Six Key Flaws In The EU's Proposed 'New' Corporate Sovereignty Court

from the only-six? dept

A few months back, Techdirt wrote about the European Commission's proposal to replace the traditional corporate sovereignty system -- generally known as "investor-state dispute settlement " (ISDS) -- with what it called the "Investment Court System" (ICS). That seemed to us little more than a re-branding exercise; now an international investment law scholar has weighed in on the issue with his own, rather more expert opinion. Gus Van Harten is Associate Professor at York University in Canada. According to his biography, he's written a book proposing:

the establishment of an international investment court to ensure independence and accountability in the international adjudication of regulatory disputes between states and investors.

Despite that -- or maybe because of that -- Van Harten is none too impressed with the European Commission's plans, as the title of his new paper makes clear: "Key flaws in the European Commission’s proposals for foreign investor protection in TTIP". He singles out six in particular.

1. ISDS is alive in the EC's proposals

As Techdirt noted back in September, ICS isn't really very different from ISDS. Van Harten points out one aspect of corporate sovereignty tribunals that really has no place in any "new and improved" approach:

ICS "judges" would continue to have a financial interest in future claims because they are still paid a (lucrative) daily fee in a context where only one side -- foreign investors -- can bring claims, they would continue to operate under the usual ISDS arbitration rules, they would not have to meet the requirements for judicial appointment in any country, and they would not even be barred from working on the side as ISDS arbitrators. I am prompted to say that, if ISDS is "dead", as some officials have claimed, then the EC’s ICS proposal reminds me of a zombie movie.

The second flaw:

2. The case still has not been made for foreign investor protection in the TTIP

Van Harten writes:

Any proposal to give special privileges or public subsidies to any economic actor -- here, the largest and wealthiest in the world -- calls for a strong justification based on clear evidence of the public benefit. The absence of such a justification and evidence has been a serious omission in the EC's proposals for foreign investor protection from the very start.

The third serious flaw is similarly without any justification on the part of the European Commission:

3. The EC's proposals are fundamentally imbalanced

That's because it gives investors huge privileges without any corresponding responsibilities. Van Harten has a practical suggestion for remedying that:

The EC should establish actionable responsibilities for foreign investors by allowing a host country or affected third party, such as a trade union or a local community, to bring a claim (or, more modestly, a counter-claim) against a foreign investor in the very same process that is used to enforce foreign investor protections. That is a basic test for evaluating balance in the EC's proposals.

The fourth flaw concerns one of the main claimed improvements of ICS over ISDS:

4. The EC's proposals put poison pills into the "right to regulate"

The European Commission has made much of the fact that its new ICS will enshrine the "right to regulate." In his paper, Van Santen explores in detail exactly why that claim is mere window-dressing. He even goes so far as to say:

These textual details greatly undermine the EC's proposal on the right to regulate and the right to change the legal and regulatory framework. Indeed, they suggest that the EC is pretending to protect the right to regulate, while leaving catches in the text that return us to the usual concerns about ISDS.

The fifth flaw concerns a point that many have made about ISDS in the context of TTIP:

5. The EC's proposal remains disrespectful of domestic institutions, including domestic and European courts

Here's why:

The EC's proposal is still premised on an assumption that EU and US courts are so flawed that foreign investors should be able to bring an ISDS claim without having to demonstrate that it would be unreasonable for the foreign investor to seek relief first in the courts

As well as being an insult to these rather well-developed legal systems, and the people who work in them, it also has some serious negative consequences:

Foreign investors can choose to avoid the [domestic] courts, they can turn back from the courts at any point to pursue ISDS instead, and they can use ISDS to seek compensation for a court's decisions at any level.

In other words, ICS gives investors the best of all possible worlds, while the rest of us:

must deal with the usual risks of democracy and regulation in the usual ways: by taking part in the democratic process, by buying insurance, by bargaining for strong dispute settlement clauses in their contracts with government, or by relying -- like everyone else -- on the [domestic] courts.

Finally, Van Harten points out that if the European Commission wants to fix a system it admits is broken, it seems to be going about things in the wrong way:

6. If the EC is serious about an international investment court, why is it proposing to expand ISDS in the TTIP?

He means a real international investment court, not the ICS, which is far from being that.

while the EC has signalled that it will work toward an fullblown international court to replace ISDS, if this is the goal then the EC’s sequencing appears backwards. Logically, the EC should be pushing to transform existing treaties so that ISDS is replaced with an international court before the EC goes to the U.S. with its proposals. In past, the U.S. government has not welcomed the idea of new international courts. The fact that the EC has done the opposite -- by floating a version of ISDS with the U.S. before pursuing a proper court with other countries -- seems to undermine the EC's credibility on the issue of an international investment court.

Van Harten's paper is particularly valuable at a time when the European Commission is trying hard to propagate the idea that the problem of corporate sovereignty in TAFTA/TTIP is now "solved" by its ICS proposal. Van Harten's analysis shows that is very far from the case, and that corporate sovereignty remains one of the most problematic aspects of a deal that is itself highly problematic.

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Filed Under: corporate sovereignty, europe, european commission, gus van harten, ics, isds, tafta, tpp, ttip

More Evidence Of How Copyright Makes Culture Disappear In A Giant Black Hole

from the more-distressing-data dept

A few years ago, we first wrote about the supposed missing black hole of culture due to copyright, based on some excellent research by Paul Heald, looking at the availability of new books on Amazon based on the years they were published. It produced this chart: As you can see, there are a bunch of recent books, then a huge drop off... until a sudden spike at 1922 -- also known as the year before which nearly all books are in the public domain. That giant gaping hole on the right side of the graph should be pretty distressing. It counters the totally false narrative by certain legacy copyright system supporters that copyright is necessary to get books published and also that without copyright, no one would bother to sell the works, because they could just be copied by others. But, more importantly, it shows how much important culture is totally locked up because of copyright law -- unable to be published by those who'd like to offer them, and not worth it for the copyright holders to actually publish.

Late last year, EU Parliament Julia Reda published a similar chart concerning the EU: That one also looked at books, in the same manner as Heald's original research. On top of that, Heald himself has continued to explore this issue, including comparing new books to used books and also looking at the music space.

Now we've got even more evidence of how copyright kills such culture. Europeana has taken a similar look at a large corpus of digitized works in Europe and mapped it out. Guess what? Despite being a totally different data set, the graphic looks astoundingly similar: Of course, the "black hole" in this case only goes back to the early 1940s, rather than the 1920s, because copyright terms in Europe tend to be life plus 50 rather than life plus 70, but there have been some efforts to change that as well.

Once again, this should raise serious questions about the problems of copyright term length. It seems fairly obvious that at their current length, copyright terms are actively suppressing a ridiculous amount of cultural output, much of it likely to be lost forever to history -- as by the time it actually goes into the public domain, it may not even exist any more. This is a pretty big problem -- especially given all the claims about how necessary copyright supposedly is for protecting culture. It seems fairly clear from these charts that it's frequently doing the opposite.

And yet... rather than fix this aspect of copyright law, policy makers seem to be focused on making it worse. The final version of the TPP agreement forces all countries who sign on to move to life plus 70 instead of life plus 50. It's likely that the TTIP agreement will include some similar provisions.

Every time we post these charts, we also post this chart from William Patry's book Moral Panics and the Copyright Wars, which showed the copyright renewal rates on various works in 1958 and 1959, back when you had to "renew" your copyright after 28 years. As the chart makes clear, for most types of works the copyright is clearly worth basically nothing after 28 years. Movies are the main exception, as are some maps and at least some musical compositions (this was in a time before sound recordings could even get a federal copyright, though I imagine those might have a decently high renewal rate, probably at least on par with musical compositions).

All of this should raise serious questions about why we have copyright terms that are so long when the vast majority of content doesn't value that protection and (more importantly) the clearly visible harm to culture and public knowledge created by such long copyright term lengths. And, again, it raises the question of why we don't move to a system whereby copyright holders should be required to renew their copyright at specific intervals, to make sure that such monopoly rights are still more valuable than the public interest in those works.

And, in the meantime, anyone pushing for longer copyright terms, given how much of this information is now out there, is outing themselves as someone who is clearly against the public interest and shouldn't be taken seriously. And that includes the current negotiators from the USTR who pushed strongly for the copyright expansion in the TPP in the face of all of this evidence.

Filed Under: black hole, copyright, copyright term, copyright term extension, culture, europe, public domain

Thomas Goolnik Really Wants To Be Forgotten: Google Disappears Our Post About His Right To Be Forgotten Request

from the we-await-next-week's-notification dept

Last week we wrote about receiving our very first Right To Be Forgotten notice from Google, disappearing an earlier post that talked about articles in the NY Times that had been disappeared thanks to other RTBF requests. Yes, someone used a RTBF request to remove our article about the RTBF which was referencing other articles that someone had removed via a RTBF request.

And... yesterday we received a notification that this new article was also chucked down the memory hole thanks to a RTBF request, so that anyone who searches on a particular name in Europe will no longer see that article either. At this point, it's fairly clear that it's Thomas Goolnik who is making all of these RTBF requests, as he's the only individual named. We don't think either of our articles should be removed even under the EU's laws that allow for a RTBF, because those laws only apply to out of date/irrelevant information, and the fact that Goolnik has just now made a RTBF request in an attempt to censor us and to edit his own Google results is not obsolete information and is entirely relevant and newsworthy.

I figure it's highly likely that it won't be long before we get a notice telling us that this article, too, has been removed, so I'd like to add a special note to the Google RTBF reviewer reading this post: We are purposely not mentioning the details of the original story that Thomas Goolnik would no longer like to be associated with. Even if you believe that information is no longer relevant, this article does not discuss that. Instead, it discusses newsworthy and relevant information about Thomas Goolnik today, which is that he's filing a series of right to be forgotten requests to Google on any story that mentions his attempts to use the RTBF to delete his history. The original EU ruling clearly states that that when a search engine is evaluating a RTBF request, that it should see if the data is "inadequate, irrelevant or no longer relevant, or excessive in relation to the purposes for which they were processed and in the light of the time that has elapsed." This is not about irrelevant information from the past. This is about what appears to have happened this week or last.

Filed Under: europe, right to be forgotten, thomas goolnik, thomas goolnik thomas goolnik, thomas goolnik thomas goolnik thomas goolnik
Companies: google

Google Disappears Techdirt Article About Right To Be Forgotten Due To Right To Be Forgotten Request

from the going-to-dredge-this-up-again dept

Well, well. Just a few days ago, we wrote about the fact that Google was being asked to "forget" articles about the right to be forgotten, under new right to be forgotten requests... and suddenly we've been notified that a Techdirt article about the right to be forgotten has been similarly stuffed down the memory hole*. The article in question, is our story from last fall about the NY Times writing about the right to be forgotten requests that resulted in NY Times articles disappearing from some searches. The NYT detailed what each story was about and it wasn't too difficult to figure out who was likely trying to make sure the articles were no longer linked to their names.

It would appear that one of those individuals similarly has sent in this request -- but that's completely bogus, as we'll explain in a moment. First up, the notice:

Due to a request under data protection law in Europe, we are no longer able to show one or more pages from your site in our search results in response to some search queries for names or other personal identifiers. Only results on European versions of Google are affected. No action is required from you.

These pages have not been blocked entirely from our search results, and will continue to appear for queries other than those specified by individuals in the European data protection law requests we have honored. Unfortunately, due to individual privacy concerns, we are not able to disclose which queries have been affected.

Please note that in many cases, the affected queries do not relate to the name of any person mentioned prominently on the page. For example, in some cases, the name may appear only in a comment section.

Despite the claim that it might be someone in the comments, that seems unlikely here. Remember, the NYT article suggested who may have made the original requests, and it appears that person was likely now trying to cover up that fact. One of the individuals that the NYT story original wrote about was one Thomas Goolnik. Here's what the NY Times wrote in its original piece:

One Times article that is being shielded from certain searches in Europe is a report from 2002 about a decision by a United States court to close three websites that the federal government accused of selling an estimated $1 million worth of unusable Web addresses. The complaint named three British companies, TLD Network, Quantum Management and TBS Industries, as well as two men who it said controlled the companies: Thomas Goolnik and Edward Harris Goolnik of London.

The case was later settled. Thomas Goolnik did not respond to messages left via social networking sites.

The NYT suggested that there was a decent likelihood that Thomas Goolnik made the original request. It seems likely that Goolnik made this new request as well. I just did a search from the US on US Google for Thomas Goolnik's name and the NY Times piece shows up as result number two. If you go to page two, the second item is our Techdirt story on the NY Times story. Yet, if you go to Google UK, neither story shows up when you search on Goolnik's name.

At first glance, perhaps this seems reasonable. If Google has decided that a lawsuit against a company supposedly controlled by Goolnik is no longer relevant for those searching on Goolnik's name, then it's potentially reasonable to delink those results (though I have trouble seeing how the factual information that the lawsuit happened and that Goolnik was associated with it is no longer relevant. It seems abundantly relevant.)

However, the second order censorship here is much more troubling. Because the story is no longer about some long ago event which Goolnik might now wish to have hidden away in the depths. It's about his actions less than a year ago of likely filing for a right to be forgotten request. It's that news that both the NYT and Techdirt were reporting on. And that's not some "irrelevant" tidbit from history. That's recent, factual reporting.

So I'm at a loss as to how this latest bit of censorship could possibly be legit. And it raises some of the many concerns about the whole "right to be forgotten" concept. Is it really just limited to the supposedly out of date and "irrelevant" information? Or is it now supposed to extend to any reporting on the new and very relevant information about using the whole right to be forgotten process.

There is no official appeals process, other than that we can share "additional information regarding this content" that we feel "Google should be aware of" which may make the company reconsider -- though it also says "we can't guarantee responses." So it's just a blind "hey, that's crazy" and hoping common sense prevails. Or, you know, we'll keep writing about this story, because it's newsworthy no matter what the EU Court of Justice thinks or whatever whoever sent the request things, whether it's Thomas Goolnik or someone else.

* To be clear, the article itself doesn't fully disappear from Google's index, it just means that anyone who searches on the name of the person who made the RTBF request will no longer have the article show up under that search. Other searches may still turn up the article.

Filed Under: censorship, europe, free speech, inception, right to be forgotten, thomas goolnik
Companies: google

If Google Shouldn't Apply EU's 'Right To Be Forgotten' Everywhere, Why Should It Apply US DMCA Takedowns Globally?

from the make-up-your-mind dept

Last week, Techdirt wrote about Google's refusal to comply with France's order to apply the "right to be forgotten" -- actually, a right to be removed from search results -- globally. Perhaps because the issue seems easy to understand, many have offered their opinions on the rights and wrongs of Google's move, both for and against. Writing in The Guardian, Julia Powles has provided a good summary of the two main positions. First, without the "right to be forgotten," the internet would become a "database of ruin":

Some meaningful rights to delist old, irrelevant or incorrect information from monolithic databases are important, in order to give us a small, imperfect measure of privacy and dignity. They offer a minor speed bump on asymmetric routes of power, like the one that says you have no rights or say over Google’s presentation of search results.

The opposing camp, which includes Jonathan Zittrain, says we must not give in to this natural desire to remove links in this way, because doing so would create a "Swiss cheese internet":

Even if we might see some merit in Europe’s data laws, Zittrain is not at all happy about them being used to carve holes out of Google search. To counter the database of ruin argument, he says we are creating a “swiss cheese internet”.

The nub of Zittrain’s concern is that the practice of shaping what stays and what goes from the database is hopelessly individualistic. By allowing the delisting of information that is incorrect, outdated or harmful for individuals, who knows what else will follow. It sets us on a path, Zittrain claims, where the internet becomes the lowest common denominator result of what all the world’s countries and courts are prepared to leave behind.

Both of these positions, and countless variations on them, have been expounded many times over the last few days, and Techdirt readers will doubtless have their own views. But Powles goes on to make a new and interesting point that connects the battle over the "right to be forgotten" with the copyright industry's war on sharing:

Google’s argument that "no one country should have the authority to control what content someone in a second country can access" is appealing, but it is also misleading. Currently, US copyright law is relied on to remove content from Google’s global index, no matter where an alleged incident occurs, and at a rate at least three orders of magnitude greater than partial delistings under data privacy laws. The respective rates of approval are 97% for 345 million copyright requests and 41% for one-quarter million privacy requests, in a comparative period.

Google's behavior here suggests that it is more important to enforce copyright takedowns globally than to do the same to protect personal privacy. That means the issue of "the right to be forgotten" is even larger than it seems at first sight. As Powles rightly notes:

The complex challenges involved in global enforcement of laws demand us to ask what kind of society we want to live in. Are trademark and copyright law really that black and white? Is it appropriate for global brands to block sites on the other side of the world, which are neither ambiguous in their origin or misleading to consumers, and may engender creativity and meaning in their own right? Can we balance, with equal force, human rights as much as economic rights?

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Filed Under: copyright, dmca, eu, europe, free speech, global, jurisdictions, right to be forgotten, takedowns, world
Companies: google

Google To French Regulators Looking To Expand 'Right To Be Forgotten' Globally: Forget About It

from the forget-you dept

Earlier this summer we wrote about some ridiculous demands coming out of France, asking that Google expand the "right to be forgotten" globally. As you hopefully already know, last year, a European court came out with a troubling ruling that required Google into a sort of "right to be forgotten" situation, where links associated with someone's name that were magically deemed no longer relevant, needed to be "de-linked." Google reluctantly complied, and has since been busy de-linking many individuals from totally factual news stories about them. But, given that this was the law in Europe, it only did so in Europe.

That resulted in the complaint from France -- to which Google has now responded by saying it will not comply with a global right to be forgotten, because the results would be catastrophic for free speech and the open internet:

This is a troubling development that risks serious chilling effects on the web.

While the right to be forgotten may now be the law in Europe, it is not the law globally. Moreover, there are innumerable examples around the world where content that is declared illegal under the laws of one country, would be deemed legal in others: Thailand criminalizes some speech that is critical of its King, Turkey criminalizes some speech that is critical of Ataturk, and Russia outlaws some speech that is deemed to be “gay propaganda."

If the [French regulator's] proposed approach were to be embraced as the standard for Internet regulation, we would find ourselves in a race to the bottom. In the end, the Internet would only be as free as the world’s least free place.

We believe that no one country should have the authority to to control what content someone in a second country can access. We also believe this order is disproportionate and unnecessary, given that the overwhelming majority of French internet users—currently around 97%—access a European version of Google’s search engine like google.fr, rather than Google.com or any other version of Google.

I can't see into the future, but I'll take a wild guess and suggest that the French regulators aren't going to just back down following this response, no matter how reasonable and rational it is. European regulators continue to seem to think the internet can be twisted, censored and molded in their own interest, and don't seem to understand just how badly that will backfire. It's likely that this simple explanation will fall on deaf ears and there will soon be a big fight over this. Stay tuned.

Filed Under: censorship, europe, france, free speech, global, right to be forgotten
Companies: google

Everyone's A Bad Guy: German Regulator Orders Facebook To Drop Its Stupid 'Real Name' Policy

from the sigh dept

While it seems that too many people and organizations think that the problem with the internet is too much anonymity, there are those who see the opposite as being the case. Google, for instance, at one point instituted a "real name" policy for its platforms, arguing that areas like the comments section on YouTube, which required a real name login, would be worlds better if only everyone had to put their real names on their comments. It was a dumb idea for several reasons, including the complete unworkability of the policy and the fact that, haha, nothing can clean up YouTube's comments section, you silly fools. For these reasons, Google eventually dropped the policy and restored anonymity on its platforms, and yet somehow the world kept turning.

Facebook too has adopted a real name policy and it's been every bit as effective at tamping down unruly behavior. Which is to say that it hasn't. At all. And, in the meantime, valid reasons for wanting to be anonymous online are thrown by the wayside. As it turns out, one German privacy watchdog group considered this an important enough issue to go on the muscle and declare that Facebook must allow anonymous accounts on its platform. Per Bloomberg:

Facebook Inc. was ordered by a German privacy watchdog to allow users to have accounts under pseudonyms on the social network. Facebook may not unilaterally change such accounts to the real names of users and may not block them, Johannes Caspar, Hamburg’s data regulator, said in an e-mailed statement. The company, whose European headquarters are in Ireland, can’t argue it’s only subject to that country’s law, he said.

“Anyone who stands on our pitch also has to play our game,” said Caspar. “The arbitrary change of the user name blatantly violates” privacy rights.

Let's be clear: anonymous speech is an ideal I think everyone should embrace. That said, this move by the regulator is simply another step in an ongoing trend in which European companies appear to want to wield a heavy regulatory hammer on foreign, and especially American, companies. And that trend isn't a good one for a whole host of reasons. Nationalism when it comes to an internet that by definition ignores borders is going to create havoc in an online world that feeds off of open speech and communication. While privacy rights are a laudible goal, creating a patchwork of regulatory rules for companies whose business is the internet is certainly not. And European targeting of American companies in this respect is only going to create a regulatory proxy war that nobody will benefit from.

The most disappointing part of all of this is that this particular story never would have happened if Facebook, with its American roots, had simply stood up for basic American ideals, of which anonymous speech is counted. You simply can't even graze the history of America without encountering the immense importance of anonymous speech, from the publication of Common Sense to the Supreme Court's recognition of it being a basic American ideal. For Facebook to open the door to regulatory abuse by a foreign nation by not honoring this heritage is extremely disappointing. Facebook's reaction to this news is as maddening as it is nonsensical.

“The use of authentic names on Facebook protects people’s privacy and safety by ensuring people know who they’re sharing and connecting with,” the company said in an e-mailed statement.

Ensuring people's privacy by taking away part of that privacy is an interesting theory in that it's self-contradictory on its face. Like I said, there are no good guys in this story, mostly because Facebook has ensured it won't play that role.

Filed Under: anonymity, europe, germany, real names, regulations
Companies: facebook

EU Proposes To Reform Corporate Sovereignty Slightly; US Think Tank Goes Into Panic Mode

from the who's-afraid-of-a-little-rebranding? dept

Back in May, we wrote about the European Commission's sharing "concerns" about corporate sovereignty chapters in trade agreements. The Commissioner responsible for trade, Cecilia Malmström, even went so far as to say that the present investor-state dispute settlement (ISDS) system was "not fit for purpose in the 21st century." But rather than removing something that is unnecessary between two economic blocs with highly-developed and fair legal systems, she instead proposed to "reform" it, and to start working towards an international investment court.

That idea was dismissed almost immediately by the US Undersecretary for International Trade at the Commerce Department, Stefan Selig. Despite that, the EU seems set on replacing today's corporate sovereignty with some kind of court. In a non-binding but important set of recommendations to the European Commission regarding TTIP, the European Parliament called for the following:

to ensure that foreign investors are treated in a non-discriminatory fashion, while benefiting from no greater rights than domestic investors, and to replace the ISDS system with a new system for resolving disputes between investors and states which is subject to democratic principles and scrutiny, where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism, where consistency of judicial decisions is ensured, the jurisdiction of courts of the EU and of the Member States is respected, and where private interests cannot undermine public policy objectives;

The wording is extremely vague, and leaves plenty of room for a kind of ISDS-Lite to be agreed between the EU and US in TAFA/TTIP. Many in Europe regard the proposal as little more than a face-saving compromise that allows the opponents of ISDS to claim that "this is the end of ISDS in trade deals," while allowing supporters to maintain that it has merely been re-branded, rather than removed.

We don't know what the US government thinks of the idea, but we do have a fascinating post on the proposal from The Heritage Foundation, which describes its mission as "to formulate and promote conservative public policies based on the principles of free enterprise, limited government, individual freedom, traditional American values, and a strong national defense." Its views on the EU's corporate sovereignty reforms are quite clear:

The EU's proposal, backed by a vote of the European Parliament on July 8 -- that the TTIP should establish a permanent investment court, not an ISDS mechanism -- is a bad solution in search of a non-existent problem. ISDS mechanisms work well to secure basic legal protections for a signatory state's nationals abroad. The U.S. should firmly reject the EU's proposal and insist that TTIP establish an ISDS.

The rest of the post provides rare insights into the thinking of the pro-ISDS, pro-big business camp in the US. Bizarrely, it describes corporate sovereignty tribunals as:

designed to safeguard fair, unbiased, and transparent legal processes by providing independent and impartial arbitration.

That's an odd description of processes that take place in secret, with no case law to guide decisions, no limits to damages, no right to appeal, and where the tribunal members are corporate lawyers who can also act for the same companies that appear before them in other cases, because there are no rules governing conflicts of interest. But more interesting than this topsy-turvy view of reality is the following revealing comment:

because any case inside the EU can ultimately reach the European Court of Justice (ECJ), and the ECJ is mandated to make decisions that promote deeper European integration, it is not clear how the U.S. can rely on the ECJ to rule fairly when the EU seeks to promote integration in ways that discriminate against the U.S.

Essentially, then, The Heritage Foundation objects to Europe's highest court doing its job of strengthening the European Union, and wants supranational corporate sovereignty tribunals as an option to overrule its judgements -- confirming critics' worst fears about ISDS undermining democracy. The post then goes on to list a number of problems that the Foundation sees with the EU's proposed international investment court, many of which again display a curious inversion of reality. For example:

[an investment court] would have limited accountability and few checks and balances.

That is precisely the situation with corporate sovereignty tribunals, which have no checks or balances, and no limits to their power, as clearly shown by the $50 billion award made against the Russian government last year. The post concludes:

The EU is advancing this proposal in a futile and wrong-headed effort to win over critics who are fundamentally skeptical about freer trade. These critics had not previously raised any objections to the many ISDS mechanisms to which EU nations are already party: They began to complain only when the U.S. became involved.

That's true, because previous trade agreements incorporated ISDS as a mechanism for rich Western countries -- including those in the EU -- to use to sue poor, developing countries. Since the latter had few, if any, investments in the Western countries, there was little or no risk that they would use corporate sovereignty against the richer nations. TAFTA/TTIP changes that situation dramatically. Both the US and EU have huge investments in each other: the European Commission estimates them as more than $1.75 trillion dollars in both directions -- a clear demonstration ISDS is not needed in order to encourage investors. If there is a corporate sovereignty chapter in TTIP, tens of thousands of companies on both sides of the Atlantic will gain the power to sue governments over policies they claim could impact their future profits adversely.

That is why critics have raised the issue now, and partly why the EU has proposed moving away from such a manifestly flawed approach. Given that it believes in "a strong national defense," it's curious that The Heritage Foundation is desperate to preserve a system that gives foreign investors such a powerful weapon to use against America.

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Filed Under: corporate sovereignty, eu, europe, european commission, isds
Companies: heritage foundation