News / 14 september 2017

What to think of the EU’s Multilateral Investment Court

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?

In November 2015, The European Commission stated that the Multilateral Investment Court "would lead to the full replacement of the 'old ISDS' mechanism with a modern, efficient, transparent and impartial system for international investment dispute resolution".

As the current system of international investment agreements is no longer acceptable, the plan for this Court sounds promising and shows that the European Commission recognizes that the ISDS-system has to be reformed. But do they succeed in this reform?

Investment Court legitimizes ISDS
The main problem of ISDS is, as stated by Maria Fernanda Espinosa, Chairperson of the UN working group for a treaty on transnational corporations and human rights: "While Trans National Corporations are granted rights through hard law instruments, such as bilateral investment treaties and investment rules in free trade agreements, and have access to a system of investor-State dispute settlement, there are no hard law instruments that address the obligations of corporations to respect human rights."

The proposed Multilateral Investment Court, however, does not address this imbalance. Instead, it rather reinforces it. The Court is only accessible by foreign investors, meaning that the claiming party will always be an investor, and the defendant will always be a state. Moreover, investors can use this Court without going through the local law system first, this way undermining the local rule of law and democracy.
So the conclusion is that the creation of a Multilateral Investment Court legitimizes ISDS and still puts investor interests above human rights.

Join the discussion
We expect that the European Commission might already request a mandate of the Council of EU ministers to start negotiating the Multilateral Investment Court before the end of the year. Therefore, now is the time for civil society to have a closer look at this Court, discuss its possible implications and develop alternatives.
On Friday 22 September, together with CEO, Friends of the Earth Europe, SOMO and TNI, Both ENDS organizes a debate about the Multilateral Investment Court in Brussels. Register here! 

Take a look at the programme.


• For more information about the Court, see the position paper of the Seattle To Brussels Network: ISDS at a dangerous crossroads
• Sign the petition by Friends of the Earth Europe and Seattle To Brussels Network and tell the European Commission to withdraw their plans for the Multilateral Investment Court

For more information

Read more about this subject