CETA investment reforms won’t prevent corporate attacks on health and environment

April 19, 2016

Canadian Centre for Policy Alternatives, Corporate Europe Observatory, Friends of the Earth Europe, Forum Umwelt und Entwicklung (German Forum on Environment & Development) and the Transnational Institute

BRUSSELS, AMSTERDAM, BERLIN, OTTAWA – Dangerous attacks against regulations protecting the public interest and the environment would not be prevented by the European Commission’s new investment protection proposals for future trade agreements, according to a new report.  These EU proposals were recently incorporated into the Canada-EU Comprehensive Economic and Trade Agreement (CETA), which Canadian Trade Minister Chrystia Freeland has called a “truly gold standard” agreement.

Developed by Friends of the Earth Europe, Transnational Institute, Corporate Europe Observatory, the Forum Umwelt und Entwicklung, and the Canadian Centre for Policy Alternatives the report tests the European Commission’s promise that the Investment Court System, its new framework for investment protection, will protect governments’ right to regulate.

Five iconic and controversial investor-state dispute settlements, where environmental and public health protections have been attacked, are reviewed through the lens of the Investment Court System, promoted during negotiations on a Transatlantic Trade and Investment Partnership (TTIP), the EU-Canada Comprehensive Trade and Economic Agreement (CETA), and the EU-Vietnam agreement. The report finds that all five disputes could still happen under the proposal, which falls short of safeguarding governments’ right to regulate.

Scott Sinclair, CCPA’s senior trade researcher, said: “The supposed protections for the right to regulate in CETA and TTIP are window-dressing.  For-profit adjudicators will still be applying the same deeply flawed and imbalanced investor rights.  And, as these case studies show, the results will be the same - foreign corporations are empowered and the public interest suffers.” 

These cases include:

  • Philip Morris vs Uruguay for the introduction of graphic warnings on cigarette packages and other tobacco control measures to promote public health;
  • TransCanada vs USA for Obama’s decision to reject the Keystone XL pipeline as part of the US’ commitment to tackle climate change;
  • Lone Pine vs Canada for a precautionary fracking moratorium enacted in Quebec;
  • Vattenfall vs Germany for Hamburg city’s imposition of environmental standards for water use at a coal-fired power plant;
  • Bilcon vs Canada for an environmental impact assessment that prevented the construction of a large quarry and marine terminal in an ecologically sensitive coastal area.

Cecilia Olivet, researcher at the Transnational Institute, said: “The European Commission has repeatedly said that it has listened to public concern and that its new Investment Court System (ICS) will prevent corporations’ blatant attacks on health, environment and democracy. Our study shows that this is patently false. We put ICS to the test and it fails on every count. Public resistance to TTIP and other trade agreements won’t be bought off with sham reforms. We need a removal of ISDS provisions from any impending trade deal.”

The European Association of Judges and the Deutscher Richterbund have also criticised the “Investment Court System”, pointing to a potential lack of legal basis for its establishment and affirming that the provisions for the election, time of office and remuneration of the “judges” do not meet the minimum standards for judicial office.

If the European Commission is serious about its promise to protect citizens and the environment, it will put an end to private arbitration, starting with the removal of investor-state dispute settlement provisions – under whichever label – from the TTIP, CETA, and the EU-Vietnam trade agreements.


Investment Court System put to the test: New EU proposal will perpetuate investors' attacks on health and environment is available on the CCPA website: http://policyalternatives.ca

For more information contact Kerri-Anne Finn, CCPA Director of Communications, at 613-563-1341 x306.