Democratic sovereignty, in Europe and its member states, definitely gives way to private interests. The ‘
Corporation
‘ – thanks to clauses included in CETA
and other toxic treaties, soon also in the TTIP
– can take legal action against national governments and the EU itself whenever they believe legislation is disruptive to their business. This is the verdict of the
Court of Justice
EU, which, in an opinion issued in plenary session on 4/30/19, affirmed the precedence of commercial agreements over public law.
The
‘
shredder’ serving
of the private sector, traditionally known as the ‘ISDS system’‘ (‘Investor – State Dispute Settlement‘), renamed ICS (‘Investment Court System‘) in the agreement between the European Union and Canada (CETA), thus gets the green light.
‘Investment Court System’, aka ISDS. The question submitted to the Luxembourg courts
The Kingdom of Belgium has called on the EU Court of Justice to rule on the compatibility of the investor-member state dispute settlement procedure with primary EU law. The European Commission led by Jean Claude Juncker claims credit for introducing this arbitration procedure, which he says would be a ‘new, effective, fair and transparent‘ system.
On the other hand, civil society-represented by various movements, brought together in Italy by the @StopTTIP_Italia campaign-denounces the dangers associated with the establishment of a ‘parallel court’ serving ‘corporations. It is ‘a weapon of multinational corporations against the environment and the sovereignty of states.’ It is ‘a judicial system parallel to the ordinary courts,’ a new court that decides on public law. With the power to order states to pay billions in damages and/or withdraw regulations that are challenged by businesses. Indeed, the procedure for resolving disputes between investors and states provides for the establishment of an arbitration panel of first instance and and appellate panel. As well as, in the long run, a multilateral investment court.
The Court of Justice, nonetheless, affirmed the compatibility of theICS (‘Investment Court System‘) with European law. Both with the principle of autonomy of EU law and the (at least in theory) exclusive jurisdiction of the Court of Justice in the interpretation of EU law, and with the principle of equal treatment and effectiveness of European law. And even with the Charter of Fundamental Rights, particularly with regard to the right of access to justice and the right to an independent and impartial tribunal. (1)
‘
The Law of the Union
does not preclude either the creation of a tribunal, an appellate tribunal, and subsequently a multilateral investment tribunal, or the fact that CETA grants them jurisdiction to interpret and apply the provisions of the agreement in light of the rules and principles of international law applicable between the parties to CETA.
Conversely, since these courts stand outside the Union’s jurisdictional system, they cannot be empowered to interpret or apply provisions of Union law other than those of CETA or to render decisions that may have the effect of preventing the Union’s institutions from functioning in accordance with the Union’s constitutional framework.’ (ECJ, ‘European Court of Justice,’ judgment 30.4.19)
In the European Court’s view, CETA (‘Canada-European Union Trade Agreement‘) contains clauses that deprive arbitral tribunals of any jurisdiction to challenge democratic choices of states on public policy, health, food and environmental safety, product safety, workplace safety, and fundamental rights. And in any case, according to the Luxembourg judges, CETA ‘contains sufficient guarantees to ensure the independence of the members of the envisaged tribunals.’
Greetings from the European Commission
Cecilia Malmström, outgoing European Commissioner for Trade, greets the opinion of the ‘European Court of Justice‘ with vibrant satisfaction. Mission accomplished. It is worth taking a step back and recalling statements made by Cecilia Malmström to ‘The Independent‘ newspaper, 13.10.15. Interviewer John Hilary, executive director of the NGO ‘War on Want – Fighting Global Poverty,’ had asked how the Commission could continue to promote TTIP in spite of massive opposition from Europeans.
‘
I do not take my mandate from the European people
‘. ‘
My mandate does not come from the European people ‘
, the commissioner declared. Who in fact collaborated extensively with Peter Sutherland (1946-2018), who was the first director-general of the WTO (‘World Trade Organization‘), chairman of Goldman Sachs. As well as,
ça va sans dir.
, former advisor to the Bilderberg Group and chairman of the Trilateral Commission in Europe.
‘
The EU-Canada Free Trade Agreement
, approved by the European Parliament in 2017, is now applied on a provisional basis and will only come into full effect after ratification by all member states. Only at the conclusion of this process can the Investment Justice System become operational. The ICS makes it clear that governments retain their right to regulate and achieve legitimate policy objectives, such as public health, safety, the environment, public morals, and the promotion and protection of cultural diversity’ (European Commission, 4/30/19).
The resigned European Commission stresses the features, which it says are positive, of the system introduced. Since the permanent court would be inspired by public international tribunals, consisting of a court of first instance and an appellate court, composed of professional and independent judges rather than enlisted experts for individual decisions. This tribunal, ‘held to the highest ethical standards through a strict code of conduct (…) will work in a transparent manner by opening hearings to the public; publishing documents submitted during cases; allowing interested parties (NGOs, trade unions, citizen representatives) to intervene in the proceedings and submit comments‘.
Democracy at risk
The asymmetric power given to ‘investors’ to bring billion-dollar compensation lawsuits against states represents an endless army of swords of Damocles over the heads of citizens and democratic institutions. And while citizens may remain oblivious, the same will not be true for national governments and assemblies, nor – note well – for regions and local governments. All the more vulnerable to ‘Corporation‘ lobbyists, who can threaten colossal compensation actions should they adopt acts that ‘disrupt’ their private interests. For example, in the case of nutrition policies or measures to inhibit the use of poisonous pesticides or other toxic substances in certain areas,
‘
This decision
dangerously legitimizes a mechanism that allows companies to seek multi-billion dollar compensation from governments that dare to defend their power. The ruling is also a blow to millions of citizens who have spoken out against this parallel corporate justice system, most recently, more than 555,000 signatories from across Europe have called for an end to ISDS in all its forms. (4) The ball is back in the political arena. We call on all parliaments of EU member states that have yet to ratify CETA to reject this unilateral agreement-which caters to big business but works against the interests of the majority of people in Europe.
In an attempt to circumvent the enormous opposition generated by ISDS, the European Commission renamed it ICS (Investment Court System) in CETA and other trade agreements, for example, with Singapore and Vietnam. But analyses show that, like ISDS, the alleged “new” ICS allows companies to circumvent national and European legal systems and sue governments in parallel courts when they regulate to protect the public interest and the environment‘ (‘Corporate Union Observatory,’ see note 5).
The Stop TTIP-Stop CETA Italy Campaign. highlights how the European Court’s ruling ‘legitimate a controversial system that allows multinational corporations to sue states to discourage the passage of laws that threaten their profits. Any regulation-even if enacted to protect the public interest or the environment-will be challengeable in opaque courts, which lends itself to serious conflicts of interest’. (6)
Over the past three decades, states in various parts of the world have been forced to pay US$84.4 billion to private companies under arbitration judgments similar to those introduced in toxic treaties. As a result of unfavorable judgments (67.5 billion) or onerous settlements (16.9 billion). (7) Such tribunals (8)-compared to which the ICS presents itself as a kind of ‘lipstick arbitration’-present a threat to democracy. For the ‘trita-norm’ serving ‘Corporations‘ nips in the bud the ability of states to act in the public interest. Environmental, social, health, human rights promotion and social policies, all in the trita-norm.
Dario Dongo and Sabrina Bergamini
Notes
(1) EU Court of Justice, Opinion 1/17 (plenary session), 4/30/19 (ECLI:EU:C:2019:341),
http://curia.europa.eu/juris/document/document.jsf?text=&docid=213502&pageIndex=0&doclang=IT&mode=lst&dir=&occ=first&part=1&cid=706718
(2) European Commission, DG Trade, press release 30.4.19
http://europa.eu/rapid/press-release_IP-19-2334_en.htm
(3) The NGO ‘
War on Want
– Fighting Global Poverty‘ published, on 11.10.15, an interesting report regarding the nefarious effects of CETA and TTIP on public services. V https://www.waronwant.org/resources/public-services-under-attack
‘
The European Union is transferring our public services
to the private sector and the European population is kept in the dark. Once a public service has been privatized and included in an international economic treaty, such privatization is effectively irreversible. Brussels bureaucrats are selling us down the river and the U.K. government [like those of other member states, ed.] is supporting them ‘ (John Hilary, ‘War on Want‘ executive director, 11.10.15)
(4) International campaign ‘Stop ISDS. #StopISDS, #StopCorporateImpunity, #BindingTreaty https://stopisds.org/
(5) ‘Corporate Union Observatory,’ statement 30.4.19
https://corporateeurope.org/en/2019/04/ecj-confirms-legality-unfair-corporate-tribunals-eu-trade-deals
(6) Campaign Stop TTIP Stop CETA Italy, press release 30.4.19. ‘EU court promotes multinationals’ court.
https://stop-ttip-italia.net/2019/04/30/ceta-corte-ue-tribunale-multinazionali/#more-6248
(7) Stop TTIP Stop CETA Italy Campaign (2019). Report ‘Rights for people, rules for corporations‘ https://stop-ttip-italia.net/wp-content/uploads/2019/01/Report_ISDS_BHR_2019.pdf
Dario Dongo, lawyer and journalist, PhD in international food law, founder of WIISE (FARE - GIFT - Food Times) and Égalité.
Journalist. Consumption, rights, nutrition, social, environment. Head of Consumers Help. She collaborated with ResetDOC, Il Riformista, La Nuova Ecologia, IMGPress.
