OPP Meeting summary: EP Plenary – Negotiations for a Convention establishing a multilateral court for the settlement of investment disputes (29 November 2017)

A summary of the debate with a focus on the Commission and representatives of the political groups is now available.

EP Plenary – 29 November 2017
Negotiations for a Convention establishing a multilateral court for the settlement of investment disputes (MIC)
View the Oral question

The author of the question, Bernd Lange (S&D, DE), made the following remarks

  • a large majority in the Parliament had been in favour of setting up a MIC because they had recognised that the old Investor-state dispute settlement (ISDS) had to be abolished, due to many weaknesses, such as a lack of transparency, a lack of possibilities of revision and big business cases for lawyers;
  • consequently, the Parliament had ensured that the EU-Canada Agreement established a different system of courts, a functioning revision system and full transparency;
  • both partners had pledged to promote a strong MIC and the first United Nations Conference on Trade and Development (Unctad) Conference had shown that many technical meetings had already taken place, providing possibilities to end the old ISDS treaties;
  • to support this development, the S&D Group had asked the oral question to better understand the remaining challenges, counterarguments and restrictions, such as possible reluctancies from countries to sign the Unctad Convention on transparency;
  • other remaining uncertainties concerned the impact on other 1,200 European bilateral investment agreements and the Energy Charter, signed by the EU, comprising an ISDS;
  • he pointed out the hypocrisy of criticising future agreements while the old ones were still in place, naming Spain as the country which had been most sued under the ISDS provisions;
  • another issue, often criticised in Germany, was how the national redress procedures could be fully exhausted before calling on the MIC.

Commissioner for Trade, Cecilia Malmström, made the following remarks

Interventions followed from representatives of the political groups

Christofer Fjellner (EPP, SE)

  • criticised the lack of progress on establishing the MIC which had been on the Commission’s agenda for several years;
  • pointed out that 161 countries already used ISDS and that with the MIC the EU tried to “re-invent the wheel” which might end up like the system it tried to replace;
  • the issue had become political on the EU level which unnecessary complicated the process;
  • the EU even attempted to turn investment dispute settlement into a global problem instead of letting problems be resolved by the ISDS system in place;
  • instead he called for a reform of the ISDS system.

Inmaculada Rodríguez-Piñero Fernández (S&D, ES)

  • 1,400 dispute settlements concerned the EU and the private arbitration mechanism from the 1950’s continued to be used between investors and states, undermining the democratic principles by questioning decisions taken by governments acting in the general interest without any legal basis or repeal mechanisms;
  • the S&D Group was completely opposed to the ISDS system, as shown by the Groups efforts which had led to the re-opening of the CETA negotiations;
  • the MIC was a better system as it protected investors by forcing countries to implement the same rules, controlled by the same judges, and by using a transparent system and code of conduct;
  • the Commission had done a great job in harnessing international support for the MIC;
  • called for the creation of appeal mechanisms for SMEs, for possibilities for all parties including civil society stakeholders to issue observations, as well as for clarifications on national redress procedures and on transition periods.

Notis Marias (ECR, EL)

  • multinationals were not paying taxes were they were generating the revenue and business was transferred to where it was the cheapest;
  • in addition, ISDS already existed in CETA and TTIP and since national jurisdictions and courts played an important role there was investment protection;
  • therefore, multinationals used multinational courts to continue dodging taxes.

Marietje Schaake (ALDE, NL)

  • welcomed Commissioner Malmström’s efforts to promote rules-based trade;
  • key concerns were the need for more transparency, the need for an appeals mechanism, and also the risk of conflicts of interest for adjudicators or arbitration judges, which is why, the multilateral investment court system addressed these main concerns by replacing the controversial ISDS mechanism;
  • asked for more information on the specific needs of SMEs, on what happened to existing intra-EU bilateral investment treaties still in place and on the proposed organisational nature.

Anne-Marie Mineur (GUE/NGL, NL)

  • 150,000 people had informed the Parliament that ISDS was completely unacceptable, which showed that MIC was needed as a slightly better option;
  • however, it was still a small, independent body allowing foreign investors to claim billions from governments acting in the general democratic interest, without imposing any requirements on the investors, without establishing independence for third parties or testing in terms of international or national law;
  • she called on the EU to ensure that investors respected international agreements signed by the EU, such as the Paris Agreement, and to open the MIC for states and bodies like trade unions, allowing them to sue investors;
  • progress on these issues had to become a prerequisite for EU membership to the MIC and the Court of Justice had to rule on the compatibility with EU law.

Heidi Hautala (Greens/EFA, FI)

  • therefore, she welcomed that the Commission was finally ready to replace  the old-style ISDS system with the permanent MIC;
  • the key question for public trust was: what improvements will this multilateral investment court bring in terms of access to dispute settlement for states, and affected third parties who were often completely denied access to justice;
  • the MIC only improved the technical and procedural problems of the investment court system;
  • consequently, the EU had to build a court allowing states and affected third parties to also bring cases and a court that protected states’ and citizens’ rights, not just investors’ rights;
  • Otherwise, the EU was not providing trade for all, but only for the privileged few.

Tiziana Beghin (EFDD, IT)

  • the MIC was an ‘international tribunal’ far worse than the old ISDS system, by allowing multinationals to sue European governments without any clear legal interpretation of international law on investors’ rights;
  • democratic parliaments had to define those rights instead of an international court;
  • decisions of bilateral courts only affected the concerned parties whereas a big multilateral court set legal precedents and definitions for international law, as stated by the German association of judges;
  • the fact that national investors had to seek redress in the national legal systems, whereas international investors could seek the ‘speedy’ justice of the MIC, produced massive discriminations;
  • instead, she called for the creation of an international court dealing with the crimes committed by multinationals against citizens.

Commissioner for Trade, Cecilia Malmström, made the following remarks

Source: One Policy Place

The simultaneous interpretation of debates provided by the European Parliament serves only to facilitate communication amongst the participants in the meeting. It does not constitute an authentic record of proceedings. One Policy Place uses these translations so this text is only a guide and should not be relied on as an official account of the meeting. Only the original speech or the revised written translation of that speech is authentic.

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