Investor-state dispute settlement – ISDS – means allowing corporations to sue governments over laws that might affect their profits. The tobacco company Philip Morris is currently suing Australia and Uruguay, under similar treaties, for their attempts to discourage smoking. It describes the UK’s proposed rules on plain packaging as “unlawful”: if TTIP goes ahead, expect a challenge.
Corporations can use the courts to defend their interests. But under current treaties, ISDS lets them apply instead to offshore tribunals operating in secret, without such basic safeguards as judicial review and rights of appeal. As Crouch notes, this is not just post-democracy, but “post-law”.
Tomorrow the TTIP is debated in the House of Commons. Next month negotiations resume between the US and EU. So you’d have imagined that our government might, by now, have sought to justify it.
There is only one possible justification for a separate judicial system: a failure by existing courts to fairly arbitrate businesses’ legal claims. So which judicial systems in the US or EU treat corporations unfairly?
I have asked this question (via Twitter) to the business secretary, Vince Cable; his deputy, Lord Livingston; and the Conservative leader in the European parliament, Syed Kamall. Resounding silence. I have asked it in this column, three times. Nothing. I have asked the business department by phone. After an attempt by its spokesman to suggest that there could be something wrong with the US system, and a subsequent failure to explain what this might be; he sent me this statement: “Investor protection is needed as domestic courts are not the typical route for investors to seek redress.” Not the typical route? That’s it?
In the House of Commons, the MP Zac Goldsmith asked the business minister to name the occasions in the past five years in which companies in the EU or US have been discriminated against in courts across the Atlantic. Answer: the government “does not have access to relevant information”.
The European commission argues that “the main reason for having an ISDS mechanism is because in many countries investment agreements are not directly enforceable in domestic courts”. Perhaps. But none of those countries are in the proposed trading bloc. A condition of EU membership is “an independent and efficient judiciary” with “legal guarantees for fair trial procedures”. What is a provision designed to protect investors in failed states doing in a treaty between the EU and the US?
One has to admire George Monbiot for his ability to publicise the ISDS. Hopefully MPs will vote accordingly. The question for any MP is in my emphasis above: What is ISDS – a provision designed to protect investors in failed states – doing in a treaty between the EU and the US?