitration system · Investment Treaties & Why they Matter to Sustainable Development: Questions & Answers, IISD (December 2011) 265 · The legal monster that lets companies sue countries (November 2011) 266 · The obscure legal system that lets corporations sue countries (June 2015) 267

In-depth reports on specific aspects of investment arbitration · Profiting from Injustice (2012) put a spotlight on the arbitration industry to show how law firms, arbitrators and financiers are fuelling an investment arbitration boom and driving up the number of ISDS cases268 · A Transatlantic Corporate Bill of Rights (2013), describes how the ISDS mechanism in TTIP is a threat to public interest and our democracy269

· Profiting from Crisis (2014) shows how Corporations, backed by lawyers, use international investment agreements to scavenge for profits by suing Europe’s crisis countries270 · No fracking way (2014) explores how TTIP could open the way to multi-billion euro lawsuits from companies wanting to expand ‘fracking’ for shale gas and oil271 · Licensed to Grab (2015) shows how international investment rules undermine agrarian justice272 · Polluters’ Paradise (2015) exposes how investor rights in EU trade deals sabotage the fight for energy transition273 · Taxes on trial (2016) presents evidence of how trade deals, such as TTIP, threaten tax justice274 · Trading away Democracy (2016) exposed how CETA’s Investor Protection Rules threaten the Public Good in Canada and the EU275 · The Hidden Costs of EU trade deals (2014) unpacks known ISDS cases filed against EU member states between 1994-2014 (awards paid, policies attacked, countries most targeted) 276 · Oil Corporations vs Climate (2016) explains how investors use trade agreement to undermine climate action looks at the negative impacts of ISDS cases for climate and energy policies through the lens of the TransCanada vs USA case, launched following US President Obama’s rejection of the controversial Keystone XL Pipeline277 · Signing Away Sovereignty (2016) reveals how investment agreements threaten regulation of the mining industry worldwide278 · The Hidden Costs of RCEP and corporate trade deals in Asia (2016) looks into known ISDS cases filed against countries party to the negotiations on a Regional Comprehensive Economic Partnership (RCEP). The report also highlights the emblematic cases of India, Indonesia, Philippine, South Korea and Australia279

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A list of recommended resources to understand the EU investment policy Official EU Documents · EU “Trade for all” trade strategy280 · EU proposal for Investment Court System281 · CETA investment chapter282 · EU-Vietnam Investment chapter283 · TTIP investment chapter58

· Investment Court System: ISDS in disguise - 10 reasons why the EU’s proposal doesn’t fix a flawed system288 · Gus van Harten - Key Flaws in the European Commission’s Proposals for Foreign Investor Protection in TTIP289 · David Schneiderman - A CETA investment court is not the solution290

Critical analysis of EU Investment policy · ISDS: Courting foreign investors285 · Zombie ISDS286 · Investment Court System put to the test

287

· 6 MEPs from EPP, S&D and the Greens: TTIP: Commission casts window dressing291 · Rights for business, not for people: the EU agenda292

Ideas for basic research about your country’s international investment agreements (IIAs) and ISDS cases Do you want to know how many international investment treaties your country has signed and with whom? · UNCTAD database of IIAs gives access to information by country, including the texts293

Do you want to know how many times your country has been sued by foreign investors? Explore the lists of databases where known investor-State cases can be accessed · UNCTAD database of known cases294 · ICSID database with all cases295 · ITA LAW Collection of all available awards texts296

Other resources Newsletters on investment issues you can sign up to

Websites with valuable resources on international investment regime

· Investment Treaty News297

· Seattle to Brussels Network (S2B)301

· IA Reporter (only by subscription)298

· ISDS bilaterals.org302

· Kluwer Arbitration Blog299

· Network for Justice in Global Investment (NJGI)304

· Global Arbitration Review (only by subscription)300

· TNI/Trade and Investment305

· ISDS corporate attacks303

· CEO/Trade and Investment306 · International Institute for Sustainable Development (IISD)307 · Public Citizen / Global Trade Watch308

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Endnotes 1 This glossary is partly based on the one available at Bilaterals ISDS website: http://isds.bilaterals.org/?-the-basics-

Bernie Sanders http://www.huffingtonpost.com/rep-berniesanders/the-tpp-must-be-defeated_b_7352166.html

2 Suzy H. Nikièma, “Performance Requirements in Investment Treaties”, IISD Best Practices Series, December 2014, http://www.iisd.org/ sites/default/files/publications/best-practices-performancerequirements-investment-treaties-en.pdf

16 European Association of Judges, ‘Statement on the proposal from the European Commission on a new investment court system, 9 November 2015, http://www.iaj-uim.org/iuw/wp-content/ uploads/2015/11/EAJ-report-TIPP-Court-october.pdf

3 International Chamber of Commerce, http://www.iccwbo.org/ about-icc/organization/dispute-resolution-services/ icc-international-court-of-arbitration/

17 Deutsche Richterbund, “Stellungnahme zur Errichtung eines Investitionsgerichts für TTIP Februar 2016, http://www.drb.de/ fileadmin/docs/Stellungnahmen/2016/DRB_160201_Stn_Nr_04_ Europaeisches_Investitionsgericht.pdf

4 EFILA, www.efila.org 5 BusinessEurope, “10 priorities to boost investment, growth & employment - what companies expect from the new commission”, https://www.businesseurope.eu/sites/buseur/files/media/ imported/2014-00976-E.pdf, p19 6 In October 2015, an estimated 250,000 people marched against TTIP in Berlin. One of the key issues they were protesting was ISDS (http://www.bloomberg.com/news/articles/2015-1010/u-s-europe-trade-accord-draws-250-000-protestersin-berlin). In Amsterdam, the demonstration attracted 7000 people http://www.nrc.nl/handelsblad/2015/10/12/ demonstreren-tegen-de-duivel-van-het-geld-die-ttip-1547136 7 Dutch comedian Lubach talks about ISDS in TTIP and CETA https:// www.youtube.com/watch?v=us4oOUf9akw; Last Week Tonight with John Oliver discussed the lawsuit of Philip Morris against Australia https://www.youtube.com/watch?v=6UsHHOCH4q8 8 In response to the European Commission consultation on ISDS in TTIP, 150,000 sent a contribution. 97% of them flatly rejected the inclusion of ISDS in the agreement with the US (http://trade. ec.europa.eu/consultations/index.cfm?consul_id=179). 9 Professor M. Sornarajah, Profesor Gus van Harten (http://ssrn.com/ author=638855) and David Schneiderman were some of the very few academics who spoke about the bias in the investment arbitration system at a time when there were no critical voices in academia. 10 UN expert calls for abolition of Investor-State dispute settlement arbitrations - See more at: http://www.ohchr.org/en/NewsEvents/ Pages/DisplayNews.aspx?NewsID=16650&LangID=E, UN Rapporteur on Right to Health publishes report critical to ISDS http://daccess-dds-ny.un.org/doc/UNDOC/GEN/N14/501/83/PDF/ N1450183.pdf?OpenElement 11 Since 2010, UNCTAD has raised concerns about the state of the current investment regime and started to advocate for reforms http://investmentpolicyhub.unctad.org/Upload/Taking_Stock_of_ IIA_Reform_IIA_Issues_Note.pdf 12 Statement of Concern about Planned Provisions on Investment Protection and Investor-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership (TTIP) https:// www.kent.ac.uk/law/isds_treaty_consultation.html ; Open letter from lawyers to the negotiators of the Trans-Pacific Partnership urging the rejection of investor-state dispute settlement https:// tpplegal.wordpress.com/open-letter/; Letter by prominent US lawyers https://www.washingtonpost.com/r/2010-2019/ WashingtonPost/2015/04/30/Editorial-Opinion/Graphics/oppose_ ISDS_Letter.pdf 13 Lise Johnson, Lisa Sachs, and Jeffrey Sachs, “The real danger in TPP”, CNN, 19 February 2016 http://edition.cnn.com/2016/02/19/ opinions/tpp-threatens-sustainable-development-sachs; Dani Rodrik, “The Muddled Case for Trade Agreements”, 2015, http://www.project-syndicate.org/commentary/regional-tradeagreement-corporate-capture-by-dani-rodrik-2015-06 14 Former World Bank chief economist and Nobel-Prize winner Joseph Stiglitz has repeatedly criticised ISDS: Joseph Stiglitz, “The secret corporate takeover of trade agreements, The Guardian”, 13 May 2015 http://www.theguardian.com/business/2015/ may/13/the-secret-corporate-takeover-of-trade-agreements ; Joseph Stiglitz, “Let’s hope for better trade agreements - and the death of TPP”, The Guardian, 10 January 2016 http://www.theguardian.com/business/2016/jan/10/ in-2016-better-trade-agreements-trans-pacific-partnership 15 Elizabeth Warren, Opinion, “The Trans-Pacific Partnership Clause Everyone Should Oppose”, Washington Post, 25 February 25, 2015, https://www.washingtonpost.com/opinions/kill-the-disputesettlement-language-in-the-trans-pacific-partnership/2015/02/25/ ec7705a2-bd1e-11e4-b274-e5209a3bc9a9_story.htm,

18 Belgian SME interest group calls ISDS dangerous and unbeneficial for SME organizations. http://www.ucm.be/index.php/Actualites/ Un-traite-transatlantique-dangereux ; Germany’s largest small- and medium-sized enterprise interest group calls ISDS in TTIP “superfluous and to be firmly rejected”. http://www.bvmw.de/fileadmin/down load/Downloads_allg._Dokumente/politik/Positionspapier_TTIP.pdf 19 Simon Lester, Ben Beachy, “Special Courts for Foreign Investors”, The Hill, 15 April 2015, http://www.cato.org/publications/ commentary/special-courts-foreign-investors 20 Ecuador, Venezuela, Bolivia, South Africa and Indonesia all terminated BITs. Italy withdrew from the Energy Charter treaty (ECT), and Poland has recently announced that it will start terminating its treaties with EU member states (http://www.bloomberg.com/news/ articles/2016-02-25/poland-seeks-to-end-bilateral-investmentdeals-with-eu-members ). 21 For example: Brussels region rejects ISDS in TTIP: https:// www.facebook.com/TTIPbe/posts/796015287172960 ; French Senate and National Assembly reject ISDS in TTIP: http://www. euractiv.com/sections/trade-society/french-senate-tells-ttipnegotiators-abolish-isds-311823; and Dutch Parliament rejects ISDS in TTIP: http://www.tweedekamer.nl/kamerstukken/ detail?id=2015Z05256&did=2015D10668 22 European Commission, Press release, “EU Commission asks Member States to terminate their intra-EU bilateral investment treaties”, 18 June 2015, http://europa.eu/rapid/ press-release_IP-15-5198_en.htm 23 The Financial Times has published 40 articles mentioning ISDS between March 2014 and November 2015 http://search.ft.com/ search?queryText=ISDS. In 2014, Alan Beattie, International Economy Editor at the Financial Times, published an article warning that when signing BITs “Governments should be aware they may end up doing more harm than good”. “Investment treaties: EMs have a rethink”, The Financial Times, 16 October 2014, http://blogs.ft.com/ beyond-brics/2014/10/16/investment-treaties-ems-have-a-rethink/ 24 The Economist, “The arbitration game”, 11 October 2014 http://www. economist.com/news/finance-and-economics/21623756-govern ments-are-souring-treaties-protect-foreign-investors-arbitration 25 A search of the term “ISDS in The Guardian results in almost 100 hits of articles mentioning the issue since October 2015. 26 The Washington Post has published at least 15 articles on ISDS in the last 12 months. https://www.washingtonpost.com/ newssearch/?query=ISDS 27 Bloomberg has published a few in depth investigative stories on ISDS besides regular news. See for example: Peter Coy, Brian Parkin, and Andrew Martin, “In Trade Talks, It’s Countries vs. Companies”, Bloomberg, 20 March 2014, http://www.bloomberg.com/bw/arti cles/2014-03-20/in-trade-talks-its-countries-vs-dot-companies ; Andrew Martin, “Philip Morris Leads Plain Packs Battle in Global Trade Arena”, Bloomberg, 22 August 2013 http://www.bloomberg. com/news/articles/2013-08-22/philip-morris-leads-plain-packsbattle-in-global-trade-arena ; Andrew Martin, “Coup d’Etat to Trade Seen in Billionaire Toxic Lead Fight”, Bloomberg, 10 May 2013 http://www.bloomberg.com/news/articles/2013-05-09/ rennert-800-million-toxic-lead-fight-roils-global-trade ; Andrew Martin, “Treaty Disputes Roiled by Bias Charges”, Bloomberg, 10 July 2013, http://www.bloomberg.com/news/articles/2013-07-10/ treaty-disputes-roiled-by-bias-charges 28 Leo Szolnoki, “London: Veeder backs Paulsson’s call to self-regulate”, Global Arbitration Review, 27 March 2014, http://globalarbitrationreview.com/journal/article/32528/ london-veeder-backs-paulssons-call-self-regulate/ 29 Alison Ross, “LONDON: Build on the classic model, urges Brower”, Global Arbitration Review, 21 May 2012 http://globalarbitrationreview.com/article/1031352/ london-build-on-the-classic-model-urges-brower

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30 Alison Ross, “Lord Goldsmith warns of limited time to save ISDS in transatlantic deal”, Global Arbitration Review, 28 May 2015 http:// globalarbitrationreview.com/article/1034488/lord-goldsmithwarns-of-limited-time-to-save-isds-in-transatlantic-deal

52 Alison Ross, “From ICCA to the icecaps: an interview with Francisco Orrego Vicuña”, Global Arbitration Review, Volume
5 - Issue 4, 1 September 2010, http://www.globalarbitrationreview.com/journal/ article/28666/from-icca-icecaps-interview-francisco- orrego-vicuna

31 International Bar Association (IBA) IBA issues a fact-correcting statement on ISDS, 20 April 2015 http://www.ibanet.org/Article/Detail. aspx?ArticleUid=1dff6284-e074-40ea-bf0c-f19949340b2f

53 Adam Green, “Canada ‘very disappointed’ at South Africa’s investment treaty termination”, This is Africa, http://www.thisisafricaonline.com/ Business/Legal-Bulletin/Canada-very-disappointed-at-South-Africas-investment-treaty-termination?ct=true

32 Sebastian Perry, “When GAR met Gary”, Global Arbitration Review, 26 November 2014 http://globalarbitrationreview.com/ article/1033872/when-gar-met-gary 33 Alison Ross, “Schwebel criticises EU act of “appeasement””, Global Arbitration Review, 24 May 2016 http://globalarbitrationreview.com/ article/1036358/schwebel-criticises-eu-act-of-appeasement 34 Alison Ross, “Menon kicks off ICCA Congress with call for regulation”, Global Arbitration Review, 11 June 2012 http://globalarbitrationreview.com/article/1031394/ menon-kicks-off-icca-congress-with-call-for-regulation 35 Alison Ross, “Schwebel criticises EU act of “appeasement””, Global Arbitration Review, 24 May 2016 http://globalarbitrationreview.com/ article/1036358/schwebel-criticises-eu-act-of-appeasement 36 EUROPEAN SERVICES FORUM - ESF, Response to European Commission public online consultation on investor protection in TTIP, July 2014, http://trade.ec.europa.eu/consultations-archive/isds/ index.cfm?id=027768315411019214&type=2 37 EFILA, TASK FORCE PAPER regarding the proposed International Court System (ICS), February 2016, http://efila.org/wp-content/up loads/2016/02/EFILA_TASK_FORCE_on_ICS_proposal_1-2-2016.pdf 38 Gina M. Vetere and Marney Cheek, A Critical Opportunity to Promote Gold Standard Investment Protections, Global policy Watch, June 24, 2014, https://www.globalpolicywatch.com/2014/06/ the-transatlantic-trade-and-investment-partnership-a-criticalopportunity-for-securing-gold-standard-investment-protections/ 39 SCC, The SCC Centennial: Film premiere of The Quiet Triumph, 23 January 2017, http://sccinstitute.com/about-the-scc/news/2017/ the-scc-centennial-film-premiere-of-the-quiet-triumph/ 40 Stockholm Chamber of Commerce, ISDS blog, http://isdsblog.com/ 41 Stephan Schill, Reforming International Investment Law: Institutional Change v. System-Internal Adaptation, EJIL: Talk!, October 30, 2013, https://www.ejiltalk.org/reforming-international-investment-lawinstitutional-change-v-system-internal-adaptation/ 42 in Titi, Catharine, The European Union’s Proposal for an International Investment Court: Significance, Innovations and Challenges Ahead (April 9, 2016). Forthcoming, Transnational Dispute Management, advanced publication on 25 May 2016. Available at SSRN: http://ssrn.com/abstract=2711943 43 Park, W. and Alvarez, G, The New Face of Investment Arbitration: NAFTA Chapter 11, The Yale Journal of International Law, vol. 28, 2003, p. 399. 44 Hanotiau, Bernard, International Arbitration in a Global Economy: The Challenges of the Future, Journal of International Arbitration (Kluwer Law International), vol. 28, issue 2, 2011, p. 89-103. 45 UNCITRAL, Rules on Transparency in Treaty-based Investor-State Arbitration, 1 April 2014, http://www.uncitral.org/uncitral/en/ uncitral_texts/arbitration/2014Transparency.html 46 Alison Ross, “Paulsson revives debate about party-appointed arbitrators”, Global Arbitration Review, 16 March 2017 http://globalarbitrationreview.com/article/1138235/ paulsson-revives-debate-about-party-appointed-arbitrators 47 Sundaresh Menon, International Arbitration: The Coming of a New Age for Asia (and Elsewhere), ICCA Congress 2012, https://lbrcdn.net/cdn/ files/gar/articles/AGs_Opening_Speech_ICCA_Congress_2012.pdf 48 European Commission, Fact sheet Investment Protection and Investor-to-State Dispute Settlement in EU agreements, November 2013, http://trade.ec.europa. eu/doclib/docs/2013/november/tradoc_151916.pdf 49 Brower, C. & Schill, S, Is Arbitration a Threat or a Boon to the Legitimacy of International Investment Law?, Chicago Journal of International Law, 2009, p.p.497. 50 Alison Ross,”The end of “the great compact”? Reisman declares investment law at a crossroads”, Global Arbitration Review, 16 February 2017, http://globalarbitrationreview.com/article/ 1081449/the-end-of-the-great-compact%E2%80%9D-reismandeclares-investment-law-at-a-crossroads 51 UNCTAD Investment division, http://investmentpolicyhub.unctad.org/IIA

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54 European Services Forum, Stakeholders Presentation, 12 March 2014, http://www.esf.be/new/wp-content/uploads/2014/03/TTIPStakeholders-Presentations-Event-12-March-2014-Session-3-ESFshort-version.pdf 55 International Chamber of Commerce Austria, Presentation “Bilateral Investment Treaties and Investor-State Dispute Resolution”, 16 June 2014, https://www.icc-austria.org/fxdata/iccws/prod/media/ files/20140616%20ICC%20Key%20facts%20on%20Bilateral%20 Investment%20Treaties.pdf 56 For an overview of the literature, see: Lauge Skovgaard Poulsen, “The Importance of BITs for Foreign Direct Investment and Political Risk Insurance: Revisiting the Evidence” in: K. Sauvant, ed., Yearbook on International Investment Law & Policy 2009/2010 (New York: Oxford University Press, 2010). http://works.bepress.com/lauge_poulsen/4/ 57 Samuel Morgan, “Positive effects of TTIP tribunals for investment unclear Euractiv, 16 September 2015, http://www.euractiv.com/sections/trade-society/ positive-effects-ttip-tribunals-investment-unclear-317665 58 European Commission, “Survey of the Attitudes of the European Business Community to International Investment Rules”, TN Sofres Consulting on behalf of European Commission DG Trade, 2000 http://trade.ec.europa.eu/doclib/html/111125.htm  and http://trade.ec.europa.eu/doclib/html/111127.htm 59 Jason Yackee, “Do Bilateral Investment Treaties Promote Foreign Direct Investment?”, 2011, 51 Virginia J Int’l Law, p429 http://ssrn.com/abstract=1594887 60 Lauge Skovgaard Poulsen, “The Importance of BITs for Foreign Direct Investment and Political Risk Insurance: Revisiting the Evidence”, Yearbook on International Investment Law and Policy 2009/2010, K. Sauvant, ed., Oxford University Press, 2010, p20. http://ssrn.com/abstract=1685876 61 Ibid. 62 Ibid. 63 Xavier Carim, ”International Investment Agreements and Africa’s Structural Transformation: A Perspective from South Africa”, Investment Policy Brief, Number 4, August 2015, South Centre, http://www.southcentre.int/wp-content/uploads/2015/08/ IPB4_IIAs-and-Africa%E2%80%99s-Structural-TransformationPerspective-from-South-Africa_EN.pdf 64 Copy of findings of Ecuador’s Auditing Commission seen by the authors. 65 Cecilia Olivet, Pietje Vervest, and Luuk Schmitz, “Central and Eastern European countries at the crossroads. Why governments should reject investment arbitration in TTIP”, Transnational Institute, IGO, and Protect the Future, 2015, https://www.tni.org/en/publication/ central-and-eastern-european-countries-crossroads 66 UNCTAD, “Investor-state dispute settlement: an information note on the United States and the European Union”, IIA Issue Notes, No. 2, 2015, http://unctad.org/en/PublicationsLibrary/ webdiaepcb2014d4_en.pdf 
 67 Peter M Robinson, Karsten Dybvad and Urban Bäckström, “The ‘I’ in the TTIP will create a global gold standard”, published in the Financial Times, 10 March 2014, www.uscib.org/docs/ ft_letter_to_the_editor_robinson.pdf 68 International Chamber of commerce UK, “Briefing on investor-state dispute settlement mechanisms in international investment agreements”, February 2014, http://www.esf.be/new/wp-content/ uploads/2014/02/ICC-UK-briefing-ISDS.docx 69 House of Lords, Transcript of Inquiry on Transatlantic Trade and Investment partnership, 27 February 2014, session 19, http://www.parliament.uk/documents/lords-committees/ eu-sub-com-c/TTIP/ucEUC270214ev19.pdf 70 Jonathan Weisman, “Trans-Pacific Partnership Seen as Door for Foreign Suits Against U.S.” New york Times, 25 March 2015, http://www.nytimes.com/2015/03/26/business/trans-pacificpartnership-seen-as-door-for-foreign-suits-against-us.html?_r=0 71 Philip Morris against Australia, “Notice of Arbitration”, 21 November 2011, http://www.italaw.com/sites/default/ files/case-documents/ita0665.pdf

72 High court of Australia, Ruling JT International SA v Commonwealth of Australia [2012] HCA 43, 5 October 2012, www.austlii.edu.au/au/ cases/cth/HCA/2012/43.html 73 http://www.isdscorporateattacks.org/#!services/cs8j 74 http://isds.bilaterals.org/?-isds-labour75 The report “Profiting from Crisis” by Cecilia Olivet and Pia Eberhardt brings evidence on how corporations, backed by lawyers, use international investment agreements to scavenge for profits by suing Europe’s crisis countries. Published in 2013 by Transnational Institute and Corporate Europe Observatory https://www.tni.org/en/ profiting-crisis 76 http://www.isdscorporateattacks.org/#!health/cqb 77 Pia Eberhardt, et.al, “The right to say no. EU-Canada trade agreement threatens fracking bans”, Transnational Institute, The Council of Canadians, Corporate Europe Observatory, 2013, https://www.tni. org/en/publication/the-right-to-say-no 78 Pia Eberhardt, “Polluters’ Paradise. How investor rights in EU trade deals sabotage the fight for energy transition”. Published by Corporate Europe Observatory, AITEC, PowerShift, Transnational Institute and others, “Polluters Paradise”, 2015, https://www.tni.org/ en/publication/polluters-paradise 79 Claire Provost, “Taxes on trial. How trade deals threaten tax justice”. Published by Transnational Insititute and Global Justice Now, 2016, https://www.tni.org/en/publication/taxes-on-trial 80 Manuel Perez-Rocha and Sarah Anderson, “Mining for Profits in International Tribunals – Updated”, IPS, 2013, http://www.ips-dc.org/ mining_for_profits_update2013/ 81 Campaign for Tobacco-Free Kids, “Philip Morris Brands Sàrl, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay”, http://www.tobaccocontrollaws.org/litigation/ decisions/uy-20130702-philip-morris-brands-v.-urugua ; https://www.theguardian.com/global-development/2016/jul/28/ who-really-won-legal-battle-philip-morris-uruguay-cigarette-adverts 82 Public Citizen, “U.S. Pharmaceutical Corporation Uses NAFTA Foreign Investor Privileges Regime to Attack Canada’s Patent Policy, Demand $100 Million for Invalidation of a Patent”, 2013, http://www.citizen. org/eli-lilly-investor-state-factsheet or SumOfUS “Eli Lilly is suing Canadians for $500 million dollars cause it didn’t make enough profit”, 2014 https://actions.sumofus.org/a/eli-lilly 83 Howard Mann, “DOWning NAFTA?”, Investment Treaty News, 3 May 2009, https://www.iisd.org/itn/2009/05/03/downing-nafta/ ; Council of Canadians, “Dow Agrosciences used and abused NAFTA in pesticide spat, says Council of Canadians”, 27 May 2011, http://canadians.org/media/trade/2011/27-May-11.html 84 The company extraction permits were denied on environmental and public health grounds. For more information on this case, see: http://www.counterpunch.org/2015/09/03/for-the-love-of-water-elsalvadors-mining-ban/ and http://www.ips-dc.org/wp-content/up loads/2014/03/Eight-Falsehoods-Final-March-17-2014-WEB.pdf and http://www.theguardian.com/sustainable-business/2015/may/27/ pacific-rim-lawsuit-el-salvador-mine-gold-free-trade and http://ww w.italaw.com/sites/default/files/case-documents/italaw1208.pdf 85 Doe Run failed to comply with an environmental clean-up program continuing to make La Oroya one of the most polluted sites in the world. For more information on this case, see: http://www.bloom berg.com/news/articles/2013-05-09/rennert-800-million-toxic-leadfight-roils-global-trade; http://www.citizen.org/documents/rencomemo-03-12.pdf ; and http://www.foe.org/news/archives/ 2012-04-pay-the-polluter-800-million-trade-deal-injustice-fo 86 Read more about the case: http://www.rosiamontana.org/node/ 1825?language=en ; http://nodirtygold.earthworksaction.org/ voices/rosia_montana#.VuwlyBha5AZ ; and http://www. huffingtonpost.com/adam-cernea-clark/whose-sovereigntygabriel_b_7939596.html 87 Read more about this case: http://www.corporateknights.com/ channels/mining/all-that-glitters-13807960/ ; http://you.leadnow.ca/petitions/costa-rica-said-no-to-this-cana dian-mining-company-3-times-let-s-make-sure-it-listens-this-time; http://miningwatch.ca/blog/2015/7/22/good-riddance-infinito-goldlong-overdue-farewell-costa-rica 88 Janet M. Eaton, “Digby Neck Quarry Bilcon Case, Tribunal Decision and Dissent”, 11 May 2015, http://www.sierraclub.ca/sites/sierraclub.ca/ files/JANET201505.pdf 89 Read more about this case at: http://www.citizen.org/documents/ GlamisBackgrounderFINAL.pdf; https://www.iisd.org/itn/2009/ 07/14/glamis-gold-ltd-v-united-states-of-america-tribunal-sets-ahigh-bar-for-establishing-breach-of-fair-and-equitable-treatmentunder-nafta/

90 https://www.tni.org/en/publication/mongolias-experience-withinvestment-treaties-and-arbitration-cases 91 IAPP, “Forestic v South Africa (Italy–South Africa BIT)”, February 2011, http://iiapp.org/media/uploads/foresti_v_south_africa.rev.pdf 92 Corporate Europe Observatory, Council of Canadians, and Transnational Institute, “The right to say no: EU-Canada trade agreement threatens fracking bans”, 6 May 2013, http:// corporateeurope.org/climate-and-energy/2013/05/right-say-noeu-canada-trade-agreement-threatens-fracking-bans; IA Reporter, “In new pleading, Lone Pine questions ‘environmental’ bona fides of decision to cancel fracking exploration permit, and offers a DCF valuation of its losses”, 7 May 2015, http://www.iareporter.com/ articles/in-new-pleading-lone-pine-questions-environmentalbona-fides-of-decision-to-cancel-fracking-exploration-permit-andoffers-a-dcf-valuation-of-its-losses/ 93 PowerShift, Transnational Institute, and SOMO, “The German Nuclear Phase-Out Put to the Test in International Investment Arbitration? Background to the new dispute Vattenfall v. Germany (II)”, 2013, http://power-shift.de/wordpress/wp-content/uploads/2012/06/ TNI-PowerShift-Somo-Paper-Vattenfall-ICSID-case-updated-2013. pdf, p.3. 94 IISD, “The State of Play in Vattenfall v. Germany II: Leaving the German public in the dark”, 2014, http://www.iisd.org/sites/default/ files/publications/state-of-play-vattenfall-vs-germany-II-leavinggerman-public-dark-en.pdf. 95 Ben Beachy, “The Corporation Behind Keystone XL Just Laid Bare the TPP’s Threats to Our Climate”, Huffington Post, 7 January 2016, http://www.huffingtonpost.com/ben-beachy/the-corporationbehind-ke_b_8931802.html; Lisa Hymas, “The 7 things you need to know now about the Keystone XL pipeline”, Grist, 6 November 2015, http://grist.org/climate-energy/the-7-things-you- need-to-knownow-about-the-keystone-xl-pipeline/ 96 Vodafone vs India (2014), UNCTAD Investment Policy Hub, Investment Dispute Settlement database, http://investmentpolicy hub.unctad.org/ISDS/Details/581 97 Micula vs Romania (2005), UNCTAD Investment Policy Hub, Investment Dispute Settlement database, http://investmentpolicy hub.unctad.org/ISDS/Details/180 98 Cargill vs Mexico (2005), UNCTAD Investment Policy Hub, Investment Dispute Settlement database, http://investmentpolicyhub.unctad. org/ISDS/Details/204 , and Archer Daniels Midland vs Mexico (2004), http://investmentpolicyhub.unctad.org/ISDS/Details/167 , and Corn Products vs Mexico (2004), http://investmentpolicyhub. unctad.org/ISDS/Details/166 99 Jesse Riseborough, “Tullow Oil to Settle Uganda Tax Dispute for $250 Million”, Bloomberg, 22 June 2015, http://www.bloomberg.com/news/articles/2015-06-22/ tullow-oil-to-settle-uganda-tax-dispute-for-250-million 100 Gus Van Harten, “Beware the discretionary choices of arbitrators”, published in Columbia FDI Perspectives, No 110, 9 December 2013, http://ccsi.columbia.edu/files/2013/10/No_110_-_Van_Harten_-_ FINAL.pdf 101 International Bar Association, “COP21: Climate Change Related Disputes: A Role for International Arbitration and ADR”, 7 December 2015, http://www.debevoise.com/~/media/files/insights/ news/2015/david%20w%20rivkin%20speech%20climate_change_ arbitration%20%282%29.pdf 102 Government of Canada, Press release, “Canada Ratifies Important International Treaty on Investment Disputes “, 1 November 2013, http://news.gc.ca/web/article-en.do?nid=786299 103 BusinessEurope, Position paper, “Investor-State Dispute Settlement – A necessary mechanism to ensure investor protection”, 2 May 2014, https://www.businesseurope.eu/sites/buseur/files/media/ imported/2014-00488-E.pdf 104 Stockholm Chamber of Commerce, “ISDS Blog”, http://isdsblog. com/isds-qa/#sthash.rlA8VSGq.dpuf 105 European Federation for Investment Law and Arbitration (EFILA), “A response to the criticism against ISDS”, May 2015, http://efila. org/wp-content/uploads/2015/05/EFILA_in_response_to_thecriticism_of_ISDS_final_draft.pdf 106 Gus Van Harten, “Arbitrator Behaviour in Asymmetrical Adjudication: An Empirical Study of Investment Treaty Arbitration”, Osgoode Hall Law Journal, Forthcoming, 2012, http://ssrn.com/ abstract=2149207 107 http://www.gresham.ac.uk/lectures-and-events/the-privatisationof-law-has-a-world-court-finally-been-created-by-modern

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108 Gus Van Harten, “Arbitrator Behaviour in Asymmetrical Adjudication: An Empirical Study of Investment Treaty Arbitration”, Osgoode Hall Law Journal, Forthcoming, 2012, http://ssrn.com/abstract=2149207 and Gus Van Harten, “Arbitrator Behaviour in Asymmetrical Adjudication (Part Two): An Examination of Hypotheses of Bias in Investment Treaty Arbitration”, Osgoode Legal Studies Research Paper No. 31/2016, 25 January 25 2016. Available at SSRN: http://ssrn.com/abstract=2721920 109 Arbitration scorecard covers international arbitrations that were active in 2013 and 2014 in which at least $1 billion was in controversy. http://www.international.law.com/ id=1202731078679/2015-Arbitration-Scorecard-Decidingthe-Worlds-Biggest-Disputes#ixzz45VlkXG6Y 110 Pia Eberhardt and Cecilia Olivet, “Profiting from injustice: How law firms, arbitrators and financiers are fuelling an investment arbitration boom”, Corporate Europe Observatory and Transnational Institute, 2012, http://www.tni.org/briefing/profiting-injustice 111 Ibid. 112 Alison Ross, “Brigitte in Brazil”, Global Arbitration Review, 5 July 2010, http://www.globalarbitrationreview.com/news/ article/28494/brigitte-brazil 113 European Commission, Factsheet “Investment protection and investor-to-state dispute settlement in EU agreements”, November 2013, http://trade.ec.europa.eu/doclib/docs/2013/november/ tradoc_151916.pdf 114 European Commission, Factsheet “Investment Protection and Investor-to-State Dispute Settlement (ISDS) in EU agreements”, March 2014, http://trade.ec.europa.eu/doclib/docs/2014/ march/tradoc_152290.pdf 115 United States Trade Representative, “Factsheet: Investor-State Dispute Settlement”, consulted 7th December 2016, https:// ustr.gov/about-us/policy-offices/press-office/fact-sheets/2015/ march/investor-state-dispute-settlement-isds 116 Hendrike Kuehl, “ISDS provides necessary protection, not a new avenue for corporate profit”, The Atlantic Community, 10 October 2014, http://www.atlantic-community.org/-/isds-providesnecessary-protection-not-a-new-avenue-to-corporate-profit 117 Thomas Schultz and Cedric G. Dupont, “Investment Arbitration: Promoting the Rule of Law or Over-Empowering Investors? A Quantitative Empirical Study (February 20, 2014)”. European Journal of International Law, 2014, Forthcoming; King’s College London Law School Research Paper No. 2014-16. http://ssrn.com/abstract=2399179 118 Letter in support of the ISDS system, “An open letter about investor-state dispute settlement”, Academics from the Fortier Chair in international Arbitration and international commercial law, McGill University, April 2015, https://www.mcgill.ca/fortier-chair/ isds-open-letter 119 European Federation for Investment Law and Arbitration (EFILA), “A response to the criticism against ISDS”, May 2015, http://efila.org/wp-content/uploads/2015/05/ EFILA_in_response_to_the-criticism_of_ISDS_final_draft.pdf 120 Global Investment Protection, “Is the end near for classic Investment protection?”, 5 November 205, http://www.globalinvestmentprotection.com/index.php/ ttip-is-the-end-near-for-classic-investment-protection/ 121 Rechtsanwälte Günther, Briefing note prepared for Greenpeace, “The Coal-fired Power Plant Hamburg-Moorburg, ICSID proceedings by Vattenfall under the Energy Charter Treaty and the result for environmental standards”, 2010, https://www.greenpeace.de/sites/ www.greenpeace.de/files/publications/icsid_case_regarding_the_ vattenfall_coal-fired_power_plant_hamburg-moorburg.pdf

128 Michael D. Goldhaber, “Deciding the world’s biggest disputes”, The American Lawyer, 2015 http://www.curtis.com/siteFiles/ News/2015-06-30%20American%20Lawyer%20-%202015%20 Arbitration%20Scorecard.pdf 129 Kyla Tienhaara, “Regulatory Chill and the Threat of Arbitration: A View from Political Science”, 28 October 28 2010, published in Evolution in Investment Treaty Law and Aribtration, Chester Brown, Kate Miles, eds., Cambridge University Press, 2011, http://ssrn.com/abstract=2065706 130 Willima Greider, “The Right and US Trade Law: Invalidating the 20th Century”, The Nation, 17 November 2001, http://www.thenation.com/article/ right-and-us-trade-law-invalidating-20th-century/?page=0,5 131 David Elward, “Uruguay to relax tobacco laws to combat Philip Morris claim”, Global Arbitration Review, 28 July 2010, http://globalarbitrationreview.com/news/article/28610/ uruguay-relax-tobacco-laws-combat-philip-morris-claim/ 132 Tariana Turia, “Government moves forward with plain packaging of tobacco products”, 19 February 2013, http://www.beehive.govt.nz/release/governmentmoves-forward-plain-packaging-tobacco-products 133 Chris Hamby, “The Billion Dollar Ultimatum”, BuzzFeed News, 30 August 2016, https://www.buzzfeed.com/chrishamby/ the-billion-dollar-ultimatum 134 Nathalie Bernasconi-Osterwalder & Rhea Tamara Hoffmann, “Nuclear Phase-Out put to the test - Background to the new dispute Vattenfall v. Germany (II)“, published by Transnational Institute, Powershift, and SOMO, 2013, https://www.tni.org/en/briefing/ nuclear-phase-out-put-test 135 Public Citizen, “Ethyl Corporation v.s. Government of Canada: Now Investors Can Use NAFTA to Challenge Environmental Safeguards”, Briefing on Ethyl case, http://www.citizen.org/trade/article_redirect. cfm?ID=6221 136 Transnational Institute, Briefing, “Netherlands-Indonesia BIT rolls back implementation of new Indonesian Mining Law”, 12 November 2014, https://www.tni.org/en/briefing/netherlands-indonesiabit-rolls-back-implementation-new-indonesian-mining-law 137 Corporate Europe Observatory, Transnational Institute, “Profiting from Injustice”, Chapter 3: “Legal vultures: Law firms driving demand for investment arbitration”, 2012, http://corporateeurope.org/ trade/2012/11/chapter-3-legal-vultures-law-firms-driving-demandinvestment-arbitration 138 Kip Teen, “Landmark Canada/EU trade agreement could have major implications for miners”, Mineweb, 23 October 2013, http://www. mineweb.com/archive/landmark-canadaeu-trade-agreementcould-have-major-implications-for-miners/ 139 Global Arbitration Review, “Dos and don’ts for counsel”, 1 February 2006, http://globalarbitrationreview.com/journal/article/18270/ dos-donts-counsel/ 140 Letter in support of the ISDS system, “An open letter about investor-state dispute settlement”, Academics from the Fortier Chair in international Arbitration and international commercial law, McGill University, April 2015, https://www.mcgill.ca/fortier-chair/ isds-open-letter 141 BusinessEurope, Position paper, “Investor-State Dispute Settlement – A necessary mechanism to ensure investor protection”, 2 May 2014, https://www.businesseurope.eu/sites/buseur/files/media/ imported/2014-00488-E.pdf

122 UNCTAD, “Investor-State Disputes: Prevention and Alternatives to Arbitration”, New York and Geneva, 2010, p16

142 “USTR Memo to Reporters on ISDS”, published on 11 March 2015, http://infojustice.org/archives/34117

123 OECD, “Investor-State Dispute Settlement. Public Consultation: 16 May – 23 July 2012”, 2012, p19

143 Rudolf Dolzer, “The Impact of International Investment Treaties on Domestic Administrative Law”, New York University Journal of International Law and Policy 37, 2005, no. 4: 972

124 House of Representatives Philippines, “Minutes from the Committee on Transportation”, 2011, http://www.congress.gov. ph/download/commdaily/CDB%20Vol%201%20No.%2089%20 %2803.15.11%29.pdf

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127 Stockholm Chamber of Commerce, “A guide to ISDS: The facts”, http://sccinstitute.se/media/49781/isds_infographics_online.pdf

125 UNCTAD, World Investment Report, 2015, http://unctad.org/en/pag es/PublicationWebflyer.aspx?publicationid=1245; See also Howard Mann, “ISDS: Who Wins More, Investors or States?”, IISD, 2015, http://www.iisd.org/itn/wp-content/uploads/2015/06/itn-breakingnews-june-2015-isds-who-wins-more-investors-or-state.pdf

144 Mavluda Sattorova, “The Impact of Investment Treaty Law on Host State Behavior: Some Doctrinal, Empirical and Interdisciplinary Insights”, 2014, In: The Role of the State in Investor-State Arbitration. Brill Nijhoff, pp. 162-186; Tom Ginsburg, “International Substitutes for Domestic Institutions: Bilateral Investment Treaties and Governance”, International Review of Law and Economics, Vol. 25, 2005; U Illinois Law & Economics Research Paper No. LE06-027. http://ssrn.com/abstract=916351

126 BusinessEurope, Position paper, “Investor-State Dispute Settlement – A necessary mechanism to ensure investor protection”, 2 May 2014, https://www.businesseurope.eu/sites/buseur/files/media/ imported/2014-00488-E.pdf

145 Mavluda Sattorova, “The Impact of Investment Treaty Law on Host State Behavior: Some Doctrinal, Empirical and Interdisciplinary Insights”, 2014, In: The Role of the State in Investor-State Arbitration. Brill Nijhoff, pp. 162-186.

146 Gus Van Harten, “Investment Treaty Arbitration, Procedural Fairness, and the Rule of Law”. International Investment Law ans Comparative Public Law, Chapter 20, Schill, ed., Oxford University Press, 2010, Forthcoming. Available at SSRN: http://ssrn.com/abstract=1658523 147 Letter of concern on ISDS by prominent academics, published in The Washington Post, 30 April 2015, https://www.washingtonpost. com/r/2010-2019/WashingtonPost/2015/04/30/Editorial-Opinion/ Graphics/oppose_ISDS_Letter.pdf 148 Lise Johnson and Lisa Sachs, “The outsized costs of ISDS”, published in Academy of International Business – Insights, Volume 16, issue 1, February 2016, http://ccsi.columbia.edu/files/2016/02/AIBInsights-Vol.-16-Issue-1-The-outsized-costs-of-ISDS-JohnsonSachs-Feb-2016.pdf, p12 149 Jason Yackee, “Let the Domestic Rule of Law Prevail”, CATO Unbound, 29 May 2015, http://www.cato-unbound.org/2015/05/29/ jason-yackee/let-domestic-rule-law-prevail 150 Thomas Schultz, Cedric G. Dupont , “Investment Arbitration: Promoting the Rule of Law or Over-Empowering Investors? A Quantitative Empirical Study”, European Journal of International Law, 2014, Forthcoming; King’s College London Law School Research Paper No. 2014-16. http://ssrn.com/abstract=2399179 151 Lise Johnson and Lisa Sachs, “The outsized costs of ISDS”, published in Academy of International Business – Insights, Volume 16, issue 1, February 2016, http://ccsi.columbia.edu/ files/2016/02/AIB-Insights-Vol.-16-Issue-1-The-outsized-costsof-ISDS-Johnson-Sachs-Feb-2016.pdf, p2 152 Tom Ginsburg, “International Substitutes for Domestic Institutions: Bilateral Investment Treaties and Governance”. International Review of Law and Economics, Vol. 25; U Illinois Law & Economics Research Paper No. LE06-027, 2005, http://ssrn.com/abstract=916351 153 Mavluda Sattorova, “The Impact of Investment Treaty Law on Host State Behavior: Some Doctrinal, Empirical and Interdisciplinary Insights”, 2014, In: The Role of the State in Investor-State Arbitration. Brill Nijhoff, pp. 162-186 154 Stockholm Chamber of Commerce, Facts about ISDS, http://isdsblog.com/isds-qa/#sthash.rlA8VSGq.dpuf 155 Stockholm Chamber of Commerce, A guide to ISDS. The facts – Infographics, http://sccinstitute.se/media/49781/ isds_infographics_online.pdf

news/2015/david%20w%20rivkin%20speech%20climate_change_ arbitration%20%282%29.pdf 165 Corporate Europe Observatory, AITEC, PowerShift, Transnational Institute and others, “Polluters Paradise”, 2015, https://corporate europe.org/sites/default/files/pollutersparadise.pdf ; Transnational Institute ,“Signing Away Sovereignty”, 2016, https://www.tni.org/en/publication/signing-away-sovereignty; IISD, “TTIP and Climate Change: Low economic benefits, real climate risks”, 2015, https://www.iisd.org/itn/2015/12/01/ ttip-and-climate-change-low-economic-benefits-real-climate-risks/ 166 According to ICSID, 213 cases were pending as of 2 November 2015. 57 of them related to the oil, gas and mining sector, and 48 related to electric power and other energy. See https://icsid.worldbank.org/ apps/ICSIDWEB/cases/Pages/AdvancedSearch.aspx 167 Friends of the Earth Europe, “The Hidden Costs of EU trade deals”, 2014, http://www.foeeurope.org/ how-taxpayers-footing-bill-europes-trade-deals-041214 168 The company extraction permits were denied on environmental and public health grounds. For more information on this case, see: http://www.counterpunch.org/2015/09/03/for-the-love-of-waterel-salvadors-mining-ban/ and http://www.ips-dc.org/wp-content/ uploads/2014/03/Eight-Falsehoods-Final-March-17-2014-WEB. pdf and http://www.theguardian.com/sustainable-business/2015/ may/27/pacific-rim-lawsuit-el-salvador-mine-gold-free-trade and http://www.italaw.com/sites/default/files/case-documents/ italaw1208.pdf 169 Doe Run failed to comply with an environmental clean-up program continuing to make La Oroya one of the most polluted sites in the world. For more information on this case, see: http://www. bloomberg.com/news/articles/2013-05-09/rennert-800-milliontoxic-lead-fight-roils-global-trade; http://www.citizen.org/ documents/renco-memo-03-12.pdf; and http://www.foe.org/ news/archives/2012-04-pay-the-polluter-800-million-trade-dealinjustice-fo 170 Read more about the case: http://www.rosiamontana.org/ node/1825?language=en; http://nodirtygold.earthworksaction. org/voices/rosia_montana#.VuwlyBha5AZ; and http://www. huffingtonpost.com/adam-cernea-clark/whose-sovereigntygabriel_b_7939596.html

157 OECD, Investor-State Dispute Settlement, Public Consultation: 16 May – 23 July 2012, p19 http://www.oecd.org/daf/inv/ investment-policy/WP-2012_3.pdf

171 Read more about this case: http://www.corporate knights.com/channels/mining/all-that-glitters-13807960/ ; http://you.leadnow.ca/petitions/costa-rica-said-no-to-thiscanadian-mining-company-3-times-let-s-make-sure-itlistens-this-time ; http://miningwatch.ca/blog/2015/7/22/ good-riddance-infinito-gold-long-overdue-farewell-costa-rica

158 Daniel Tost, “SMEs want a TTIP rethink”, Euractiv, 25 November 2015, http://www.euractiv.com/section/trade-society/interview/smeswant-a-ttip-rethink/ ; Gottfried Härle, “Free Trade: Why do SMEs fear TTIP?”, published by the German Federal Association of Green Business, 25 November 2015, http://www.unternehmens gruen.org/en/blog/2015/11/25/why-does-smes-fear-ttip/

172 PowerShift, Transnational Institute, and SOMO, “The German Nuclear Phase-Out Put to the Test in International Investment Arbitration? Background to the new dispute Vattenfall v. Germany (II)”, 2013, http://power-shift.de/wordpress/wp-content/uploads/2012/06/ TNI-PowerShift-Somo-Paper-Vattenfall-ICSID-case-updated-2013. pdf, p3

159 Gus Van Harten, Pavel Malysheuski, “Who Has Benefited Financially from Investment Treaty Arbitration? An Evaluation of the Size and Wealth of Claimants”, 11 January 2011, Osgoode Legal Studies Research Paper No. 14/2016, http://papers.ssrn.com/sol3/ papers.cfm?abstract_id=2713876

173 IISD, “The State of Play in Vattenfall v. Germany II: Leaving the German public in the dark”, 2014 http://www.iisd.org/sites/default/ files/publications/state-of-play-vattenfall-vs-germany-II-leavinggerman-public-dark-en.pdf.

156 BusinessEurope, https://youtu.be/DdfoIY3wEdE

160 Bundesverband Mittleständische Witschaft, “Survey: German companies call for changes to free trade agreement Ohoven: “TTIP must not be allowed to benefit big business only”, Press release in English: http://www.bvmw.de/nc/homeseiten/news/ artikel/umfrage-deutsche-unternehmer-fordern-aenderungenbeim-freihandelsabkommen.html Full results of the survey (in German only): http://www.bvmw.de/fileadmin/download/ Bund/Umfragen/2016-03-10_BVMW_Mitgliederbefragung_ Praesentation_Kernergebnisse.pdf 161 Bundesverband Mittleständische Witschaft, Position paper on the EU Commission public consultation on ISDS in TTIP (in German), http://www.bvmw.de/fileadmin/download/Downloads_allg._ Dokumente/politik/Positionspapier_TTIP.pdf 162 Arbitration Institute of the Stockholm Chamber of Commerce, “How the investment protection regime can contribute to a better environment”, 29th May 2015, http://isdsblog.com/wp-content/ uploads/sites/2/2015/08/Magnusson-Warsaw-29-May-2015.pdf 163 Global Investment Protection, “How investment arbitration can help protect the climate”, 2nd December 2015, http://www.globalinvestmentprotection.com/index.php/ how-investment-arbitration-can-help-to-protect-the-climate/ 164 International Bar Association, “COP21: Climate Change Related Disputes: A Role for International Arbitration and ADR”, 7 December 2015, http://www.debevoise.com/~/media/files/insights/

174 Corporate Europe Observatory, Council of Canadians, and Transnational Institute, “The right to say no: EU-Canada trade agreement threatens fracking bans”, 6 May 2013, http:// corporateeurope.org/climate-and-energy/2013/05/right-say-noeu-canada-trade-agreement-threatens-fracking-bans; IA Reporter, “In new pleading, Lone Pine questions ‘environmental’ bona fides of decision to cancel fracking exploration permit, and offers a DCF valuation of its losses”, 7 May 2015, http://www.iareporter.com/ articles/in-new-pleading-lone-pine-questions-environmentalbona-fides-of-decision-to-cancel-fracking-exploration-permit-andoffers-a-dcf-valuation-of-its-losses/ 175 IISD, Methanex v. USA http://www.iisd.org/project/methanex-v-usa 176 Public Citizen, Ethyl Briefing Paper http://www.citizen.org/trade/ article_redirect.cfm?ID=6221 177 Gus Van Harten, “An ISDS Carve-Out to Support Action on Climate Change”, Osgoode Legal Studies Research Paper No. 38, 2015, https://ssrn.com/abstract=2663504 178 European Parliament, “Towards a new international climate agreement in Paris”, Resolution 2015/2112(INI), 2015, http://www.europarl.europa.eu/sides/getDoc.do?pubRef= -//EP//NONSGML+TA+P8-TA-2015-0359+0+DOC+PDF+V0//EN 179 Douglas Thomson, “Indonesia cancels Dutch investment treaty”, Global Arbitration Review, 21 March 2014, http://globalarbitrationreview.com/article/1033263/ indonesia-cancels-dutch-investment-treaty

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180 European Commission, “Factsheet on investor-state dispute settlement”, Directorate general for Trade, 3 October 2013, http:// trade.ec.europa.eu/doclib/docs/2013/october/tradoc_151791.pdf 181 Linda Dempsey, “The Economic Development and Jobs Growth Tool the Anti-Trade Lobby Loves to Hate; Why ISDS Deserves More than a Little Respect”, US National Association of Manufacturers, 25 March 2015, http://www.shopfloor.org/2015/03/the-economicdevelopment-and-jobs-growth-tool-the-anti-trade-lobby-lovesto-hate-why-isds-deserves-more-than-a-little-respect/33509/ 182 Argentina-UK BIT 183 Denmark-Venezuela BIT 184 S.L. Reiter and H. Kevin Steensma, Human Development and Foreign Direct Investment in Developing Countries: The Influence of FDI Policy and Corruption, World Development Vol. 38, No. 12, 2010, pp. 1678–1691; M. Vander Stichele and M. van Dijk, “Is Foreign Investment Good for Development?” A Literature Review, SOMO, 2008, http://www.somo.nl/publications-en/ Publication_2478; http://www.ase.tufts.edu/gdae/Pubs/rp/ FDIWorkingGroupReportMay08_ES.pdf; Kevin P. Gallagher and Daniel Chudnovsky, “Rethinking Foreign Investment for Sustainable Development: Lessons from Latin America”, Anthem Press, 2009, http://ase.tufts.edu/gdae/WorkingGroup_FDI.htm 185 UNCTAD, “World Investment Report 2010”, 2010, http://unctad. org/en/Docs/wir2010_en.pdf ; UNCTAD “World Investment Report 2012”, 2012, http://unctad.org/en/PublicationsLibrary/wir2012_ embargoed_en.pdf ; UNCTAD, “World Investment Report 2014. Investing in the SDGs: an action plan”, 2014, http://unctad.org/en/ pages/PublicationWebflyer.aspx?publicationid=937 186 UNCTAD, “World Investment Report 2012”, 2012, http://unctad.org/ en/PublicationsLibrary/wir2012_embargoed_en.pdf, p100 187 UNCTAD, “World Investment Report 2012”, 2012, p79 http://unctad. org/en/PublicationsLibrary/wir2012_embargoed_en.pdf 188 Ha-Joon Chang, “Regulation of foreign investment in historical perspective,” The European Journal of Development Research, 16(3), 2004, pp. 687-715 189 Performance requirements are stipulations, imposed on investors, requiring them to meet certain specified goals with respect to their operations in the host country. Examples include requirements to transfer technology or production processes, export requirements, requirements to establish a joint venture with domestic participation. 190 Suzy H. Nikièma, Performance Requirements in Investment Treaties: Best Practices Series, IISD, December 2014 http://www.iisd.org/ sites/default/files/publications/best-practices-performancerequirements-investment-treaties-en.pdf 191 Kevin P. Gallagher, “Policy Space to Prevent and Mitigate Financial Crises in Trade and Investment Agreements”, G-24 Discussion Paper Series, No.58, United Nations, 2010, http://unctad.org/en/Docs/ gdsmdpg2420101_en.pdf 192 Even the International Monetary Fund has recognized the need for capital controls and that those obligations present in IIAs can reduce the policy space for nations seeking to apply these measures. See Aldo Caliari, “IMF: Trade obligations may work against financial stability goals”. Centre of Concern, December 2012. 193 Ha-Joon Chang, “Kicking Away the Ladder: Development Strategy in Historical Perspective”, Anthem Press, 2002 194 Alfred-Maurice de Zayas, Statement at the 70th session of the General Assembly, 26 October 2015 http:// www.ohchr.org/SP/NewsEvents/Pages/DisplayNews. aspx?NewsID=16745&LangID=S#sthash.ZPF7Ivug.dpuf 195 “EU warns against South Africa’s intention to terminate BIT”, in http://www.globaltimes.cn/content/824199.shtml 196 Mohammad Mossallam, “Process matters - South Africas experience exiting its BITs”, University of Oxford, GEG Working Paper 2015/97, 2015; in http://www.globaleconomicgovernance.org/sites/geg/ files/ 197 Douglas Thomson, “Indonesia cancels Dutch investment treaty”, Global Arbitration Review, 21 March 2014, http://globalarbitrationreview.com/article/1033263/ indonesia-cancels-dutch-investment-treaty 198 Ibid. 199 Subhayan Chakraborty ,“EU asks India not to scrap bilateral investment treaties with member states”, originally published in Business Standard, 28 November 2016, http://www.bilaterals. org/?eu-asks-india-not-to-scrap

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200 Stephanie Schoenwald, “South Africa – still room for more FDI”, KFW Economic Research – Emerging Markets Spotlight, no 6,

18 May 2015, https://www.kfw.de/PDF/Download-Center/ Konzernthemen/Research/PDF-Dokumente-Schwellenl %C3%A4nder-Check/SC-englische-PDF/SC-Ausgabe-6-S %C3%BCdafrika-Mai-2015_EN.pdf 201 Carin Smith, “German Investors bet on positives in SA”, Fin24, 19 February 2016, http://www.fin24.com/Economy/ german-investors-bet-on-positives-in-sa-20160219 202 Oluwa Buyaso Sotunde, “Germany to increase investment in Africa”, Ventures Africa, 30 April 2013, http://venturesafrica.com/ guido-westerwelle-investing-in-africa-business-in-africa/ 203 Stephanie Schoenwald, “South Africa – still room for more FDI”, KFW Economic Research – Emerging Markets Spotlight, no 6, 18 May 2015, https://www.kfw.de/PDF/DownloadCenter/Konzernthemen/Research/PDF-DokumenteSchwellenl%C3%A4nder-Check/SC-englische-PDF/ SC-Ausgabe-6-S%C3%BCdafrika-Mai-2015_EN.pdf 204 “South Africa and EU lock horns again in citrus fruit disease dispute”, originally published in Bloomberg, 13 April 2013, http://www.bdlive.co.za/business/trade/2012/09/23/ south-africa-european-union-lock-horns 205 Abdulkadir Jailani, “Indonesia’s Perspective on Review of International Investment Agreements”, in Eds. Singh and Ilge Rethinking Bilateral Investment Treaties: Critical Issues and Policy Choices, Both Ends, Madhyam, SOMO, 2016, http://www.madhyam.org.in/wp-content/uploads/2016/ 03/Rethinking-BIT-Book-PDF-15-March-2016.pdf 206 Franky Sibarani, “Foreign Direct Investment in Indonesia Hit Record High in 2014”, Indonesia Investment, 29 January 2015, http://www.indonesia-investments.com/news/news-columns/ foreign-direct-investment-in-indonesia-hit-record-high-in-2014/ item5262 207 Franky Sibarani, “Foreign Direct Investment into Indonesia Grows 19.2% in 2015”, Indonesia Investment, 21 January 2015, http://www.indonesia-investments.com/news/todaysheadlines/foreign-direct-investment-into-indonesiagrows-19.2-in-2015/item6408 208 Ibid. 209 For detailed analysis of the Investment Court System proposal, see “ISDS: Courting foreign investors” http://www.s2bnetwork. org/isds-courting-foreign-investors/ ; “The Zombie ISDS” https://www.tni.org/en/publication/the-zombie-isds ; or “Investment Court System put to the test” https://www.tni.org/ en/publication/investment-court-system-put-to-the-test 210 http://ec.europa.eu/commission/2014-2019/malmstrom/blog/ proposing-investment-court-system_en 211 Council of the European Union, “Joint Interpretative Instrument on the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and its Member States”, 27 October 2016 http://data.consilium.europa.eu/doc/ document/ST-13541-2016-INIT/en/pdf 212 European Commission, Press Release, “Commission proposes new Investment Court System for TTIP and other EU trade and investment negotiations”, 16 September 2015, http://trade.ec.europa.eu/doclib/press/index.cfm?id=1364 213 Hendrik Kafsack, “Bessere Schiedsgerichte”, Frankfurter Allgemeine Zeitung, 16 September 2015, http://www.faz.net/ aktuell/wirtschaft/ttip-und-freihandel/kommentar-ttip-bessereschiedsgerichte-13806727.html (translation: Pia Eberhardt) 214 Corporate Europe Observatory, Transnational Institute, Friends of the Earth Europe, German NGO Forum on Environment and Development, and Canadian Center on Policy Alternatives, “Investment Court System put to the test”, 2016, http://www.foeeurope.org/sites/default/files/ eu-us_trade_deal/2016/icstest_web.pdf 215 FTR Holding SA, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, “Request for Arbitration”, 19 February 2010, para 79. http://www.italaw.com/sites/ default/files/case-documents/ita0343.pdf 216 TransCanada Corporation & TransCanada PipeLines Limited, “Notice of Intent to Submit a Claim to Arbitration under Chapter 11 of the North American Free Trade Agreement”, 6 January 2016, paras 50-51 https://assets.documentcloud. org/documents/2676478/TransCanada-Notice-of-Intent-6Jan-2016.pdf, 217 Lone Pine Resources Inc, “Claimant’s memorial”, 10 April 2015, http://www.international.gc.ca/trade-agreements-accords-com merciaux/assets/pdfs/disp-diff/lone-04.pdf (p130; p132; p142)

218 Vattenfall AB, Vattenfall Europe AG and Vattenfall Europe Generation AG & Co. KG, “Request for Arbitration”, Chapter 3 (i), 30 March 2009, http://www.italaw.com/sites/default/files/ case-documents/ita0889.pdf

236 European Commission, “Transatlantic Trade and Investment Partnership. Trade in services, investment and e-commerce. Chapter II – Investment”, 12 November 2015, http://trade.ec.europa.eu/ doclib/docs/2015/november/tradoc_153955.pdf

219 “The Tribunal finds that the conduct of the joint review was arbitrary. The JRP effectively created, without legal authority or fair notice to Bilcon, a new standard of assessment rather than fully carrying out the mandate defined by the applicable law.” Clayton/Bilcon v. Government of Canada. “Award on Jurisdiction and Liability.” 17 March 17 2015, Para 591.

237 Peter H. Chase, “TTIP, Investor–State Dispute Settlement and the Rule of Law”, originally published in European View, 2 December 2015, https://www.uschamber.com/issue-brief/ ttip-investor-state-dispute-settlement-and-the-rule-law

220 FTR Holding SA, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, “Request for Arbitration”, 19 February 2010, para 84. http://www.italaw.com/sites/ default/files/case-documents/ita0343.pdf 221 TransCanada Corporation & TransCanada PipeLines Limited, “Notice of Intent to Submit a Claim to Arbitration under Chapter 11 of the North American Free Trade Agreement”, 6 January 2016, paras 10, 2 https://assets.documentcloud.org/documents/2676478/ TransCanada-Notice-of-Intent-6-Jan-2016.pdf, 222 Clayton/Bilcon v. Government of Canada, “Award on Jurisdiction and Liability”, 17 March 2015 223 FTR Holding SA, Philip Morris Products S.A. and Abal Hermanos S.A. v. Oriental Republic of Uruguay, Request for Arbitration, 19 February 2010, paras 4 and 81. http://www.italaw.com/sites/default/files/ case-documents/ita0343.pdf 224 TransCanada Corporation & TransCanada Pipe Lines Limited, “Notice of Intent to Submit a Claim to Arbitration under Chapter 11 of the North American Free Trade Agreement”, 6 January 2016, para 1 https://assets.documentcloud.org/documents/2676478/ TransCanada-Notice-of-Intent-6-Jan-2016.pdf 225 Lone Pine Resources Inc, “Notice of Arbitration under the Arbitration rules of the United Nations Commission on the International Trade Law and Chapter Eleven of the North American Free Trade Agreement”, 6 September 2013, p16 http://www.italaw.com/sites/ default/files/case-documents/italaw1156.pdf 226 Vattenfall AB, Vattenfall Europe AG and Vattenfall Europe Generation AG & Co. KG, Request for Arbitration, Chapter 3(i), 30 March 2009, http://www.italaw.com/sites/default/files/case-documents/ ita0889.pdf 227 European Commission, “Reading Guide to the Draft text on Investment Protection and Investment Court System in the Transatlantic Trade and Investment Partnership (TTIP)”, 16 September 2015, http://trade.ec.europa.eu/doclib/ press/index.cfm?id=1365 228 Council of the European Union, “Joint Interpretative Instrument on the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and its Member States”, 27 October 2016, http://data.consilium.europa.eu/doc/document/ ST-13541-2016-INIT/en/pdf 229 UNCTAD, “Interpretation of IIAs: What States Can Do”, IIA Issues Note, December 2011, p21 http://www.unctad.org/en/Docs/web diaeia2011d10_en.pdf and Gus Van Harten, “Arbitrator Behaviour in Asymmetrical Adjudication (Part Two): An Examination of Hypotheses of Bias in Investment Treaty Arbitration”, Osgoode Legal Studies Research Paper No. 31, 2016, http://ssrn.com/abstract=2721920 230 Public Citizen, “Fair and Equitable Treatment” and Investors’ Reasonable Expectations: Rulings in US FTAs and BITs Demonstrate FET Definition Must be Narrowed”, 2012, https://www.citizen.org/ documents/MST-Memo.pdf 231 Ceciia Malmström, European Trade Commissioner, Speech at the European Parliament, 6th July 2015, http://www.europarl.europa. eu/sed/doc/speech/20150706/1436254979093_01_en.doc 232 European Commission, Press Release, “Commission proposes new Investment Court System for TTIP and other EU trade and investment negotiations”, 16 September 2015, http://trade.ec.europa.eu/ doclib/press/index.cfm?id=1364 233 Council of the European Union, “Joint Interpretative Instrument on the Comprehensive Economic and Trade Agreement (CETA) between Canada and the European Union and its Member States”, 27 October 2016, http://data.consilium.europa.eu/doc/document/ ST-13541-2016-INIT/en/pdf 234 European Commission announcement on the EU-Canada CETA, 29 February 2016, http://trade.ec.europa.eu/doclib/press/ index.cfm?id=1468 235 European Commission announcement on the EU-Vietnam FTA, 1st February 2016, http://trade.ec.europa.eu/doclib/press/ index.cfm?id=1449

238 European Commission, Press Release, “Commission proposes new Investment Court System for TTIP and other EU trade and investment negotiations”, 16 September 2015, http://trade.ec.europa.eu/ doclib/press/index.cfm?id=1364 239 Ibid. 240 Deutscher Richterbund, “Stellungnahme zur Errichtung eines Investitionsgerichts für TTIP – Vorschlag der Europäischen Kommission vom 16.09.2015 und 12.11.2015”, Nr. 04/16, 4 February 2016, http://www.drb.de/cms/index.php?id=952, unofficial translation: https://www.foeeurope.org/sites/default/files/eu-us_ trade_deal/2016/english_version_deutsche_richterbund_opinion_ ics_feb2016.pdf. 241 Statement from the European Association of Judges (EAJ) on the proposal from the European Commisison on a new investment court system, 9 November 2015, http://www.iaj-uim.org/iuw/wp-content/ uploads/2015/11/EAJ-report-TIPP-Court-october.pdf. 242 Peter M Robinson, Karsten Dybvad and Urban Bäckström, “The ‘I’ in the TTIP will create a global gold standard “, The Financial Times, 10 March 2014, http://www.uscib.org/docs/ft_letter_to_the_ editor_robinson.pdf 243 European Commission, “Investment in TTIP and beyond –the path for reform”, 2015, http://trade.ec.europa.eu/doclib/docs/2015/ may/tradoc_153408.PDF 244 European Commission, “Investment in TTIP and beyond –the path for reform”, 2015, http://trade.ec.europa.eu/doclib/docs/2015/ may/tradoc_153408.PDF 245 For a critical analysis of the Commission’s ‘reform’ agenda, see, for example: Seattle to Brussels Network, “ISDS: Spreading the disease instead of looking for a cure”, 2015, http://www.s2bnetwork. org/isds-statement/; Gus Van Harten, “A Parade of Reforms: The European Commission’s Latest Proposal for ISDS”, 2015, http:// papers.ssrn.com/sol3/papers.cfm?abstract_id=2603077; IISD, “A Response to the European Commission’s December 2013 Document ‘Investment Provisions in the EU-Canada Free Trade Agreement (CETA)’”, 2014, http://www.iisd.org/sites/default/files/pdf/2014/ reponse_eu_ceta.pdf ; Seattle to Brussels Network, “Investment in CETA. A response to a lobby document by DG Trade”, 2014, http:// eu-secretdeals.info/upload/2014/03/S2B-Marc-Maes-CETAInvestment_Response-to-DG-Trade-claims-March-7-2014_v2.pdf ; Corporate Europe Observatory, “Still not loving ISDS. 10 reasons to oppose investors’ super rights in EU trade deals”, 2014, http:// corporateeurope.org/international-trade/2014/04/still-not-lovingisds-10-reasons-oppose-investors-super-rights-eu-trade 246 UNCTAD, “Investor-state dispute settlement: an information note on the United States and the European Union”, IIA Issue Notes, No. 2, 2014, http://unctad.org/en/PublicationsLibrary/ webdiaepcb2014d4_en.pdf 247 http://ttip2016.eu/map.html 248 BusinessEurope, Position paper, “Investor-State Dispute Settlement – A necessary mechanism to ensure investor protection”, 2 May 2014, https://www.businesseurope.eu/sites/buseur/files/media/ imported/2014-00488-E.pdf 249 Member States’ representatives (under anonymity) 250 Jan Kleinheisterkamp, “Is there a need for Investor-State Arbitration in the Transatlantic Trade and Investment Partnership (TTIP)?”, 14 February 2014, London School of Economics - Law Department; Cornell University - Law School, http://papers.ssrn.com/sol3/ papers.cfm?abstract_id=2410188 251 Franziska Keller, Parliamentary question, 2012, http://www.europarl.europa.eu/sides/getDoc. do?type=WQ&reference=E-2012-011230&language=EN 252 https://twitter.com/PeterKirkegaard/status/615455538403504128 253 Ministry of Economy of Poland, “Position on ISDS in TTIP“, 2015, http://www.mg.gov.pl/Wspolpraca+miedzynarodowa/ Handel+zagraniczny/TTIP/Mechanizm+ISDS 
 254 For a detailed set of arguments see “Central and Eastern European countries at the crossroads. Why governments should reject investment arbitration in TTIP”, https://www.tni.org/en/publication/ central-and-eastern-european-countries-crossroads

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255 Friends of the Earth Europe, “The Hidden Costs of EU trade deals”, 2014, http://www.foeeurope.org/ how-taxpayers-footing-bill-europes-trade-deals-041214 256 Karel de Gucht, quoted in: Axel Berger, CATO Institute Online Forum, “TTIP and Investment Protection: Reason for Failure or Impetus for Reform?”, October 2015, http://www.cato.org/publications/cato-online-forum/ ttip-investment-protection-reason-failure-or-impetus-reform 257 BusinessEurope, Position paper, “Investor-State Dispute Settlement – A necessary mechanism to ensure investor protection”, 2 May 2014, https://www.businesseurope.eu/sites/buseur/files/media/ imported/2014-00488-E.pdf 258 Daniela Vincenti, “Analyst: ISDS model is Australia, not Canada“, Euractiv, 16 December 2014, http://www.euractiv.com/sections/ trade-society/analyst-isds-model-australia-not-canada-310835 259 Seattle to Brussels network, The ISDS Files, http://www.s2bnetwork.org/the-isds-files/ 260 TNI, The dark side of investment agreements, July 2012, https://www.youtube.com/watch?v=oG07lrfLpeA 261 Campact, ISDS – A corporate system of injustice, October 2014, https://www.youtube.com/watch?v=dSuIGKSm7z0 262 WEED e.V., Investor State Dispute Settlement and Financial Crises, December 2014, https://www.youtube.com/watch?v=Lm1khyMmwvo 263 OneWorld.nl, The evolution of ISDS since 1990, December 2015, https://www.youtube.com/watch?v=VZhSBoZwBdQ 264 Democracy Center, Global Investment Rules: Threat to Democracy and the Environment, December 2011, https://www.youtube.com/ watch?v=EP2r9ZW-KBo 265 IISD, “Investment Treaties and why they matter to sustainable development”, 2011, http://www.iisd.org/pdf/2011/investment_ treaties_why_they_matter_sd.pdf 266 Mahnaz Malik, “The legal monster that lets companies sue countries”, The Guardian, 4th November 2011, http://www.theguardian.com/ commentisfree/2011/nov/04/bilateral-investment-treaties 267 Claire Provost and Matt Kennard, “The obscure legal system that lets corporations sue countries “, The Guardian, 10 June 2015, http://www.theguardian.com/business/2015/jun/10/ obscure-legal-system-lets-corportations-sue-states-ttip-icsid 268 Pia Eberhardt, Cecilia Olivet, “Profiting from injustice: How law firms, arbitrators and financiers are fuelling an investment arbitration boom”, published by Corporate Europe Observatory and Transnational Institute, 2012, http://www.tni.org/briefing/ profiting-injustice 269 Transnational Institute and Corporate Europe Observatory, “Transatlantic Corporate Bill of Rights”, 2013, https://www.tni.org/ en/briefing/transatlantic-corporate-bill-rights 270 Cecilia Olivet, Pia Eberhardt, “Profiting from Crisis”, published by Transnational Institute and Corporate Europe Observatory, 2013, https://www.tni.org/en/profiting-crisis 271 Corporate Europe Observatory, Transnational Institute, Friends of the Earth Europe and others, “No Fracking Way”, 2014, https://www.tni.org/en/briefing/no-fracking-way 272 Transnational Institute, “Licensed to grab”, 2015, https://www.tni.org/en/briefing/licensed-grab 273 Corporate Europe Observatory, AITEC, PowerShift, Transnational Institute and others, “Polluters Paradise”, 2015, https://www.tni.org/en/publication/polluters-paradise 274 Claire Provost, “Taxes on trial. How trade deals threaten tax justice”. Published by Transnational Institute and Global Justice Now, 2016, https://www.tni.org/en/publication/taxes-on-trial 275 Corporate Europe Observatory, Transnational Institute, and others, “Trading Away Democracy”, 2016, https://corporateeurope.org/ sites/default/files/ceta-trading_away_democracy-2016en.pdf 276 Friends of the Earth Europe, “The Hidden Costs of EU trade deals”, 2014, https://www.foeeurope.org/ how-taxpayers-footing-bill-europes-trade-deals-041214 277 Friends of the Earth Europe, The Sierra Club and others, “Oil Corporations vs Climate”, 2016, https://www.foeeurope.org/ transcanada-15billion-danger-trade-deal-220216 278 Transnational Institute and others, “Signing Away Sovereignty”, 2016, https://www.tni.org/en/signing-away-sovereignty 279 Transnational Institute, Friends of the Earth International, Focus on the Global South and others, “The Hidden Costs of RCEP and Corporate Trade Deals in Asia”, 20116,

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https://www.tni.org/en/publication/the-hiddencosts-of-rcep-and-corporate-trade-deals-in-asia 280 European Commission, “Trade for All - New EU Trade and Investment Strategy”, 2015, http://ec.europa.eu/trade/policy/ in-focus/new-trade-strategy/ 281 European Commission, press release, “Commission proposes new Investment Court System for TTIP and other EU trade and investment negotiations”, 16 September 2015, http://trade. ec.europa.eu/doclib/press/index.cfm?id=1364 282 European Commission, CETA Agreement, February 2016, http:// trade.ec.europa.eu/doclib/docs/2016/february/tradoc_154329.pdf 283 European Commission, EU-Vietnam Agreement, February 2016, http://trade.ec.europa.eu/doclib/docs/2016/february/ tradoc_154210.pdf 284 European Commission, European Union’s proposal for Investment Protection and Resolution of Investment Disputes in the TTIP negotiations, as tabled on November 2015, http://trade.ec.europa. eu/doclib/docs/2015/november/tradoc_153955.pdf 285 Seattle to Brussels Network, “Courting Foreign Investors http://www.s2bnetwork.org/isds-courting-foreign-investors/ 286 Corporate Europe Observatory, Transnational Institute and others, “The Zombie ISDS”, 2016 https://www.tni.org/en/publication/ the-zombie-isds 287 Corporate Europe Observatory, Transnational Institute, Friends of the Earth Europe, German NGO Forum on Environment and Development, and Canadian Center on Policy Alternatives, “Investment Court System put to the test”, 2016 https://www.tni. org/en/publication/investment-court-system-put-to-the-test 288 Friends of the Earth Europe, “Investment court system, ISDS in disguise: 10 reasons why the EU’s proposal doesn’t fix a flawed system”, 2016, https://www.foeeurope.org/ investment-court-system-ISDS-disguise-170216 289 Gus Van Harten, “Key Flaws in the European Commission’s Proposals for Foreign Investor Protection in TTIP”, 17 November 2015, Osgoode Legal Studies Research Paper No. 16/2016, http://papers.ssrn.com/sol3/papers.cfm?abstract_id=2692122 290 David Schneiderman, “A CETA Investment Court is not the solution”, The Globe and Mail, 5 March 2016, http://www.theglobeandmail.com/report-on-business/ rob-commentary/a-ceta-investment-court-is-not-the-solution/ article29034167/ 291 Claude Rolin, “TTIP: la Commission jette de la poudre aux yeux”, originally published in Le Soir, 20 October 2015, http://www.clauderolin.eu/carteblanche 292 Friends of the Earth Europe, “Rights for business, not for people: the EU agenda”, 2015, https://www.foeeurope.org/ rights-business-not-people-EU-agenda-271115 293 UNCTAD, International Investment Agreements Navigator, http:// investmentpolicyhub.unctad.org/IIA/IiasByCountry#iiaInnerMenu 294 UNCTAD, Investment Dispute Settlement Navigator, http://investmentpolicyhub.unctad.org/ISDS 295 ICSID, Cases search, https://icsid.worldbank.org/en/Pages/cases/AdvancedSearch.aspx 296 ITALAW, http://www.italaw.com/ 297 Investment Treaty News, IISD, http://www.iisd.org/itn/ 298 IAReporter, http://www.iareporter.com/ 299 Kluwer Arbitration blog, http://kluwerarbitrationblog.com/ 300 Global Arbitration Review, http://globalarbitrationreview.com/ 301 Seattle to Brussels Network (S2B) http://www.s2bnetwork.org/cat/issues/eu-investment-policy/ 302 ISDS bilaterals.org http://isds.bilaterals.org/ 303 ISDS corporate attacks http://www.isdscorporateattacks.org/ 304 Network for Justice in Global Investment (NJGI) http://justinvestment.org/ 305 TNI/Trade and Investment https://www.tni.org/en/work-area/trade-investment 306 CEO/Trade and Investment http://corporateeurope.org/international-trade 307 International Institute for Sustainable Development (IISD) http://www.iisd.org/topic/investment 308 Public Citizen / Global Trade Watch http://www.citizen.org/investorcases

The Transnational Institute (TNI) is an international research and advocacy institute committed to building a just, democratic and sustainable planet. For more than 40 years, TNI has served as a unique nexus between social movements, engaged scholars and policy makers. www.TNI.org

Friends of the Earth International is the world’s largest grassroots environmental network, uniting 75 national member groups and some 5,000 local activist groups on every continent. With over 2 million members and supporters around the world, we campaign on today’s most urgent environmental and social issues. We challenge the current model of economic and corporate globalization, and promote solutions that will help to create environmentally sustainable and socially just societies. www.foei.org

Corporate Europe Observatory (CEO) is a research and campaign group working to expose and challenge the privileged access and influence enjoyed by corporations and their lobby groups in EU policy making. CEO works in close alliance with public interest groups and social movements in and outside Europe to develop alternatives to the dominance of corporate power. www.corporateeurope.org