Mécanismes ISDS : le rapport des Amis de la Terre

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The hidden cost of EU trade deals: Investor-state dispute settlement cases taken against EU member states 1

InVeStOr-sTaTe dIsPuTe sEtTlEmEnT

cAsEs tAkEn aGaInSt Eu mEmBeR sTaTeS

ThE hIdDeN cOsT

oF Eu tRaDe dEaLs:

4tH DeCeMbEr, 2014


2/12

2

ThehiddencostofEUtradedeals:Investor-statedisputesettlementcasestakenagainstEUmemberstates

1

ThehiddencostofEU

tradedeals:Investor-statedisputesettlementcasestakenagainstEUmemberstates

GERMANYCASESTUDY:asettledcase

resultinginlowerenvironmentalstandards

CZECHREPUBLICCASESTUDY:Theunbearable

costsoftheunpredictablearbitrationsystem

POLANDCASESTUDY:Taxpayerscan

onlyseethebilltheyhavetofoot

POLANDCASESTUDY:Thehighcostsof

settlementsarisingfrominvestor-statedis

putes

SLOVAKREPUBLICCASESTUDY:Thehighp

rice

ofaffordablehealthinsuranceforeverybody

CoNtEnTs

ROMANIACASESTUDY:EuropeanCommissiontries

invaintointerveneininvestmenttreatyarbitra

tion

ExEcUtIvE

SuMmArY

InTrOdUcTiOn

MeThOdOlOgY

KeY

FiNdInGs

GeNeRaL

tReNdSiNIsDs

cLaIm

SaGaInSt

mEmBeRsTaTeSaT

tHe

Eu

lEvEl

StRiKiNg

fEaTuReSiNIsDs

cLa

ImSiNiTiAtEdaGaInSt

Eu

mEmBeRsTaTeS

EnViRoNmEnT

uNdEr

aTtAcK

PrEsSuRe

oNEaStErNEuRoPe

CoNcLuSiOn

AcKnOwLeDgEmEnTs:

assistancefromtheDutc

hMinistryforForeignAffairs(DGIS),

theIsvaraFoundation,a

ndtheJosephRowntreeFoundation.

Thecontentsofthisdocu

mentarethesoleresponsibilityof

-

ingthepositionofthefundersmentionedabove.Thefunders

cannotbeheldresponsib

leforanyusewhichmaybemadeof

theinformationthisdocumentcontains.Detailedinformation

aboutFriendsoftheEarthEuropesfundingcanbefoundat:

ReSeArChEdaNd

wRiTtEn

bY:

EmmaJayneGeraghty,NatachaCingotti

CoNtRiBuTiOnSaNdeDiTs

bY:

FrancescaGater,JohnH

yland,PauldeClerck

ThankstoGusVanHartenandPatrickGleesonfortheirin-

sightfulcommentsdurin

gtheresearchperiod.

CoMpLeTeDiNcO

lLaBoRaTiOn

wItH:

AmigosdelaTerra,BUN

DfrUmweltundNaturschutz,

FriendsoftheEarthCroatia,FriendsoftheEarthEngland,

WalesandNorthernIreland,Global2000,Mileiudefensie,

FriendsoftheEarthMalta,MouvementEcologique,NOAH,

ZaZemiata.

DeSiGn

bY:

LindsayNoble,www.lind

sayynoble.co.uk

FriendsoftheEarthEur

opeisthelargestgrassrootsenvi-

ronmentalnetworkinEurope,unitingmorethan30nation-

alorganisationswiththo

usandsoflocalgroups.Wearethe

EuropeanarmofFriendsoftheEarthInternationalwhich

unites74nationalmemb

erorganisations,some5,000local

activistgroups,andover

twomillionsupportersaroundthe

world.Wecampaignontodaysmosturgentenvironmentaland

socialissues.Wechallengethecurrentmodelofeconomicand

corporateglobalisation,andpromotesolutionsthatwillhelpto

createenvironmentallysustainableandsociallyjustsocieties.

Wepromoteenvironmen

tallysustainablesocietiesonthelocal,

regional,nationalandgloballevels.Weseektoincreasepublic

participationanddemocraticdecision-making.Greaterdemoc-

racyisbothanendinits

elfandisvitaltotheprotectionofthe

environmentandthesou

ndmanagementofnaturalresources.

Weworktowardsenvironmental,social,economicandpolitical

justiceandequalaccesstoresourcesandopportunitiesonthe

local,regional,nationalandinternationallevels.

AnNeX

1-

CoMpArAtIvE

dAtA


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2


3

ThehiddencostofEU


Investor-statedisputese

ttlement(ISDS)is

nothingnew,buttherecentandongoingtrade

negotiationsbetweentheEUandUS(TTIP)and

theEUandCanada(CET

A),havegivenriseto

mountingpubliccriticism

ofthemechanism.

Investor-statearbitrationprovidesforeign

investorswithaprivilegedmechanism(that

domesticinvestorsorotherpartsofsocietycannot

use).Foreigninvestorsc

ancircumventdomestic

fromhostgovernmentsinsecretbusinessfriendly

internationaltribunals,iftheydeemtheir

areaffectedbytheintroductionofregulatory

and/orpolicychangesin

thehoststate.These

arbitratorswhoissuetheirdecisionsbehindclosed

haveacommercialinterestinkeepingthesystem

aliveandtheyoftenworkforthesamecompanies

Claimsforcompensation

cananddoamountto

billionsofeuro.However

,ISDScasesthemselves,

aswellastheawards,an

dotheroutcome

documentsforthesecasesarenotfullydisclosed

tothepublicevenwhencasesmayrelatetopublic

interests,suchastheenvironment.

FriendsoftheEarthEur

opecompiledavailable

dataonISDScasestaken

againstEUmember

statessince1994,andfo

rwhichdocumentation

isavailableinthepublic

domain.Consideringthe

enormouslackoftransparencyaroundinvestor-

statearbitration,thisresearchexercisecanonly

provideaninsightintotheoverallscaleofthe

phenomenon.However,ithighlightstheirrefutable

attackonrecentEUacce

ssioncountriesand

theenvironment,aswellasthecostthissystem

hasalreadyhadonEUta

xpayersandEuropean

democracy.

KeY

FiNdInG

s

127knownISDScaseshavebeenbroughtagainst20EU

memberstatessince

1994.

Detailsofthecompen

sationsoughtbyforeigninvestorswas

publiclyavailablefor

only62outofthe127cases(48%).The

compensationsoughtforinthese62casesamountstoalmost

!30billion1.

Thetotalamountawardedtoforeigninvestorsinclusiveof

knowninterest,arbitrationfees,andotherexpensesandfees,

aswellastheonlykn

ownsettlementpaymentmadebyanEU

memberstatewaspubliclyavailablefor14outofthe127

cases(11%)andamo

untsto!3.5billion.2

Thelargestknownam

ounttobeawardedbyatribunalagainst

anEUmemberstatewas!553million3

intheCeskoslovenska

ObchodniBankavs.S

lovakRepublic

case(1997).

76%ofknowncases(97outofthe127)weretaken

againstnewmember

statesthataccededtotheEUbetween

2004and2007.

26ISDSclaimshave

targetedtheCzechRepublic(20%ofthe

total),makingittheEUmemberstatewiththemostcases

Almost60%ofcases(75outofthe127)concern

environmentallyrele

vantsectors.

Thetotalnumberofk

nownclosedcasesforwhichoutcomes

arepubliclyavailable

(63outofthe127cases)showfullor

partialsuccessforinvestorsin44%(28outof63cases)of

caseswith15cases

infavouroftheinvestorsand13cases

resultinginsettlements.

Whilesettlementstendtohaveapositiveconnotation,

becausebothparties

cometoanagreementthatputsanend

tothedispute,withoutonewinningovertheother,thesecan

stillbeverycostlyto

thetaxpayer.Forinstance,thelargest

knownamounttohavebeenpaidoutbyanEUmemberstate

relatestoasettlemen

t(EurekovsPoland,August2005).Asa

resultofthesettleme

ntagreementreachedwithEurekoover

aninsuranceenterpr

ise,over!2billionwaspaidbyPoland.4

!

#$%&'''&!(!&%)(

$

#*&+)$&$)'&!*(

*

#++*&!$$&')*,$%

(

#$&$)!&+*)&%*',-./012345678209/015:0592026/675:/49/;/?.@ABC,D,E242F=:/7307275:26I5

ExEcUtIvE

SuMmArY

aSkEdfRoM

GeRmAnY

AwArD

2

ThehiddencostofEU


businesses

can

sue

Governments

in

secret

corporate

courts

if

newlaws

thatprotect

people

or

the

environment

get

in

the

way

of

th

eir

profits


4/12


5/12


7

-

putesettlementcasesag

ainstEUmemberstatessince1994.Ituses

dataavailableinthepub

licdomain.Itattemptstoprovideacompre-

hensiveoverviewofallk

nowncasesforwhichtherelevantdocumen-

tationisaccessible.However,subjecttoagreementbybothparties,

thedisputemaybeamatterofpublicinterest.11

Duetothelimited

transparencyobligationsaroundarbitrationproceedings,12

thecases

gatheredheremightnot

encompassallcasesofinvestor-statedis-

putestakenagainstEUm

emberstates.Notallcasesarepublished

andevenfewerarefully

documented.Evenwhencasesarepublicly

known,manydetailsoft

heamountsawardedarenotfullydisclosed.

Wherepossible,caseinfo

rmationwassourcedusingdatabasesfrom

theInternationalCentre

forSettlementforInvestmentDispute

(ICSID)13,th

eUnitedNat

ionsCommissiononInternationalTrade

Law(UNCITRAL)

14,o

rth

eUnitedNationsConferenceonTradeand

Development(UNCTAD)

15

.Othercasesweresourcedusingarbitra-

tiontribunalwebsitessu

chas;theInternationalCourtofArbitration

(ICC)16,

TheStockholmC

hamberofCommerce(SCC)17

andthePerma-

nentCourtofArbitration

(PCA)18.In

addition,caseawarddocuments

weresourcedfromtheEnergyCharterTreatywebsite19,th

eInvest-

mentTreatyArbitration

website20

withsupplementaryinformation

individualcases.Whereinformationwasnotaccessiblethroughthe

above-mentionedsources,informationwascollectedfromrelevant

investmentarbitrationn

ewsservicereports(suchasIAReporter)21

andotherrelevantjourn

alarticles.22

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ThehiddencostofEU


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16


17

ThehiddencostofEU


memberstatesonlyrevealsthetipoftheprivatearbitrationice-

berg.Yet,contrarytotheargumentsputforwardbytheEuropean

Commission,itclearlyshowstheunacceptable

coststhattaxpayers

andsocietybearwhenforeigninvestorsarebeinggrantedprivileged

treatment.

-

tailsaboutthedifferencesincaseoutcomes,w

hichclearlyshowthat

nomatterwhowinsthecase,legalandarbitr

ationfeesthatstates

havetobearfortheirdefense,costslargeamountsofpublicfunds

whichcannotbeinvestedforsociety.Likewise,whilesettlementsare

usuallypresentedasapositivesteptowardsresolution,theyoften

casewherePolandpaidover2billioneuro-andforcedangerouspolicy

changesfortheprotectionofcitizensandtheenvironment.86

InMarch2014,inresponsetothegrowingpub

licconcernandcriti-

cismofinvestor-statedisputes87,

theEuropean

Commissionlaunched

apublicconsultationontheinclusionofISDSintheEU-UStradedeal

(TTIP).Theconsultationquestionnairewasba

sedonthedraftinvest-

mentchapteroftheEU-Canadaagreement.An

extraordinary149

thousandpeoplereplied,ofwhichatleast131

thousandsaidnoto

ISDS.InSeptember2014,despiteunprecedentedscrutinyandpublic

engagement,theEuropeanCommissionconclu

dedtheEU-Canada

tradedealincludingspecialprivilegesforforeigninvestors.Thisdeal

-

tativereportonthepublicconsultationonISD

SinTTIP,clearlycon-

veyingtheCommissionsdisregardforwidespreadpublicdisapproval

onthemechanism.

DecisionmakersatnationalandEUlevelhave

repeatedlyattempted

todampentherisingconcernsthatincludingISDSintheEU-Canada

(CETA)andtheEU-US(TTIP)tradedealswill

dramaticallyincrease

thenumberoflawsuitslaunchedbyforeigninvestors,byreferringto

theexistinginvestmenttreatiesthatEUmemberstateshavealready

signedonto.Thisfailstoacknowledgethatthemainreasonwhymost

EuropeancountrieshavenotbeensuedthroughISDSisthatthey

havenotconsentedtoinvestor-statearbitrationwithotherhighcap-

ital-exportingcountries.Thiswillchangedram

aticallyiftheEU-Can-

adaandtheEU-USdealsgoaheadwithinvestor-statedisputesettle-

mentincluded.ThisalsofailstoacknowledgethatthenineEastern

EuropeancountriesthathavesignedBITswiththeUS(priortotheir

accessiontotheEU)havebeentargetedthroughthemechanism.

Includinginvestor-statearbitrationintheEU-

Canada(CETA)andthe

EU-US(TTIP)tradedealnegotiationsexpands

thescopeofprivate

arbitratorspowertoanunprecedentedscale.

Itquestionstherespon-

sibilityofgovernmentslockingtheirabilityto

regulateforthepublic

interestinthefuturevis--vistheircitizens,theverytaxpayerswho

willhavetofootthebillfortheriskstakenbyprivateinvestors.

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Mécanismes ISDS : le rapport des Amis de la Terre