[bestbits] FW: LDC's Turning Backs on Multistakeholder Trade Agreements

Fri Apr 11 06:07:54 EDT 2014

<cc list trimmed>

Nick,

thanks for making this point, which I had intended to make as well.
There is absolutley no equivalence here!

rgds,

McTim

On Fri, Apr 11, 2014 at 1:24 AM, Nick Ashton-Hart <nashton at consensus.pro> wrote:
> I'm sorry but to suggest BITS are multi stakeholder is just fundamentally
> incorrect. Love them or hate them, they are entirely different to what we
> talk about vis a vis multi stakeholder processes in Internet policy.
>
> On 11 April 2014 02:05:25 "michael gurstein" <gurstein at gmail.com> wrote:
>>
>> These “Investor Treaties” are the trade equivalent of multistakeholder
>> governance processes in that they give the private sector equal rights with
>> governments in determining the contents of sectoral trade agreements.
>>
>>
>>
>> M
>>
>>
>>
>> From: sid-l at googlegroups.com [mailto:sid-l at googlegroups.com] On Behalf Of
>> Sid Shniad
>> Sent: Thursday, April 10, 2014 12:17 PM
>> To: undisclosed-recipients:
>> Subject: Investor Treaties in Trouble
>>
>>
>>
>>
>> http://us5.campaign-archive2.com/?u=fa9cf38799136b5660f367ba6&id=3990f710bb&e=3f7d5d14f1
>>
>> SOUTHNEWS          No. 52, 10 April 2014
>>
>> SOUTHNEWS is a service of the South Centre to provide information and news
>> on topical issues from a South perspective.
>> Visit the South Centre’s website: www.southcentre.int.
>>
>> Investor Treaties in Trouble
>>
>> By Martin Khor
>>
>> The tide is turning against investment treaties and free trade agreements
>> that contain the controversial investor-state dispute system, as countries
>> like Indonesia and Germany take action on this.
>>
>> The tide is turning against investment treaties that allow foreign
>> investors to take up cases against host governments and claim compensation
>> of up to billions of dollars.
>>
>> Indonesia has given notice to it will terminate its bilateral investment
>> treaty (BIT) with the Netherlands, according to a statement issued by the
>> Dutch Embassy in Jakarta last week.
>>
>> “The Indonesian Government has also mentioned it intends to terminate all
>> of its 67 bilateral investment treaties”, according to the same statement.
>>
>> The Dutch statement has not been confirmed by Indonesia.  But if this is
>> correct, Indonesia joins South Africa, which last year announced it is
>> ending all its BITS.
>>
>> Several other countries are also reviewing their investment treaties.
>> This is prompted by increasing numbers of cases being brought against
>> governments by foreign companies who claim that changes in government
>> policies or contracts affect their future profits.
>>
>> Many countries have been asked to pay large compensations to companies
>> under the treaties.  The biggest claim was against Ecuador, which has to
>> compensate an American oil company US$ 2.3 billion for cancelling a
>> contract.
>>
>> The system empowering investors to sue governments in an international
>> tribunal, thus bypassing national laws and courts, is a subject of
>> controversy in Malaysia because it is part of the Trans-Pacific Partnership
>> Agreement (TPPA) which the country is negotiating with 11 other countries.
>>
>> The investor-state dispute settlement (ISDS) system is contained in free
>> trade agreements (especially those involving the United States) and also in
>> BITS which countries sign among themselves to protect foreign investors’
>> rights.
>>
>> When these treaties containing ISDS were signed, many countries did not
>> know they were opening themselves to legal cases that foreign investors can
>> take up under loosely worded provisions that allow them to win cases where
>> they claim they have not been treated fairly or that there expected revenues
>> have been expropriated.
>>
>> Indonesia and South Africa are among many countries that faced such cases.
>> The Indonesian government has been taken to the ICSID tribunal based in
>> Washington by a British company, Churchill Mining, which claimed the
>> government violated the UK-Indonesia BIT when its contract with a local
>> government in East Kalimantan was cancelled.
>>
>> Reports indicate the company is claiming compensation of US$ 1 billion to
>> US$ 2 billion in losses.
>>
>> This and other cases taken against Indonesia prompted the government to
>> review whether it should retain its many BITS.
>>
>> South Africa had also been sued by a British mining company which claimed
>> losses after the government introduced policies to boost the economic
>> capacity of the blacks to redress apartheid policies.
>>
>> India is also reviewing its BITS, after many companies filed cases after
>> the Supreme Court cancelled their 2G mobile communications licenses in the
>> wake of a high-profile corruption scandal linked to the granting of the
>> licenses.
>>
>> But it is not only developing countries that are getting disillusioned by
>> the ISDS.  Europe is getting cold feet over the investor-state dispute
>> mechanism in the Transatlantic Trade and Investment Partnership (TTIP) it is
>> negotiating with the US, similar to the mechanism in the TPPA.
>>
>> Several weeks ago, Germany told the European Commission that the TTIP must
>> not have the investor-state dispute mechanism.
>>
>> Brigitte Zypries, an economy minister, told the German parliament that
>> Berlin was determined to exclude arbitration rights from the TTIP deal,
>> according to the Financial Times.
>>
>> “From the perspective of the [German] federal government, US investors in
>> the EU have sufficient legal protection in the national courts,” she said.
>>
>> The French trade minister had earlier voiced opposition to ISDS, while a
>> report commissioned by the United Kingdom government also pointed out
>> problems with the mechanism.
>>
>> The European disillusionment has two causes.  ISDS cases are also
>> affecting the countries.
>>
>> Germany has been taken to ICSID by a Swedish company Vattenfall which
>> claimed it suffered over a billion euros in losses resulting from the
>> government’s decision to phase out nuclear power after the Fukushima
>> disaster.
>>
>> And the European public is getting upset over the investment system.  Two
>> European organisations last year published a report showing how the
>> international investment arbitration system is monopolised by a few big law
>> firms, how the tribunals are riddled with conflicts of interest and the
>> arbitrary nature of tribunal decisions.
>>
>> That report caused shockwaves not only in the civil society but also among
>> European policy makers.
>>
>> In January, the European Commission suspended negotiations with the US on
>> the ISDS provisions in the TTIP, and announced it would hold 90 days of
>> consultations with the public over the issue.
>>
>> In Australia, the previous government decided it would not have an ISDS
>> clause in its future FTAs and BITS, following a case taken against it by
>> Philip Morris International which claimed loss of profits because of laws
>> requiring only plain packaging on cigarette boxes.
>>
>> In Malaysia, the ISDS is one of the major controversial issues relating to
>> the TPPA.  Many business, professional and public-interest groups want the
>> government to exclude the ISDS as a “red line” in the TPPA negotiations.
>>
>> Prime Minister Dato’ Sri Najib Tun Razak had also mentioned investment
>> policy and ISDS as one of the issues (the others being government
>> procurement and state owned enterprises) in the TTPA that may impinge on
>> national sovereignty, when he was at the APEC Summit and TPPA Summit in
>> Indonesia last year.
>>
>> So far the United States has stuck to its position that ISDS has to be
>> part of the TPPA and TTIP.  However if the emerging European opposition
>> affects the TTIP negotiations, it could affect the TPPA as this would
>> strengthen the position of those opposed to ISDS.
>>
>> Meanwhile, we can also expect more countries to review their BITS.
>> Developing countries seeking to end their bilateral agreements with European
>> countries can point to the fact that more and more European countries are
>> themselves having second thoughts about the ISDS embedded in these
>> agreements.
>>
>>
>> Author: Martin Khor is the Executive Director of the South Centre.
>> Contact: director at southcentre.int.
>> To view other articles in SouthNews, please click here.
>>
>> For more information, please contact Vicente Paolo Yu of the South Centre:
>> Email yu at southcentre.int, or telephone +41 22 791 80 50.
>>
>> --
>>
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