International Investment Court System (ICS) - EU
Public Services International (PSI) has joined a growing number of voices pointing out that the new wave of so called “trade agreements” no longer have much to do with trade. Rather, these secret agreements create binding laws, away from democratic parliamentary institutions, to give rights to foreign investors and the largest multinational corporations. The Investor State Disputes Settlement (ISDS) system whilst not the only troubling aspect of these agreements has become an icon of the shameless extent to which governments have pandered to corporate interests by giving foreign corporations rights that neither local citizens nor local businesses have. Rights which do not exist to protect labour, the environment, nor most human rights. PSI has commissioned research as the ECs proposal is intended to be used in all future trade agreements to which the EU is a party (including its Economic Partnership Agreements) and it is important that we have a global worker’s analysis of the proposal.
The research exposes that there is no body of evidence that shows that investment courts create economic growth, particularly in developing countries. But they often harm fragile governments and undermine the development of independent legal systems in developing countries most in need. In 2003, the Czech Republic paid a corporation US$354 million, then the equivalent of the country's health budget. Ecuador has just started paying US$1.1 billion to a US-based oil company – 90% of its social welfare expenses budget for 2015. As inequality, austerity and unemployment rise, anger understandably grows with a system that gives 94.5% of known awards to companies with at least US$1 billion in annual revenue or to individuals with over US$100 million in net wealth.
The ICS has removed some of the worst excesses of ISDS. However, as this analysis reveals, it still leaves Europe desperately vulnerable to foreign corporate attacks. Currently only 1% of US-based investment is covered. ICS in the Trans-Atlantic Trade and Investment Partnership (TTIP) would increase this exposure from 1% to 100% - enabling a flood of legal cases against European governments. The inclusion of the ICS in the EU trade agreement with Canada (CETA) would expose European countries to corporate attacks from the 80% of USA multinationals who have a commercial presence in Canada. A massive increase from the current 1%. PSI believes that the ICS does not represent a great step towards just trade agreements. But it does remind us that our leaders are vulnerable to political pressure when unions and our allies are well informed and active.
It is now up to our labour movements to ensure we educate our members and our leaders.