What do bilateral investment treaties actually offer us?
Thanks to the negotiations about TTIP, the public debate about bilateral investment treaties (BITs) is slowly underway. Especially the ‘Investor-to-State Dispute Settlement Mechanism’ (ISDS) of TTIP threatens to lower the norms to protect people and the environment. BITs make use of very controversial arbitrage systems (ISDS), which enable investors to bypass the national court to sue governments for their national policies and laws.
VIP treatment of multinationals
For decades already, BITs are responsible for burdening taxpayers with bearing the costs of billions losses of big multinationals. Meanwhile, profits are being privatised. BITs have already facilitated that many multinationals enjoy a special legal status for the national law of various countries, because of which their practices do not have to obey to all existing social and environmental laws. The publication ‘To change a BIT is not enough’ – which was recently launched by Both ENDS – shows the far-reaching consequences of these mechanisms on the basis of multiple international examples.
The taxpayers’ burden
Imagine that a foreign multinational sues the Dutch state, because the Dutch social and environmental laws would be too strict for the practices of that company. And imagine that the judge considers the multinational to be right, and that the Dutch government would be fined €2 billion euros to compensate for the costs incurred by the company. Why would Dutch tax money be paid to that company, if our own, democratically elected government wants to protect us from damage to the environment? This scenario is not only realistic. In fact, it is the bitter pill that various countries have already been forced to swallow, because Dutch companies sued them in front of the court of the bilateral investment treaty with the Netherlands. And before you know it, the tables have turned and we pay – with our money and our norms – to those big American multinationals due to the ISDS of TTIP.
Both ENDS argues for inclusive and sustainable development
Instead of asking which mechanisms are best suited to protect the rights of foreign investors, Both ENDS argues that international investment agreements (IIA) need to focus on the question how local stakeholders can be involved in the decision-making process. In addition, strong social and environmental regulation for investments in sovereign states are urgently needed, in order to ensure that investments actually contribute to inclusive and sustainable development of countries.
For more information:
- To change a BIT is not enough (September 2015), Both ENDS
- Socialising losses, privatising gains: how Dutch investment treaties harm the public interest (January 2015), SOMO, Both ENDS, Milieudefensie, TNI
- Parliamentary questions about Bilateral Investment Treaties (8 April 2014), Both ENDS
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