New Leak Reveals Proposal To Extend Corporate Sovereignty Massively To Include Intra-EU Investments
from the most-toxic-acronym-in-Europe dept
As Techdirt has reported, the public backlash against corporate sovereignty in TAFTA/TTIP was so strong in the EU that the European Commission was forced to come up with Plan B. It now wants to replace what has been called "the most toxic acronym in Europe" -- ISDS, which stands for "investor-state dispute settlement" -- with ICS: the investment court system. That was little more than a re-branding exercise, since most of the key flaws remained, but at least it suggested that the European Commission recognized that corporate sovereignty had become a serious problem that needed to be addressed. However, it seems that others didn't get that memo -- or, more likely, just don't care what the EU public thinks. A new leak reveals that a group of EU governments want to extend the use of ISDS, and to embed corporate sovereignty even more deeply in the fabric of the European economy.
The plan by the five countries -- Austria, Finland, France, Germany and The Netherlands -- is to give corporate sovereignty rights for all cross-border investments made within the EU. That would allow EU companies to challenge EU governments over things like local health and safety laws, or environmental regulations, with the public paying for any losses in the ISDS tribunals. The original rationale for corporate sovereignty was to protect only foreign investors when they put money into a country; this has been turned on its head in a so-called "non-paper", now leaked, which calls for domestic investors to enjoy the same special extra-judicial rights (pdf). The background to this extraordinary idea is a move last year by the European Commission to terminate some old bilateral investment treaties (BITs) between European Union members:
Many of these intra-EU BITs were agreed in the 1990s, before the EU enlargements of 2004, 2007 and 2013. They were mainly struck between existing members of the EU and those who would become the "EU 13". They were aimed at reassuring investors who wanted to invest in the future "EU 13" at a time when private investors -- sometimes for historical political reasons -- might have felt wary about investing in those countries. The BITs were thus aimed at strengthening investor protection, for example by means of compensation for expropriation and arbitration procedures for the settlement of investment disputes.
As the European Commission rightly points out, one of the key points about the EU is that it offers the same protection to all EU investors, wherever they are based, and wherever they put their money in the European Union. And yet, rather than complying with that call from the Commission, the five countries involved in this new plan want to go in precisely the opposite direction. The leaked "non-paper" even has the gall to use the biased nature of ISDS as a reason to extend it yet further:
Since enlargement, such 'extra' reassurances should not be necessary, as all Member States are subject to the same EU rules in the single market, including those on cross-border investments (in particular the freedom of establishment and the free movement of capital). All EU investors also benefit from the same protection thanks to EU rules (e.g. non-discrimination on grounds of nationality). By contrast, intra-EU BITs confer rights on a bilateral basis to investors from some Member States only: in accordance with consistent case law from the European Court of Justice, such discrimination based on nationality is incompatible with EU law.modern guarantees on investment protection are necessary to the level playing field for EU-investors vis-à-vis their foreign competitors, to ensure the continued availability of competitive financing terms for EU-investors and to promote intra-EU investments. The dismantling of intra-EU BITs will be perceived by investors, banks and creditors alike as an overall decrease in the legal protection for EU investors and create a competitive advantage for foreign investors who can rely on clearly defined and uniform protection standards under the forthcoming EU agreements or on Member States’ BITs. If EU investors are not afforded comparable protection as their foreign competitors, incentives for EU investors to locate their foreign investments outside the EU will be created and the functioning of the internal market will be compromised.
By an amazing coincidence, in February the Business Europe lobby group sent a letter to the European Commission calling for corporate sovereignty to be extended to intra-EU investments. It's not hard to guess why there is this sudden push from countries and companies. As Techdirt has reported, the corporate sovereignty provisions are without doubt the most contentious part of the proposed TAFTA/TTIP agreement, and many are demanding that they be dropped completely. The introduction of corporate sovereignty for all intra-EU investments would allow supporters of ISDS in the EU-US trade agreement to argue that the same protection must be offered to US companies investing in the EU -- the perfect circular argument.
The reverse is also true, as the leaked document itself recognizes:
If one postulates that such provisions are not required within the EU due to the very nature of the internal market or to the level of development of EU Member States, it would then be even more difficult to argue in favour of investment chapters within the TTIP or other FTAs with developed countries.
But the European Commission is indeed arguing that such provisions are not needed in the European Union. Awkward.
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Filed Under: corporate sovereignty, eu, intra-eu, isds
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But again, the main question is why it should be necessary at all to have ISDS between developed nations with strong court/law systems.
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"The ultimate political triumph of European institutions and of austerity over the Greek government, [Yanis] Varoufakis believes, is producing a vicious cycle of recession and further political repression."
"These decisions, because they are never checked by a democratic process, tend to be extremely bad," Varoufakis told Global Research. "No one asks the question: 'How can we make life better for Europeans?'. The question they usually ask in Brussels and in Frankfurt is: 'How can we pretend that our previous policy did not fail?'"
Source:
http://www.aljazeera.com/indepth/features/2016/03/yanis-varoufakis-eu-democracy-160328 120300393.html
It's a problem that Americans should be familiar with, as it also seems to be the Standard Operating Procedure in Washington.
An extract from Varoufakis's Europe after the Minotaur, can be 'purchased' as a small Kindle book for $0.00 (that's not a typo). Just search for 'Varoufakis' on Amazon.
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The most ridiculous part of this is...
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The optimistic view
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They've learned from past experience that if you're going to screw the public over you have to hide it until there's no way to stop it from happening, as if the public has time they might be able to successfully derail years of backroom deals meant to benefit private companies at the cost of the public.
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We have people on welfare working for €1($1.1) per hour because unless they take this work they won't receive any welfare at all. And given once you are out of a job you have to sell everything you own up to about €2000 before receiving welfare that means those people can't choose to say no, even for one month. Apartment €500+, food €300+, electricity €50+, car rent+tax €200+ and this is for a single living alone at low rent.
Which leaves us with a workforce of about 15 million people working for less than it takes to feed them. All while the Gov pays their wages and the private companies making the profits. It became a saying in the EU: nationalize losses, privatize gains. Which is the exact thing happening here.
And because the upper, high income class can reduce their tax from official 40+% to a about 10% it is the mid class that is paying for most of these 1 Euro jobs. But the fun part is, the Gov plays the mid class vs the lower class to make them work harder.
If you ask me, we life in a corp. governed world. Funny enough some international organization said that corps have too much influence on the German Gov. I guess Germany being one the more influential countries in the EU and corps having direct access to all TTIP meetings and actors is a coincidence.
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Yes, this was (and still is, I think) the official explanation for the secrecy. They usually phrase it a little differently, though. The line is that trade deals have to be negotiated secretly because there will always be strenuous objections from the public no matter what the deal contains. Those objections would derail the entire process because the fighting would never end.
It's a clever piece of bullshit.
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I agree it's bullshit. I'm not sure how clever it is though as it's fairly obvious, to me at least. I'd more call it arrogant. Like giving the public the big middle finger and laughing about it.
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