I NVESTOR -S TATE D ISPUTE S ETTLEMENT AND TTIP - T HREAT OR - - PowerPoint PPT Presentation

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I NVESTOR -S TATE D ISPUTE S ETTLEMENT AND TTIP - T HREAT OR - - PowerPoint PPT Presentation

Nov 10, 2022 184 likes •399 views

Ecologic Institute An International Think Tank for Environment and Development Berlin Brussels Washington D.C. San Mateo CA TTIP EPC DIALOGUE I NVESTOR -S TATE D ISPUTE S ETTLEMENT AND TTIP - T HREAT OR OPPORTUNITY ? Max Grnig Ecologic

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Ecologic Institute

An International Think Tank for Environment and Development

Berlin Brussels Washington D.C. San Mateo CA

TTIP – EPC DIALOGUE INVESTOR-STATE DISPUTE SETTLEMENT

AND TTIP - THREAT OR OPPORTUNITY?

Max Grünig

www.ecologic.eu

Ecologic Institute

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

Potential environmental benefits of TTIP

will include measures to foster trade in environmentally beneficial products + services

  • low carbon
  • resource efficient
  • energy efficient

green public procurement consumer information unrestricted and sustainable access to raw materials

6/3/2014

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

Same Same but different

differences in regulatory culture

  • precautionary principle in the EU?
  • case law and self-regulation in the US?
  • r more nuanced picture?

resulting levels of protection

  • no clear answer (evidence points both ways)
  • stronger EU: GMO, hormone meat,

chemicals, chlorinated poultry

  • stronger US: pollution (esp. air, PM)

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

Investor-state dispute settlement (ISDS)

protect investors against

  • direct and indirect expropriation
  • unreasonable, arbitrary or discriminatory clauses

ensure that investors are treated in a fair and equitable way (FET) umbrella clause (converts a contract claim, i.e. a claim based on a specific contract between two parties under civil law, into a treaty claim, i.e. a claim under public international law) allows private investors to sue a host state for the alleged violation possibly limiting EU and US ability to implement new environmental regulation

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

Potential environmental impacts

ISDS may lead to

  • potential for lower environmental standards
  • potential for direct and indirect health

impacts through damage to ecosystems

  • potential for direct and indirect economic

and social impacts through damage to ecosystems

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

ISDS – what is to be won?

who benefits and why? do we achieve a balanced distributions of benefits and costs? are additional investor rights matched with additional corporate responsibilities? what is the objective of ISDS?

  • for investors
  • for states

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

Past experience with ISDS

568 known disputes by the end of 2013

source: UNCTAD, Recent Developments in Investor-State Dispute Settlement (ISDS), IIA Issues Note (Geneva: UNCTAD, 2014)

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

ISDS most frequent respondent states

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ECP Dialogue, Brussels, Max Grünig source: UNCTAD, Recent Developments in Investor-State Dispute Settlement (ISDS), IIA Issues Note (Geneva: UNCTAD, 2014)

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

ISDS most frequent respondent states

6/3/2014

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ECP Dialogue, Brussels, Max Grünig source: UNCTAD, Recent Developments in Investor-State Dispute Settlement (ISDS), IIA Issues Note (Geneva: UNCTAD, 2014)

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

ISDS home states

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ECP Dialogue, Brussels, Max Grünig source: UNCTAD, Recent Developments in Investor-State Dispute Settlement (ISDS), IIA Issues Note (Geneva: UNCTAD, 2014)

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

ISDS home states

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ECP Dialogue, Brussels, Max Grünig source: UNCTAD, Recent Developments in Investor-State Dispute Settlement (ISDS), IIA Issues Note (Geneva: UNCTAD, 2014)

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

ISDS and environment (I)

renewable energy cases

  • 25% of all cases in 2013
  • protecting investments in renewables
  • mostly in Spain and in Czech Republic
  • claim against loss of tax subsidy
  • in 2014 additional cases vs. Spain and Italy

enforcement of a court decision in Panama in relation to FDI in a hydroproject

6/3/2014

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

ISDS and environment (II)

challenging environmental measures

  • Quebec’s moratorium on hydraulic fracturing
  • Ontario’s moratorium on offshore wind farms
  • failed developments of beachfront resorts in

environmentally sensitive areas (Croatia and Costa Rica)

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

ISDS issues

clear winner and loser states high costs: 8 mn USD /case up to 30 mn high compensations (up to 1.7 bn USD) diverging findings on same issue lack of transparency of procedures limited redress options conflicts of interests for arbitrators challenges to environmental measures

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

BUT: complex picture

investors don‘t always win (from cases up to 2013)

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ECP Dialogue, Brussels, Max Grünig source: UNCTAD, Recent Developments in Investor-State Dispute Settlement (ISDS), IIA Issues Note (Geneva: UNCTAD, 2014)

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

Recommendations

best: remove ISDS from TTIP

  • therwise, provisions must be formulated in a

narrow and precise manner, in order to minimize any risks for environmental regulation

  • prevent investors from bringing multiple or

frivolous claims (investors who lose pay all litigation costs, including those of the state)

  • make the arbitration system more transparent
  • deal with conflicts of interest and consistency of

arbitral awards

6/3/2014

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

Where are we?

language in the EC negotiation mandate is firmer on some issues and rather light on others, including “should 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” “Consideration should be given to the possibility of creating an appellate mechanism applicable to investor-to-state dispute settlement...“ “The investor-to-state dispute settlement mechanism should contain safeguards against frivolous claims.”

6/3/2014

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

Which way do we go?

discussion of the EC consultation on ISDS:

possibly more narrow definition of investment limitations to most-favoured-nation treatment insufficient approach to expropriation uncertain impact of proposed changes to ISDS

  • transparency of proceedings
  • multiple claims and domestic courts
  • conduct of arbitrators
  • costs borne by losing party
  • appelate mechanism

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

Discussion

Let‘s not forget structural and procedural aspects over the visibility of single issues. If there are risks and opportunities, how can we ensure that the opportunities are seized? Do we need ISDS between two entities with functioning legal systems? Rights should also entail obligations, i.e. with investor rights should also arise new investor obligations (increased liability).

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ECP Dialogue, Brussels, Max Grünig

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Ecologic Institute

An International Think Tank for Environment and Development

www.ecologic.eu

6/3/2014 ECP Dialogue, Brussels, Max Grünig

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THANK YOU!

Max Grünig

Ecologic Institute, Pfalzburger Str. 43-44, D-10717 Berlin

  • Tel. +49 (30) 86880-0, Fax +49 (30) 86880-100

max{dot}gruenig{at}ecologic{dot}eu www.ecologic.eu