Investment treaties must be inclusive, sustainable and fair. That means that they must not put the interests of companies before those of people and their living environment.
International investment flows are currently regulated by some 3,000 bilateral investment treaties (BITs) and other international investment (IIAs). These agreements and treaties were originally set up to promote foreign investment, but very little has come of their promised beneficial effects. The time has come to radically change the international system of investment treaties. It is not only clear that investment treaties do not promote foreign investment, but also that in many cases they seriously harm the interests of developing countries.
Far-reaching rights for investors
The treaties grant foreign investors far-reaching rights and are increasingly used to exert pressure on governments not to take measures that are not in the investors’ interests. The Investor-to-State-Dispute-Settlement (ISDS) system allows businesses or investors to lodge charges against states beyond the jurisdiction of international courts. ISDS tribunals are not subject to the laws of countries that are charged and only work in one direction: only businesses may submit complaints, without having to do anything to defend themselves.
Dispute settlement beyond the reach of international courts
Through ISDS, foreign investors can oppose a wide range of national government policies and measures, including social and environmental rules. The rulings of an ISDS tribunal are definitive, binding and internationally enforceable. A large proportion (around 60%) of all ISDS cases are brought by companies against poorer countries, and the number of complaints has risen sharply in the past 10-20 years. In the past five years, one new ISDS case has been submitted per week. At the end of 2017, UNCTAD reported that successful complainants received an average of $522 million in compensation. Countries will often decide not to introduce a certain measure rather than face such high penalties, with all the consequences that will have for its people.
Many ISDS claims from the Netherlands
ISDS claims have already caused considerably harm in many developing countries. The second highest number of ISDS procedures are initiated from the Netherlands, after the US. That is partly because of the almost 100 BITs that the Netherlands has concluded, including with developing countries. There are also many ‘letter-box’ companies registered in the Netherlands, which can use the Dutch BITs to lodge complaints against countries in which they invest. The increasingly negative effects of ISDS in investment treaties is one of the main reasons why more and more developing countries want to terminate their investment treaties with the Netherlands.
Both ENDS is working to reform and terminate BITs
Both ENDS has long been drawing attention to the negative consequences of investment treaties on developing countries and is particularly concerned about the ISDS mechanisms in the current treaties. To make investment policies fair and sustainable and to ensure that they do not harm people and the environment, the ISDS mechanism included in all these treaties must be removed as soon as possible.
Dutch model BIT
In 2018, the Netherlands is revising the model text of its BITs. As the text will serve as an example for many other European countries, it is important that it is as inclusive and sustainable as possible. Together with Dutch and foreign partners, Both ENDS is providing input for the new text, naturally in the hope that its recommendations are taken up. We are also working with our partners to raise awareness of the consequences of investment treaties and ISDS, with the aim of exerting public pressure on the decision-making process relating to the model text.
Outside the Netherlands, we are also making our concerns and criticisms clear in other institutions, like UNCTAD and the European Parliament. We are supporting local groups in Southern countries in their efforts to terminate existing treaties, so that new investment policies can be developed that put people and the environment first and ensure that investments make a positive contribution to sustainable development.
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Indigenous communities in Paraguay saw their attempts to regain their ancestral lands thwarted by German investors. In Indonesia, US-based mining companies succeeded to roll back new laws that were meant to boost the country’s economic development and protect its forests. This is the level of impact that investment treaties can have on social, environmental and economic development and rights. Why? Because of the ‘Investor-to-State Dispute Settlement’ clauses that are included in many such treaties.
International trade agreements often have far-reaching consequences not only for the economy of a country, but also for people and the environment. It is primarily the most vulnerable groups who suffer most from these agreements.
Together with civil society organisations from all over the world, the Fair Green and Global (FGG) Alliance aims for socially just, inclusive and environmentally sustainable societies in the Netherlands and the Global South.
Blog / 16 February 2021
The Netherlands can contribute much to making agriculture sustainable – nationally and internationally
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Publication / 31 December 2020
Publication / 12 November 2020
Press release / 29 June 2020
Germany must use its influence as president of the EU in the second half of this year to ensure that the controversial EU-Mercosur free trade agreement is not signed. This is the message in a letter presented to German chancellor Angela Merkel today by 265 civil society and environmental organisations from the EU and Mercosur countries. The deal between the EU and Argentina, Brazil, Uruguay and Paraguay will stimulate destruction of the natural environment and the violation of human rights in vulnerable areas in South America. The agreement will also give European farmers an unfair competitive advantage. Dutch signatories to the letter include Greenpeace and Both ENDS and various organisations united in the Handel Anders! coalition.
Blog / 14 April 2020
The World Trade Organization (WTO) is often seen as an institution in crisis, powerless and no longer relevant, and especially after US president Donald Trump decided in 2019 to pull the plug on one of the WTO’s most important bodies (the one dealing with trade disputes). Now, more than 150 civil society organisations, networks and interest groups from around the world have signed an urgent letter to WTO Director General Roberto Azevedo, because they are seriously concerned about the state of affairs within the organization.
News / 28 January 2020
Earlier this month, the Energy Charter Treaty (ECT) has decided to halt the geographic expansion to new member states, pending the finalization of the ongoing modernization process within the ECT. Both ENDS and our partner SEATINI, who amongst other things have been calling for this stop, welcome this decision.
News / 11 October 2019
In Indonesia, US-based mining companies succeeded to roll back new laws that were meant to boost the country’s economic development and protect its forests. This is the level of impact that investment treaties can have on social, environmental and economic development and rights. Why? Because of the ‘Investor-to-State Dispute Settlement’ (ISDS) clauses that are included in many such treaties.
News / 11 October 2019
Indigenous communities in Paraguay saw their attempts to regain their ancestral lands thwarted by German investors. This is the level of impact that investment treaties can have on social, environmental and economic development and rights. Why? Because of the ‘Investor-to-State Dispute Settlement’ (ISDS) clauses that are included in many such treaties.
News / 18 June 2019
Open letter from more than 340 organisations: EU must stop negotiating treaty with South American countries.
Today, more than 340 organisations from both South America and Europe, including Both ENDS, have sent a joint open letter to European Union leaders calling for the EU to cease negotiations on the EU-Mercosur Free Trade Agreement. The organisations and their constituencies are seriously concerned about increasing violations of indigenous human rights and damage to nature and the environment in Brazil.
Publication / 4 April 2019
News / 21 January 2019
Today an alliance of more than 150 organisations, trade unions and social movements in countries across Europe is launching a joint programme against unfair trade and investment agreements, and especially against the controversial Investor-to-State-Dispute-Settlement (ISDS) mechanism. Under ISDS, investors can bring complaints against states whose social and environmental legislation pose a threat to their profits.
Publication / 7 November 2018
News / 19 June 2018
Today, Both ENDS sent a letter, signed by various civil society organisations, to Sigrid Kaag (Dutch Minister of Aid & Trade) reminding her of an important deadline and to urge her to terminate the Bilateral Investment Treaty (BIT) that exists between the Netherlands and Burkina Faso. The treaty, which can be very harmful for a poor country such as Burkina Faso, will automatically be renewed for the next 15 years if it is not terminated before July 1st this year.
External link / 31 May 2018
For several years now, Both ENDS has been drawing attention to the downsides of existing Bilateral Investment Treaties (BITs) between the Netherlands and countries in the Global South. In 2017, an important step was taken, when Uganda decided to terminate its BIT with the Netherlands, as advised by Both ENDS and our local partner SEATINI.
News / 14 September 2017
Remember the widespread protests against trade agreements TTIP and CETA? One of the main worries was the Investor-State Dispute Settlement (ISDS) mechanism these treaties contain. Now the European Commission has proposed to set up a Multilateral Investment Court. Is that good news?
Event / 20 June 2017
Eurodad's International Conference is co-hosted by Eurodad's Dutch members ActionAid Netherlands, Both ENDS, OIKOS, Oxfam Novib and SOMO. It will be held in the Caballero Fabriek in The Hague.
News / 26 January 2017
From 24-28 January 2017, the second round of negotiations towards a Comprehensive Economic Partnership Agreement (CEPA) takes place between the EU and Indonesia. The proposed agreement covers far-reaching liberalisation and deregulation that can have severe impacts on society, people and the environment. Civil society organisations, including Both ENDS, released a statement to express their concern and call upon the negotiators to halt the process and fully assess the potential environmental and social impacts of the agreement.