European Member States refuse necessary reform, ignore the will of the European Parliament and insist that future EU investment agreements copy their bad practices

Just EU Investment Policy now!
Statement by the Seattle to Brussels Network (S2B) | 15 September 2011

European Member States refuse necessary reform,
ignore the will of the European Parliament and
insist that future EU investment agreements copy their bad practices

On Monday 12 September the General Affairs Council approved negotiating mandates for investment
protection chapters in free trade agreements with Canada, India and Singapore.

The mandates require the Commission to negotiate investment protection chapters that resemble the existing 1200
Bilateral Investment Treaties (BITs) to the maximum. By doing so, the member states refuse necessary reforms
to create more balance between the rights and obligations of the investors, the host and home countries and to
come to agreements that make investments instruments for sustainable development. The only thing that seems to
matter to the member states is the unconditional maximum protection of their investors and investments abroad.

The Seattle to Brussels Network beliefs that BITs are posing a threat to public policy, democratic
governance and the public interest; and that they need to be radically overhauled.
BITs give foreign investors the right to sue sovereign states before international arbitration tribunals if they
think that they have not been treated fairly. Investors are increasingly making use of this possibility and do
not hesitate to challenge governments’ social, environmental and economic regulations that affect the
profitability of their investment.

As a result, BITs have cost taxpayers millions in legal expenses and compensations and are eroding the
ability of governments to act in the best interests of their citizens.

The Seattle to Brussels Network stresses that the mandates adopted by the Council ignore the will of the
European Parliament expressed in its resolutions of 6 April and 8 June ii.

The European Parliament at least recognised some of the flaws in the EU Member States’ current international
investment agreements and
- urged the Commission and the Member States to be properly consulted on draft mandates for future investment
negotiations and stressed that its views must be taken into account;
- demanded that investment agreements be based on investor obligations in terms of compliance with human rights
and anti-corruption standards
- stated that speculative forms of investment shall not be protected
- expressed its deep concern regarding the level of discretion of international arbitrators and
called on the Commission to produce clear definitions of investor protection standards
- stated with regard to expropriation that a clear and fair balance must be established between public and private
interests
- proposed more precise wording with regard to non-discrimination and fair and equitable treatment.

In stark contrast to this last point the Council in its mandates insists explicitly on “unqualified” national and most-
favoured nation treatment.

In the same vein, the mandates adopted by the Council call for an effective investor-to-state dispute settlement
mechanism while the European Parliament considered that “given the highly developed legal systems of Canada
and the EU, a state-to-state dispute settlement mechanism and the use of local judicial remedies are the most
appropriate tools to address investment disputes”.

The only possible bright light in the Council’s mandates is the paragraph that says that investment protection
agreements shall be without prejudice to the right of the EU and the Member States to adopt and enforce measures necessary to pursue legitimate public policy objectives.

However it remains to be seen how strong this will eventually be reflected in the concluded agreements. And
hopefully the Member States will allow this right also for the countries that the Commission will negotiate with and
not just for “the EU and the Member States”.

The Seattle to Brussels network (S2B) will continue to campaign for an investment regime guided by:
- the incorporation of investor obligations into investment agreements in particular in areas of human rights and
corporate accountability
- more precise and restrictive language regarding investors’ rights
- the abolition of one-sided and secretive investor-to-state dispute settlement mechanisms
- an explicit and effective recognition of the right of governments to regulate and to formulate policies of general
interest
- a substantive social and environmental dimension.

S2B also denounces
- the secrecy of the decision-making process for the adoption of these negotiating mandates by the Council
and the Commission,
- the secrecy on the part of the Member States’ positions and their lack of willingness to organise public
consultations on the matter, and
- the fact that negotiating mandates are not published so that a public assessment of the directions of the EU
investment policy cannot be made.

Therefore S2B has posted the leaked text of the mandates on its website.

For further information contact
Bruno Ciccaglione
Coordinator of the Seattle to Brussels Network
(mobile +436641475502)

The Seattle to Brussels (S2B) Network (www.s2bnetwork.org) is a pan-European network of more than
70 organisations from 16 countries campaigning to promote a sustainable, socially and democratically
accountable system of trade. It includes development, environment, human rights, women and farmers
organisations, trade unions, social movements as well as research institutes. The S2B Network is part of
the global coalition ‘Our World is Not for Sale’ (www.ourworldisnotforsale.org ).

source: S2B