Belgium asks European Court on legality of investment protection in CETA

6 September 2017

Friends of the Earth Europe welcomes the decision of the Belgian government to file a request for an opinion to the European Court of Justice on the Investment Court System (ICS) included in the EU-Canada trade deal CETA [1]. The ECJ will now examine if the ICS is compatible with the European Treaties. An opinion from the Court finding an incompatibility would put the future of the CETA ratification in doubt.

The decision follows a commitment to clarify the legality of the ICS, agreed on after strong opposition by the Walloon and four other regional governments in Belgium to the CETA deal. European law experts have warned that the investment tribunal included in CETA would undermine the autonomy of the EU legal order and is therefore not compatible with the European Treaties. [2]

Paul de Clerck, Economic Justice programme coordinator at Friends of the Earth Europe, said: 'Trade agreements that allow investors to go to special tribunals and side-line ordinary courts are not acceptable. We welcome the fact that the European Court of Justice will now decide on the legality of the Investment Court System. If it finds this system to be in contravention of EU law, it will be the end of CETA as we know it.'

The European Commission decided to reform its proposal for investment protection in trade agreements after the Investor State Dispute Settlement (ISDS) system came under fire. ISDS allows foreign investors to sue governments in unaccountable and non-transparent corporate tribunals if a government measure could harm their profits. Examples include challenges of government decisions to phase out nuclear power or ban fracking.

The ICS system, included in EU trade agreements with Canada and Vietnam, introduces small procedural improvements but does not address the fundamental problems of the system. They include the fact that the mechanism is only available to foreign investors, does not include any corresponding obligations, still allows investors to seek compensation for legitimate public policy measures and side-lines domestic courts. [3] Investment tribunals such as the one included in CETA are opposed by a broad range of civil society organisations and trade unions.

 

NOTES

[1] Minister Reynders submits request for opinion on CETA

[2] Statement by the German Association of Judges
Letter signed by over 100 law professors

[3] For more information on the criticism of the Investment Court System see: "ISDS: Courting Foreign Investors"; "Investment Court System: ISDS in Disguise"; "CETA: Trading Away Democracy"

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