MPs criticise TTIP on corporate courts and lack of transparency

A committee of MPs released a report today on TTIP (the Trans-Atlantic Trade & Investment Partnership) – the trade agreement being negotiated in secret by the EU and the USA. The House of Commons Environmental Audit Committee’s report focuses on the risks posed to the environment by TTIP.

But they also raise serious concerns about the transparency of the negotiations and ISDS (Investor-State Dispute Settlement) – a measure allowing foreign companies to sue the European Union and/or Member State governments if they pass laws which would negatively affect their future profits.

ORG shares these concerns and has raised them in the past.

On ISDS, the committee flags up that neither the UK Government nor the EU has presented a convincing case for the inclusion of ISDS. They also raise concerns about the chilling effect of ISDS on future legislation.

EU states must retain their ‘right to regulate’, but a TTIP treaty text that enshrines such a safeguard will be meaningless if the prospect of ISDS litigation produces a chilling effect on future regulation-setting. A compelling case for the inclusion of an ISDS in TTIP has not yet been made, and there are unresolved doubts about how well international arbitration courts would operate. If there is to be an ISDS, the parties will need to agree a robustly framed one which prevents unwarranted litigation, adopting the lessons from the recently negotiated ISDS provisions in the EU/Canada trade treaty, to circumscribe the terms on which litigation could be initiated against policies to improve environmental or health protections. (page 19-20)

Many people are concerned that Governments could be discouraged from passing new legislation due to ISDS. If the Government passed legislation that would impact on a foreign company’s profits, it would risk having to pay to defend itself at a tribunal and then paying out compensation if it lost the case. The Department for Business argued in its representation to the committee that there is no cause for concern but the committee’s disagreed and concluded that ISDS could produce a chilling effect.

On transparency, the committee is concerned that the secretive nature of the negotations makes it impossible to judge whether the risks to environmental safeguards are being dealt with. This is exactly the same problem that we have with digital rights issues in TTIP. We know that negotiations are happening on our issues but because of the lack of transparency we cannot fully analyse whether the risks to our digital rights are being adequately handled.

TTIP potentially presents risks for environmental safeguards, as we have described in this report, but there is also scope for these to be satisfactorily addressed. That depends on the detail of the deal that is struck. At the current stage in the negotiations there is not the transparency needed to be able to reach a view on whether such risks will be dealt with. EU member states, including the UK, will need to be more closely involved in the negotiations from now on, and engage in turn with environmental groups and agencies, to ensure that environmental issues are adequately considered. The next Government should ensure that the public and the House are given a full and timely opportunity to scrutinise the draft terms of any TTIP settlement before it is a done deal. (page 23)

The committee’s sentence at the end of that quote speaks to one of ORG’s major concerns. We do not want a situation where the first time we can properly scrutinise a trade agreement negotiated on our behalf is when the terms of the agreement are already locked up. It is undemocratic to decide on important trade measures behind closed doors.

We hope the British Government and the European Commission will take on board the recommendations of this House of Commons report.