Over 70 organisations worldwide have signed an open letter to call upon the Dutch government to vote against CETA - the 'Comprehensive Economic and Trade Agreement'between Canada and the EU this week. They have serious concerns about the negative global social and environmental impacts of the CETA trade deal and similar upcoming European Union's trade agreements.
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.
Many countries are led to believe that signing a bilateral investment treaty (BIT) or international investment agreement will open the door to foreign investment that contributes to economic development and prosperity. But the evidence tells a different story.
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.
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.
In 2001 Tanzania and the Netherlands signed a treaty only known to a few; a so-called Bilateral Investment Treaty aimed "to extend and intensify the economic relations between them and to stimulate the flow of capital and technology and the economic development of the Contracting Parties". But signing the treaty was in fact mainly a symbolic act which since then has had little if any effect in this respect. In fact, a report by the Netherlands Bureau for Economic Policy Analysis found that BITs have no positive effect on investment in low and lower middle income countries located in Latin America and Sub-Saharan Africa, including Tanzania.
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.
Recently, India has terminated its bilateral investment treaties (BIT) with 57 countries, including the Netherlands. This means Dutch companies in India, and Indian companies in the Netherlands, can no longer make use of the controversial arbitration procedures called ISDS. According to Burghard Ilge from Both ENDS, India's action is a step in the right direction. However it is a missed opportunity that the Dutch government did not agree with this termination. This way, old investments stay protected for 15 years under the former BIT.