Why The European Commission's Consultation On Corporate Sovereignty Is A Sham (And How To Respond To It Anyway)

from the make-your-voice-heard dept

One measure of the resistance to the inclusion of corporate sovereignty provisions in TAFTA/TTIP is that the European Commission unexpectedly announced that it would be holding a three-month public consultation on this aspect in an attempt to defuse public anger. Here's the consultation's home page:

The European Commission is consulting the public in the EU on a possible approach to investment protection and ISDS in the TTIP. The proposed approach contains a series of innovative elements that the EU proposes using as the basis for the TTIP negotiations. The key issue on which we are consulting is whether the EU's proposed approach for TTIP achieves the right balance between protecting investors and safeguarding the EU's right and ability to regulate in the public interest.
As that shows, at the heart of the exercise is the misguided belief that protecting investors is somehow comparable to protecting the public interest and national sovereignty, and that a "balance" has to be struck between the two. No wonder, then, that the consultation itself is a sham: it does not seek people's views on whether investor-state dispute settlement (ISDS) is needed at all, only what form it should take, down to extremely technical details that will be incomprehensible to anyone not an expert in international trade law.

The structure of the consultation document (pdf) reflects this: 12 highly-specific questions about aspects such as "Scope of the substantive investment protection provisions" and "Appellate mechanism and consistency of rulings", and only one more general one: "What is your overall assessment of the proposed approach on substantive standards of protection and ISDS as a basis for investment negotiations between the EU and US?" On top of that, you must answer all 13 questions in 90 minutes, and it's not possible to save your answers and return to them later (but the digital rights group EDRi has created an online tool that lets you do that.) A cynic might almost think the European Commission is trying to make it hard for the public to participate.

As the closing date of the consultation (6 July 2014) approaches, a number of organizations have put together handy guides to filling it in -- it's open to everyone, not just EU citizens. Here, for example, is the Answering Guide from EDRi (pdf), which helpfully explains what exactly the often opaque questions mean, then suggests a number of points you might like to mention in your reply. A new site with the self-explanatory name of "No 2 ISDS!" also runs through each question in turn, but offers rather more forthright suggestions. Here's a typical sample:

Question 5: Ensuring the right to regulate and investment protection

I fundamentally oppose the fact that investment protection is placed above the sovereign right to regulate because:

Rules emerging from a democratic voting process (democratic and parliamentary decision-making process), which reflect the public interest and the will of millions of people, must always be weighted more heavily than private sector vested interests.

Fundamental social rights and human rights must not be limited by economic freedoms.
Naturally, the open-ended last question provides the people behind the No 2 ISDS! site with more scope for expressing their views on the consultation:
Are there any other issues related to the topics covered by the questionnaire that you would like to address?

First of all I would like to express my deep concerns with this highly complicated and technical questionnaire. If a consultation asks for the contribution of civil society/the public, then an honest attempt should be made whereby non experts should be able enabled to contribute. This is definitely not the case with this consultation, especially because, up until this question, there has been no possibility to state that I do not want any investor-state dispute settlements at all -- in TTIP, or in any other trade agreement. Furthermore, technical obstacles that prevent me from only filling in one part of the form, or to respond through email or fax fundamentally alter the "public" character of this consultation.
A similarly robust reply is offered by the Trade Justice Movement, whose answer to Question 13 begins as follows (Microsoft Word document):
There are serious flaws in this consultation process. First: it fails to give European communities the possibility of responding to the proposed TTIP in its entirety. The EU should provide this opportunity, particularly in light of the controversy regarding issues such as the secrecy surrounding the negotiations and the undermining of basic democratic processes, regulatory harmonisation and the impact on standards, the impact on jobs and on the economies of non-Party countries.
It makes an important point about one of the serious knock-on effects of the questions' opacity:
Second, the consultation is written in such a technical (and occasionally obscure) language that it excludes everyone but investment law experts. As most of these are arbitration practitioners, the questionnaire in effect invites ISDS-friendly responses by design.
And continues with these excellent points:
Third, the consultation is not in fact a consultation on the TTIP text but on a CETA text that was valid in March but has since progressed further in the CETA negotiations. In addition, the Commission says that it wants to build on CETA but also refer back to existing treaty practice. It is therefore a consultation on a non-existent text; given the significance of the details, this renders the consultation all but useless.

Fourth, the consultation starts from the assumption that ISDS should be in the agreement. This is despite the fact that in the negotiating mandate it states that "the inclusion of investment protection and investor-to-state dispute settlement (ISDS) will depend on whether a satisfactory solution, meeting the EU interests concerning the issues covered by paragraph 23 is achieved".
This gives an indication of the quality and thoughtfulness of the responses that are currently being made to the corporate sovereignty consultation, and of the rich materials that citizens can draw upon in making their own comments. The European Commission certainly won't be able to claim that no one cares whether ISDS is included in TAFTA/TTIP -- the level of public interest in this previously obscure aspect of international trade law is unprecedented. Whether Karel De Gucht, the European Commissioner responsible for the negotiations on the EU side, is willing to take note of all the important points raised above and act on them, is quite another matter, though.

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  1. identicon
    Andre, 27 Jun 2014 @ 1:08am

    I think the consultation per se is a good attempt, it is just a perverse setting that does not suit the dignity of state, I mean consider this:

    "The specific EU objective in our trade and investment agreements, or in the investment protection section of the TTIP, is to strengthen the balance between investment protection and the right to regulate, through clarifying and improving the substantive investment protection provisions while at the same time preserving the right of States to take measures for legitimate public policy objectives. "

    "while at the same time preserving the right of states" to take measures! Democracy as a caveat for foreign investor protection. They are completely out of their mind and should be prosecuted for treason.

    How could there be a "balance"? In an ordoliberal perspective the government/legal system sets and defines the rules for the market under which companies may operate. Of course we don't want discrimination of foreign companies but that does not mean that we have to compensate an alleged bias against them by making them supreme to our entire legal system.

    reply to this | link to this | view in thread ]

  2. identicon
    peter, 27 Jun 2014 @ 1:09am


    What gives me any confidence that this consultation is not the same as any other I have ever been involved with.

    A method by which the officals choose whatever answer they wanted in the first place, all whilst claiming a semblance of democracy with a look of innocence and righteousness on their faces.

    reply to this | link to this | view in thread ]

  3. identicon
    Anonymous Coward, 27 Jun 2014 @ 1:50am

    You have to love how a "public consultation" is made so complicated that I, with a great interest in the matter and 130 IQ, is absolutely intimidated by the process.

    You also have to love how the EU is somehow surprised to receive hundreds of thousands of e-mails about these things during campaigns, and resort to simply filtering them out of the system.

    I don't suppose it's occurred to anyone that if there was an easily accessible and less daunting way to actually offer your input, the mass mailings might just stop filling up their in-boxes.

    Perhaps it's deliberate? "Let's make the process excessively complicated and scare everyone off, so we can point at the lack of public interest and opinion." The only reasons I can think of to include a time limit on answering is a) to make it less accessible or b) having a completely incompetent IT staff.

    Anyone want to take bets on whether CETA and TTIP will cause e-mail carpet-bombings or not when the time comes? I'm gonna go with "most likely, yes" and if anyone says "why didn't you speak during the public consultation?" I will have a stroke.

    reply to this | link to this | view in thread ]

  4. identicon
    Anonymous Coward, 27 Jun 2014 @ 2:27am

    Just filled the questionnaire. Mixed some of the proposed answers as I saw best suited. The one "No Comment" on question 11 I left in, because there's no way of giving a good answer to that if you're opposed to ISDS.

    reply to this | link to this | view in thread ]

  5. identicon
    Anonymous Coward, 27 Jun 2014 @ 2:34am


    I think the most glaring problems relate to the information provided and especially omitted.

    They focus on expressing how this treaty will have much stricter limitations and thus improve the protection of governments to make policies. But they do not provide evidence that the specific measures are needed as an alternative to WTO, WIPO, UN or other transparent organisations with some enforcement mechanisms in trade disputes. On most legal affairs companies shop for the right venue for a lawsuit and with stricter measures this treaty is not going to be the primary battleground if alternatives exist.

    Thus the only thing you need specific legal recourse for is the rest of this specific treaty which we never get to see before we take a stance on the ISDS mechanisms...

    Welcome to the opaque and twisted outer limit of the "openness" circles. Completely insufficient and secondary source information from a party with an obvious interest in the treaty passing politically...

    reply to this | link to this | view in thread ]

  6. identicon
    Anonymous Coward, 27 Jun 2014 @ 2:39am

    just used the No 2 ISDS site - one form, one button, and they get a pre-packaged series of 'NO' answers. Read them over, and I'd say they're 80% good responses. If you don't have the lif to spend on wading through the (agreed deliberately intimidating/obtuse/specialist) forms, seriously, click the link and fill out the form - better get 80% good responses then 0%.

    Also, fuck ISDS. In the ear. With a rake.

    reply to this | link to this | view in thread ]

  7. identicon
    Anonymous Coward, 27 Jun 2014 @ 2:48am

    I would add that instead of corporations suing tax payers for ISDS dispute settlements. All the corporations in a country should pay money into a national escrow fund. Then when an ISDS lawsuit happens, all the money in that escrow fund is used to pay out damages.

    If corporations want corporate sovereignty, let them pay for it themselves. Leave the taxpayers out of it.

    reply to this | link to this | view in thread ]

  8. identicon
    Anonymous Coward, 27 Jun 2014 @ 2:49am


    I don't think this is made opaque to scare people off, per se. I think it is literally how the negotiators think about these issues and they lack the ability or will to lower the bar for feedback.

    The document is asking purely philosofical questions with incredibly leading introductions they demand you to take into account. This is a propaganda-feature. Pretend-listening while the information to inform the answers is leading and completely insufficient to give a balanced idea of what the feature will mean in real life.

    reply to this | link to this | view in thread ]

  9. icon
    sciamiko (profile), 27 Jun 2014 @ 6:22am


    I've filled in the questionnaire (as an EU citizen), and thanks to all the good work in clarifying the issues on the various sites. It occurred to me that ISDS creates an asymmetry, which judicial systems normally shun. If I had a dispute with a corporation (sorry, sir, investor), then even if I won, the investor could take the case to the arbitration panel claiming that the local laws were antithetical to the investor's business model. But even if I could afford it, could I get to put my case?

    reply to this | link to this | view in thread ]

  10. identicon
    Anonymous Coward, 27 Jun 2014 @ 6:29am

    Everyone gets this wrong!

    Businesses should be considered just like normal citizens when law enforcement comes knocking!

    Businesses should not be considered just like normal citizens when regulations are introduced to secure public interests so long as they do not run afoul of the protections afforded by the Constitution.

    Businesses should not be forced to release their customers assets and information without a warrant in accordance with the 4th and NOT WITHOUT NOTICE TO THE CUSTOMER!

    I am okay with laws that indicate businesses providing an essential market such as, Housing, Food Supplies, Health, & Financial Services cannot discriminate based on Race, Religion, Gender, or creed.

    Businesses that provide luxury services can discriminate however they wish... Examples Restaurants of any kind, Entertainment Venues, and organizations so long as they do not receive any form of government assistant or subsidies where funds are obtained from the public sector in any form.

    reply to this | link to this | view in thread ]

  11. identicon
    Anonymous Coward, 27 Jun 2014 @ 6:31am

    Re: Re:

    "I don't think this is made opaque to scare people off, per se. "

    It is not being made opaque to those corporations lobbying for these laws. No, it's very clear and simple, grease the palms of politicians and they will do everything in their power to repay you somehow.

    reply to this | link to this | view in thread ]

  12. identicon
    Anonymous Coward, 27 Jun 2014 @ 7:57am

    Re: Re: Re:

    I completely agree that the corporation lobbies are the only ones for whom it is not opaque, but it is not necessarily opaque because of such sinister thoughts. It is just that the end-result is such a scandalous mockery of "transparency", that such conclusions are tempting.

    You have to remember that TTIP is already causing a lot of scrutiny from concerned politicians. This crap could further the problems if we let them know about it now while the process is still open. Answering the questionaire is senseless. It is like making a court without knowing its jurisdiction...

    reply to this | link to this | view in thread ]

  13. identicon
    Anonymous Coward, 27 Jun 2014 @ 8:08am


    That would be problematic. First of all the companies getting hit will by definition be multinational and second the companies suing are not from the country getting sued.

    It seems unfortunate for national only companies to have to pay foreign companies for a governments fuckup. If you want such a fund, it would require an international fund and probably some companies having an option of avoiding it. That is never going to fly since the chance of screwups happening in Sweden are significantly lower than the chance of screwups happening in Romania.

    reply to this | link to this | view in thread ]

  14. identicon
    Anonymous Coward, 27 Jun 2014 @ 8:14am

    Re: Everyone gets this wrong!

    Is that even possible? Tax breaks and other such incentives rely on taxation but are essential for many companies. Tax breaks are in essence the same as public funding.

    reply to this | link to this | view in thread ]

  15. icon
    Goyo (profile), 27 Jun 2014 @ 9:02am

    "A cynic might almost think the European Commission is trying to make it hard for the public to participate."
    Oh, that's so cynical of you!

    reply to this | link to this | view in thread ]

  16. identicon
    Zonker, 27 Jun 2014 @ 12:13pm

    Protection for investors in a foreign trade is like protecting a gambler from losing at the casino. ISDS is essentially a mechanism for the gambler to change the casino's house rules in their favor so that they always win and the house always loses. How long do you think it would take before the country/casino goes broke?

    reply to this | link to this | view in thread ]

  17. icon
    That One Guy (profile), 27 Jun 2014 @ 1:40pm


    In that case instead of 'No Comment' you should have noted that it was impossible to answer that question in any fashion that wasn't in support of something you don't agree with, making it an inherently biased question, and one you refused to answer on it's terms.

    reply to this | link to this | view in thread ]

  18. identicon
    Anonymous Coward, 28 Jun 2014 @ 1:24pm

    Re: Re:

    It's never going to fly, and neither will ISDS in the TTIP.

    reply to this | link to this | view in thread ]

  19. identicon
    I'm Having None Of It, 28 Jun 2014 @ 2:32pm

    ISDS is the negation of national sovereignty. We might as well forget about human rights and the environment and get used to censorship and pollution because, guess what? Anyone affected by the biased rules that favour corporations over the rest of us would have no standing in an ISDS tribunal. You know why? Human rights and public health concerns aren't covered by ISDS, only investment issues.

    Oh, and these people can override national laws and courts. ISDS is the death of democracy. Please, please take part in the consultation. Show them we are keeping an eye on them.

    reply to this | link to this | view in thread ]

  20. identicon
    Anonymous Coward, 30 Jun 2014 @ 3:56am

    Re: Everyone gets this wrong!

    Regarding discrimination, I'd go further - anyone who wants limited liability or any reduced taxation rate is prohibited from discriminating for or against customers on grounds of any immutable or involuntary characteristic, and may not discriminate in HR matters on any basis other than their performance in the roles listed in their job description (other than favouring shareholders in non-public businesses, perhaps).

    The other change I'd make is to treat payments of any kind paid to other entities under common control (as defined in terms of EU competition law) as the same as dividends. That would eliminate the loophole which companies use to shift money to their owners through trademark licences etc.

    reply to this | link to this | view in thread ]

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