“New” ISDS system no solution to fundamental problems

17 September 2015

“New” ISDS system no solution to fundamental problems

European Commissioner Cecilia Malmström is continuing down the wrong path with her arbitration system – the Investor State Dispute Settlement system (ISDS), according to SP Euro-MP Anne-Marie Mineur. Mineur’s reaction came in response to the elaboration of the plans, which Malmström published today. She sees no improvement, she says, in comparison to the Commission’s previous version. Referring to respondents to the Commission’s ‘consultation’, she said that “the fundamental criticism from 150,000 people was that the ISDS represents a separate system of justice for foreign corporations, and this has not changed. The improvements are purely cosmetic. Malmström must scrap the ISDS. It’s not needed.”

Commissioner Malmström has proposed a number of improvements: arbitrators will be forbidden to work on other cases while working on an ISDS case, and they will not be appointed by the parties to the dispute, but solicited jointly by the US and EU. “The fact that Malmström is tackling such blunders is of course a fine thing, but that isn’t the kernel of the problem. That the system now includes the possibility of an appeal sounds good, but there’s still no chance of taking a case back to our own system of justice, which would test the matter independently against democratic laws. And that foreign investors must choose once and for all between the normal system of justice and arbitration is completely incomprehensible. Why not simply follow normal legal procedures, which is what national firms have to do?”

Mineur last week put a number of questions to the Commission on the legality of the ISDS. Despite the fact that there is clear cause to do so, the Commission refuses to test the system against EU legislation. The SP Euro-MP also drew attention to the fact that the ISDS is indicated in the trade and investment treaty with Canada. US corporations operating a mailbox company in Canada will thus be able to call on a clause on the ISDS which is described by Malmström as ‘outmoded.’ Malmström refuses to renew negotiations with Canada and is risking thereby a clash with the European Parliament.

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