Rosia Montana, an omen for TTIP

[magical thyme]

31. excerpts from analysis of leaked text of ISDS chapter of TPP

http://citizen.org/documents/tpp-investment-leak-2015.pdf

 Foreign investors alone would be granted access to extrajudicial tribunals staffed by private sector lawyers who rotate between acting as “judges” and representing corporations in cases against governments, posing major conflicts of interest. The leaked text includes provisions that submit TPP signatory countries to the jurisdiction of World Bank and United Nations investor-state arbitral tribunals. These tribunals, staffed by private sector attorneys (Article II.18.4), would be empowered to order governments to pay investors compensation for what the attorneys deem to be violations of the TPP’s investor rights. The tribunals lack public accountability, requirements to follow precedent, or standard judicial ethics rules. The leaked TPP text itself has no requirement for tribunalists to be independent or impartial. Rather, it relies on weak impartiality rules set by the arbitration venues themselves. In the 48-year history of the World Bank arbitration regime, which is most commonly used, tribunalists have only been disqualified in four of 41 challenges of exhibited bias or conflicts of interest. Rulings by tribunalists with specific conflicts of interest have been allowed to stand. A tribunalist ruling that Argentina had to pay Vivendi Universal $105 million for reversing a failed water privatization served on the board of a bank that was a major investor in Vivendi.

Foreign tribunals would be empowered to order governments to pay unlimited cash compensation out of national treasuries. The leaked text provides tribunals with discretion to determine the amount of compensation governments must pay investors (Article II.28.1) and also the allocation of costs (Article II.28.3), such as the tribunalists’ fees. Even when governments win ISDS cases, they waste scarce budgetary resources defending national policies against these corporate attacks, as $8 million in taxpayer funds must be used in an average ISDS case to pay large hourly fees for the tribunals and legal costs.

An overreaching definition of “investment” has been agreed by all parties that would extend the coverage of the TPP’s expansive substantive investor rights far beyond “real property,” permitting ISDS attacks over government actions and policies related to financial instruments, intellectual property, regulatory permits and more. The definition of “investment” in the leaked text is: “every asset that an investor owns or controls, directly or indirectly, that has the characteristics of an investment, including such characteristics as the commitment of capital or other resources, the expectation of gain or profit, or the assumption of risk” (Article II.1). The text goes on to enumerate as examples: regulatory permits; intellectual property rights; financial instruments such as stocks and derivatives; “construction, management, production, concession, revenue-sharing, and other similar contracts;” and “licenses, authorizations, permits, and similar rights conferred pursuant to domestic law.” The chapter’s new rights and protections would extend to investments already existing before the TPP. It would permit compensation claims even over failed attempts to make an investment, with the low standard to qualify for attempting to invest being “concrete action or actions to make an investment, such as channeling resources or capital in order to set up a business, or applying for permits or licenses.” The expansive definitions would allow attacks on a vast array of non-discriminatory domestic policies and government actions from health and land use policies to construction permits and financial regulation.

U.S. negotiators in particular are pushing to expand the scope of coverage to also subject government contracts to ISDS enforcement. U.S. negotiators are pushing for foreign investors to have greater rights than domestic investors with respect to disputes relating to procurement contracts with the signatory governments, contracts for natural resource concessions on land controlled by the national government and contracts to operate utilities (Articles II.1 and II.18(1)(a)(i)(C)).