New system of corporate courts in Canada-EU trade deal condemned as ‘putting lipstick on a pig’

Date: 29 February 2016

NGOs and civil society groups have today criticized new plans by the European Commission and the Canadian government to include a variation of ‘corporate courts’ as part of the controversial trade deal between Canada and the EU. Trade campaigners are arguing that the commission’s proposal is simply putting ‘lipstick on a pig’ without addressing any of the fundamental criticisms of the investor-state dispute settlement (ISDS) that has proved to be so controversial within the CETA and TTIP negotiations.
 
Nick Dearden, the director of Global Justice Now said:

“Under the pretence of breaking from the old corporate court system known as ISDS, the commission is actually trying to create a permanent court for big business. Far from preventing corporations bringing cases against the British government, this proposal makes it easier for them to do so. While pretending to iron out procedural problems, the commission has created a monster which will become a reality if this treaty goes through.

“There’s so much public pressure against these toxic trade deals. So the commission is desperately trying to mollify those critical MEPs who have been listening to the millions of people across Europe who have said no to CETA and no to this system of corporate courts. But MEPs need to see that the commission is simply trying to put lipstick onto a pig. We urge all MEPs and member states interested in defending democratic process against this corporate power grab to oppose CETA.”

Maude Barlow, National Chairperson of the Council of Canadians said:

“This is a dangerous new way to give transnational corporations their own court, which local companies and groups can’t access. These changes don’t address the concerns that led to the massive public outcry over ISDS in both Canada and Europe.”

The fundamental problems with the EU’s alternative proposal to ISDS have been summarised in the following bullet point in a briefing put out by Corporate Europe Observatory and a coalition of other groups from across Europe

• The number of investor-state cases, as well as the sum of money involved, has skyrocketed over the last two decades
• The last two decades have seen billion-dollar investor lawsuits against the alleged damage to corporate profit of legislation and government measures in the public interest.
• The EU’s ‘new’ ISDS model (re-labelled ICS) is as dangerous for democracy, public interest law, and public money as the ‘old’ model enshrined in the EU-Canada trade agreement CETA.
• Investor claims against non-discriminatory and lawful measures to protect health, the environment, and other public interests would be possible under the new EU proposal.
• Under the EU proposal, billions in taxpayers’ money could be paid to corporations, including for future lost profits that they hypothetically could have earned.
• The EU proposal increases the risk of costly lawsuits against public interest measures as it arguably grants investors even more rights than many existing investment treaties
• If the US-EU trade agreement TTIP included the proposed investor rights, liability and financial risks would multiply for EU member states and far exceed those posed by any existing treaty signed by them
• Under the EU proposal, transnational companies could even sue their own governments
• The EU’s investor rights proposal is a sure-fire way to bully decision-makers, potentially curtailing desirable policymaking
• The dispute settlement process proposed by the EU is not judicially independent, but has a built-in, pro-investor bias
• There are serious doubts about whether the investor rights proposal is compatible with EU law

Rather than putting an end to ISDS, the EU’s investment protection agenda threatens to lock EU members into ISDS forever.