Paul McCormack Cooney
#StopCETA: The Corporate Courts That Could Kill Progress On Any Issue You Care About
Updated: May 28, 2021
'Imagine an environmentally or socially destructive corporate project – say, a toxic mine, which could poison your local supply of water, or a luxury real estate project, which would displace hundreds of people in its neighbourhood. You and your community oppose the plans, the courts rule in your favour and the project is stopped. Seems like a community victory right? But then, the company behind the project sues your country for interfering with its profits, demanding millions or even billions in compensation, including for future profits. Imagine the lawsuit takes place in a biased pseudo court where rulings have been so devastating for countries that many respond to a case, or even the mere threat of one, by offering vast concessions, such as rolling back their own laws.
Actually, you do not need to imagine all this. It is the reality. Under the ISDS (investor-state dispute settlement) parallel justice system for corporations and the rich, they can sue countries when they think that government decisions or court rulings – even ones whose explicit aim is to protect people or the environment – affect their profits. These lawsuits bypass domestic courts and take place before an international tribunal of arbitrators: essentially three investment lawyers who decide whether private profits or public interests are more important.'
Introduction to Friends of the Earth Europe's 'Red Carpet Courts' Report (Click to read the full report)
CETA in a nutshell
CETA stands for Comprehensive Economic AND Trade Agreement. It’s is a mixed agreement between the EU and Canada.
CETA is often described as just a trade agreement, but the correct classification of CETA as a mixed agreement is important. Trade agreements fall under the jurisdiction of the the EU alone and they don't need EU member states to vote on them in their home parliaments. Approximately 98% of CETA became ‘provisionally applied’ in 2017 because the EU had authority to fire up that 98% without needing member states permission. So all the parts of CETA related to the reduction of tariffs and the export of goods and services are already up and running. That 98% has already led to a 37% increase in trade between Ireland and Canada, worth two billion euros in 2019.
However, it is not the trade part of CETA that people are campaigning against. The last 2% of CETA contains a highly controversial Investment Court System (ICS) which will only come into effect when each member state votes for it. The ICS is a slightly reformed version of the Investor State Dispute Settlement (ISDS) system (described in the introduction) which allows corporations to bypass domestic legal systems in order to sue states when governments make decisions that affect corporate profits.
Campaigners aren’t looking to stop CETA in its entirety. They are looking to stop the remaining 2% of the deal that contains the ICS. To date only 15 of the 27 EU Member States have ratified CETA so there is no pressure on Ireland to rush this vote through. Cyprus has already voted against CETA and there are still opportunities to block it in the 11 remaining states.
Why is it important to stop the Investment Court System?
Imagine yourself sometime in the near future, maybe three or four years from now, and you’re asking yourself ‘Why hasn’t the government done anything to improve the housing crisis?’ or ‘Why do workers rights consistently get trampled on over corporate interests? or, ‘Why isn’t the Climate Action Bill reducing emissions the way we hoped it would?’ If we allow CETA to pass with the ICS intact, then the ICS could be at the very heart of the answer to all those questions.
Some background on the StopCETA campaign...
Back before Christmas I wasn't aware that such a thing as CETA even existed, but all of a sudden, a vote to ratify the agreement appeared on the Dáil schedule and there was an urgent flurry of activity from all the civil society, activist and political corners that campaigned against the agreement back in 2016.
Writing in the Irish Examiner at the time Oisín Coghlan, Director of Friends of the Earth Ireland described it like this:
Out of the blue last Friday, a Government motion to ratify CETA appeared on the Dáil schedule for this week. This caused consternation among civil society groups who have expressed concerns about the impact of CETA on consumer, environmental and labour standards, and no little disquiet in the ranks of the Green Party. The Green Party has an official policy against CETA and CETA is not mentioned by name in the Programme for Government. Many would have expected it to be the subject of inter-party negotiations before any move to ratify it.
As Oisín pointed out The Green Party has an official policy against CETA and the party campaigned against the deal back in 2016. Nothing in the text of CETA has changed since 2016 so it was surprising for many to see the Greens now prepared to vote in favour of it. Possibly no one was more surprised than Green Party TD and finance spokesperson Deputy Neasa Hourigan who described efforts to push the deal through as ‘extraordinary’ and ‘cynical’. It seemed the sudden about-turn on CETA from the Greens contributed to a number of high profile Green Party councillor resignations. Currently two Green TDs, Deputies Neasa Hourigan and Patrick Costello have vowed to vote against CETA (and vote against the Green Party itself), once the deal comes before the Dáil. Patrick Costello has gone one step further and raised a High Court challenge against CETA. For the ten remaining Green Party TDs CETA appears to be one of the policies that gets thrown on the bonfire of a coalition government.
In much of the media coverage around CETA opposition to the agreement tends to be framed as if it is confined to a small group of Green Party troublemakers, but the environmental and social justice movement is far larger than the Green Party. Beyond the Green’s internal strife civil society groups such as Comhlámh (the Irish Association of Development Workers and Volunteers) climate activist groups such as Extinction Rebellion, and the citizen lobby group OneFuture, amongst many other networks of people across the country, launched into action emailing and calling their TD's.
At first, campaigners were not asking to stop CETA entirely but just to delay the vote long enough to give everyone time to properly examine it. Due to the large volume of people who quickly emailed their TDs in December the CETA vote was postponed until January. This gave campaigners, like myself, some breathing room to learn more about CETA and the ICS contained within.
So what's it all about...
For CETA's defenders it is all about trade, and the 37 per cent increase compared with the time before 98% of CETA was provisionally applied. The important point to remember here is that 98% has been up and running since 2017. It’s the Investment Court System that is the problem and the trade part of the deal clearly doesn’t need the ICS to function as it has been working just fine for the past four years.
Dr. John Reynolds, an Associate Professor of Law and Chair of the International Justice LLM programme at Maynooth University wrote a very informative article for Business and Human Rights in Ireland outlining the history of investor tribunal systems like the ICS and ISDS tribunals:
International investment tribunals are a neocolonial creation. From the late 1950s onwards, as the Third World liberation movements continued to win independence from European imperial rule, the multinational corporations of the global North had to find new paths of access to the resources and labour of the South. Investment treaties became a vehicle for this, under which states across Asia, Africa and Latin America would grant access to corporate investors primarily based in Europe and North America. But those investors were worried about potential nationalisation or regulation policies that might affect their property and profits, and refused to trust the legal systems of the global South states to protect their interests. So at their behest the global North states insisted on bypassing the jurisdiction of host state domestic courts in favour of private international investment tribunals.
Watch this video for a quick explainer on the Investor State Dispute Settlement (ISDS) system:
These investor tribunal systems are one-way systems meaning that companies can sue countries, but countries cannot sue companies in return. Writing in the Business Post Dr. Oisín Suttle, Assistant Professor of Law at Maynooth University, pointed out how there is no benefit to Ireland for introducing such a system. All of the benefits of such a system go to the companies and not the countries:
The issue with investment protection is that there is no plausible problem to which it is the solution. There is nothing on the plus side, against which to weigh the constraints that CETA’s investment chapter asks Ireland to accept. The traditional justification for investment treaties is that they are tools for attracting foreign investment. For developing countries in particular, and those with weak rule-of-law institutions, the perceived risks of discrimination, expropriation and inadequate access to justice may deter investors, limiting states’ access to international capital and impeding economic development. Empirical studies have cast doubt on that story, finding little or no effect on investment flows as a result of entering into these agreements. To the extent such agreements may promote investment, they will only do so where the kinds of risks identified exist. The past 40 years suggest Ireland has no difficulty attracting international investment without providing these additional international legal guarantees.
But surely these systems are fair and balanced, right?
Reading any of the cases in the Friends of the Earth Europe's 'Red Carpet Courts' report could only induce a sense of fury at the injustice of these systems.
In the case above, the Romanian courts found that the permits required for the gold mine had been obtained illegally. Rather than accept the domestic court’s decision Gabriel Resources took an ISDS case against the country for 3% of the value of their entire economy.
Unlike a domestic court, companies can sue states for future profits they might have earned if their business plans had gone ahead. So cases that claim billions are not unheard of, especially when fossil fuel or mining companies are the companies making the claims.
As if matters weren’t bad enough, the legal fees of Gabriel Resources are being funded by a Wall Street Hedge Fund, Tenor Capital Management:
Gabriel Resources’ claim is financially backed by Wall Street hedge fund Tenor Capital Management. Tenor pays the company’s lawyers in exchange for getting a share of the money if it wins. Such funding deals allow companies to draw out legal fights, driving up defence costs for states and increasing the likelihood that governments give in to corporate demands to avoid excessive legal costs and the risk of losing. There is reason to fear that Gabriel Resources’ multibillion lawsuit might force the Romanian government to let the mine be developed in order to settle the case, for example, by changing laws and issuing new permits. A first warning sign was the government’s decision to withdraw its application for Roşia Montană to become a UNESCO World Heritage Site in 2018. Another worrying indicator is a proposed new mining law from early 2019, which would enable new permits. If the mine was not approved, the risk is that Gabriel Resources could still just walk away with a vast amount of public money in compensation.
One of the most significant fears of introducing the ICS is the threat it could lead to ‘regulatory chill‘ on the passing of legislation. Instead of passing laws that might protect, our environment, or our right to housing, or our right to water, for example, government politicians may choose instead not to pass those laws for fear of being sued by multinational corporations for huge sums of money. It’s this fear of costly legal cases that led Nobel Prize winning economist Joseph Stieglitz to describe the ISDS system as litigation terrorism’.
Ireland is unusual in that it is only exposed to one other treaty with an ISDS system: the Energy Charter Treaty. It is highly likely that we have already seen the effects of regulatory chill under the Energy Charter Treaty. When Deputy Bríd Smith, of People Before Profit, tried to pass the Climate Emergency Measures Bill in 2019, the then minority Fine Gael government blocked the bill from progressing by refusing to issue a ‘money message’. The Climate Emergency Measures Bill aimed to ban all fossil fuel exploration off the coast of Ireland. It was voted through the Dáil twice by a majority of TDs but the government cited the threat of legal action as one of the reasons for blocking Deputy Smith’s bill.
When France attempted to ban fossil fuel extraction in 2017, Vermillion threatened France with an ISDS case under the Energy Charter Treaty. As the operator of the Corrib Gas project off the coast of Mayo, Vermillion would have the exact same powers under the Energy Charter Treaty to threaten the Irish state with a similar legal case. The fact that Vermillion has already threatened France is enough to send a warning shot to any country considering a ban on fossil fuel exploration.
International law firms who take ISDS cases on behalf of corporations know full well how to use regulatory chill to the advantage of their clients. For example, on the website of law firm Steptoe the firm advises clients to consider investment treaty protections as...
It may well be possible to use such protections as a tool to assist lobbying efforts to prevent wrongful regulatory change, or they may prove essential in obtaining compensation.
Steptoe’s website also advises clients on ‘Treaty Shopping,’ or how best to set up subsidiary companies in countries where you can access the benefits of an ISDS system:
In many instances there may not be an investment treaty in force between the home State of the investor and the host State into which it wishes to make, or has made, the investment. However, this problem can often be solved easily. Take for example the situation where a British investor wishes to invest in Zimbabwe. At the time of publication, there is no BIT (Bilateral Investment Treaty) in force between the United Kingdom and Zimbabwe. However, there is such a treaty in force between the Netherlands and Zimbabwe. In order to obtain the protection of the BIT between the Netherlands and Zimbabwe, the British investor need only incorporate a subsidiary company in the Netherlands and ensure that the Dutch company owns (directly or indirectly) the investment in Zimbabwe. Such a structure will entitle the Dutch company to bring a claim under the BIT in the event that a measure is taken by the Zimbabwean Government which damages the investment.
As with the Gabriel Resources case against Romania, where the Wall Street hedge fund Tenor Capital was funding the case, Steptoe acknowledges this is increasingly common and will assist clients finding such funding:
Increasingly, international arbitration claims are funded by third party funders, thereby giving clients more options as to how they finance their disputes. The clients utilising third party funding range from blue chip companies through to individuals. We can assist clients with obtaining third party funding.
Even when countries win they lose
Even if a country resists the regulatory chill effect and decides to defend itself against an ISDS case, the case can drag on for years and still cost millions as legal costs are not always awarded to the winner.
Once again this highlights how Ireland has nothing to gain from signing up to a system like the ICS. There are clearly many companies in Ireland that have shown a willingness to use the ISDS system to achieve their corporate goals. If Ireland tries to ban fossil fuel exploration, or raise the minimum wage there are many companies here that may choose to sue the Irish taxpayer for any lost profits they might incur.
But what’s the difference between the ICS and the ISDS systems?
In order to help people respond to some of the common political arguments in favour of the CETA agreement the excellent folks at Comhlámh produced a Fact Check document. The following is their response to the claim that ’ICS is a reformed version of the discredited ISDS system. It is now fair, transparent and in line with EU law’:
ICS is a rebranded Investor State Dispute Settlement (ISDS) system making some procedural improvements on transparency and appeals: While previously tribunals were ad-hoc, ICS now has a panel of adjudicators from which the arbitrators on a claim will be drawn. However, this doesn’t change the fact that these adjudicators do not need to be judges and they are paid thousands per day of trial which can create a perverse incentive to lengthen trials. CETA also allows for an appellate body. However, that ‘appeals process’ is simply to another arbitration panel. ICS still grants foreign corporations a special status that allows them to seek compensation outside national legal systems that are used by everyone else.
Friends of the Earth Europe released a report showing how five of the most controversial ISDS cases could still be taken under the ICS system. They also put together this excellent infographic ‘Investment Court System: ISDS in Disguise: Ten reasons why the EU’s proposal doesn’t fIx a fundamentally flawed system’
Following criticisms of the ICS the EU issued a Joint Interpretative Declaration to calm criticisms of the ICS.
In a line by line assessment of the EU’s Joint Interpretative Declaration, the Seattle to Brussels Network (‘a network of development, environment, human rights, women's and farmers’ organisations, trade unions and social movements, as well as research institutes’):
CETA is not even close to bringing real change from the current ISDS system. Under CETA and this interpretative declaration: - investors will still be able to challenge public policy legislation. - investors will still be allowed to bypass the domestic court system and have exclusive access to a parallel justice system. - for-profit lawyers will still be able to decide on matters of public policy. If the European Union and Canada are serious about their promises to protect citizens and the environment, they will put an end to investment arbitration, starting with the removal of investment protection provisions from CETA.
In other words the ICS is ISDS with a lick of paint applied. The ICS system will still allow corporations to bypass the Irish court system and sue the Irish taxpayer should our government pass laws that will affect their profits. The ICS tribunals are not Irish courts and they're not EU or Canadian courts. They are special corporate tribunals that only exist within the context of the trade deal and the lawyers who sit on these tribunals are not Irish or EU judges, it appears they will be the exact same high paid lawyers who currently decide the wins and losses of the ISDS system.
So what is happening with the StopCETA campaign now?
After the Dáil vote on CETA was deferred until January, various campaign groups set about raising public awareness to try and stop the agreement from being ratified. I myself was closest to the Extinction Rebellion campaign which sent out an email to its subscribers inviting people to join a WhatsApp group for a ‘Digital Rebellion’. The original plan was to build awareness of CETA on social media. Many people have no idea what CETA is or how it might affect them or issues they care about so getting the word out is a key goal of the campaign.
Once people joined the WhatsApp group a further campaign developed to contact local county councillors asking them to raise emergency council motions on CETA. Councils were asked to write to Tánaiste Leo Varadkar (Minister for Enterprise, Trade and Employment), requesting he refer CETA to a government committee for proper scrutiny. Under committee scrutiny TDs would be given the opportunity to hear evidence for and against CETA before making recommendations to the Dáil about whether to vote for or against the agreement.
To date, more than 10 county councils across the country agreed to emergency motions and to writing to the Tánaiste. Undoubtedly due to this grass-roots pressure, the Tánaiste referred CETA for scrutiny by the EU Affairs Committee. The committee is still hearing testimony but at the time of writing their have been three days of evidence given over the course of three weeks.
EU Affairs Committee Scrutiny
Session 1: David O’Sullivan (Video Starts at 00:15:10)
The first day’s testimony before the EU Affairs Committee was given by former Director General of Trade in the EU, Mr. David O’Sullivan. Mr O’Sullivan had already set out his pro-CETA argument in an Irish Times opinion piece ‘Causing EU crisis over Canada trade deal would be mistake for Ireland’.
Mr O’Sullivan's testimony largely followed the three main arguments of his Irish Times piece. He spoke about how CETA is good for business and how Ireland has already profited from the increase in trade with Canada. He noted that ratifying the deal would maintain good relationships with Canada, and that the ICS would be a much better system than the ISDS system.
In the interest of transparency it should be noted that Mr O’Sullivan is a Senior Counselor for the law firm Steptoe - the same law firm I wrote about above which advises clients on the benefits of ISDS systems for lobbying efforts, on ‘Treaty Shopping’ and access to third party funding for their ISDS legal costs.
Session 2: The Legal Testimony (Video Starts at 00:12:14)
The second day of testimony involved three assistant law professors addressing the legal concerns of the ICS. Dr. Laurens Ankersmit (Assistant Professor Amsterdam Centre for European Law and Governance, University of Amsterdam) and Dr. Oisín Suttle (Assistant Professor of Law at Maynooth University) gave similar testimony against ratification of the deal.
Dr. Ankersmit testified that CETA is not the progressive agreement it is often painted to be. He said the ICS would be an extraordinarily powerful system that would allow corporations to bring cases against governments without exhausting local domestic avenues.
He pointed out that national parliaments would not be in a position to easily change the text of the agreement that the ICS tribunals are ruling on. Only Canada and the EU can change the text, not EU member states alone. So if the Irish government votes to introduce the ICS as part of CETA, and subsequently discovers that the ICS is causing a chill effect on our legislation, we can’t easily change the text of the law as we could with our own domestic laws. Also, because of a so called ‘zombie clause’, we won’t be able to exit the agreement for 20 years, we’ll be stuck with it.
Dr. Ankersmit further remarked that all investments are protected in the agreement, including fossil fuels. In order to keep global temperatures below 1.5 degrees we know that we need to leave the vast majority of fossil fuels in the ground. The fact that CETA gives equal protection to fossil fuels encourages further fossil fuel investment.
Dr. Suttle added that ISDS is uncommon in international law in general, as most international agreements are between State to State and don’t directly give investors rights. He remarked that ISDS can result in ’eye-watering’ awards and the average damage awarded is over $250 million with fourteen know awards in excess of $1 billion.
Dr. Suttle noted that ISDS is usually advocated as a tool to attract foreign investment for developing countries but evidence suggests there is little connection between ISDS and attracting investors.
He also noted that ISDS could impose significant costs and risks and would introduce significant strain on any sector that would be affected by such a system. It would impose limits on what we can do and how we can do it, with the threat of multi billion dollar lawsuits if we get it wrong.
Dr. Suttle further testified that there is very good of evidence that the chill effect is a real concern and there is certainly reason to worry about the effect CETA will have on our ability to regulate as it forces government to air on the side of caution.
Dr. David Fennelly (Assistant Professor School of Law, Trinity College Dublin) only addressed ratification of CETA in relation to the constitution and didn’t look at the merits or demerits of CETA. His evidence was more relevant in regards to Deputy Patrick Costello’s High Court case against CETA and whether a national referendum would be required for ratification.
In short it comes down to two earlier Supreme Court cases, the 1987 Crotty case & the 2012 Pringle case. Under the Irish constitution it is up to government to conduct the affairs of the State and they have wide discretion to do that. It is necessary to consult the Irish people only in exceptional cases and to date there have been eight cases where a national referendum was required.
The 1987 Crotty case was in relation to the Single European Act. The Supreme Court judged that part of the Act involved giving away the sovereign powers of government. The court decided a referendum was needed to get the public's agreement to give away those powers.
The 2012 Pringle case was in relation to the European Stability Mechanism which again involved giving away some of the government‘s power to the EU. Again the Supreme Court had to establish if the European Stability Mechanism involved such a substantial transfer of powers that it required a referendum. In this case they decided it did not. They ruled that ratification of the treaty involved the exercise of the States power, not the alienation or abdication of that power.
Dr. Fennely stated that the Pringle case now sets the test now for any future treaties. It was a narrowing of the earlier Crotty judgement and set a very high threshold of when the court will intervene. Dr. Fennelly remarked that a former member of the Supreme Court described the Pringle judgement as ‘putting the Crotty judgement to sleep’. He said that the Pringle case reduces, but doesn’t eliminate the question of when a treaty needs to be put to people. He observed that we have frequently signed up to treaties (e.g. the Energy Charter treaty) where a national vote has not been required.
Session 3: The Canadians (Video Starts at 00:12:08)
The third day of testimony before the EU Affairs committee heard the perspective of the Canadian government and the Irish Canada Business Association, a lobbying group for Canadian businesses in Ireland.
Suzanne Drisdelle (Chargée d'Affaires and Senior Trade Commissioner at the Embassy of Canada in Ireland) spoke about our shared values and strong relationship with Canada. She spoke about how like minded countries work together and how our economic recovery from Covid depends on international trade. She also spoke about how small companies are the back bone of our economies and they will benefit the most from the removal of tariffs on dairy, beef, textiles, whiskey and services. She noted that 75 Canadian companies have created 15,000 jobs so far. She also briefly touched upon how the ICS is better than the ISDS and how it offered an innovative approach that was fair and transparent.
Reuben East (Counsellor of Trade & Economic Policy at Canada's Mission to the European Union in Brussels) is a lawyer for the Canadian government and was there to answer technical legal questions for Chargée d'Affaires Drisdelle.
Chris Collenette (Chair of the Ireland Canada Business Association (ICBA)) remarked that Canadian business in Ireland had doubled in size in recent years, in part from CETA and in part due to Brexit. He said it was the ICBA's view that Ireland should ratify CETA, not doing so could affect our post Covid recovery. He reiterated the strong cultural relationship between Ireland and Canada and warned that failure to ratify CETA could weaken that relationship and weaken investment from Canada and other countries. He stressed that if members of the committee took nothing else from him they should take that ’the numbers do not lie.’ Employment and business is good and not ratifying CETA would damage our reputation. He said 'if you’re making €1.7 billion more than you used to, you should sign the deal'.
Again, in the interest of transparency, Mr Collenette represents Canadian businesses operating in Ireland such as Vermillion. Vermillion are the the fossil fuel company that operates the Corrib Gas field and which threatened France with an ISDS lawsuit if they tried to ban oil and gas extraction on their territories. Mr Collenette also represents the interests of the Eversheds Sutherland, a law firm who have more than 70 arbitration lawyers around the globe.
Reflections on the testimony before the EU Affairs Committee
The arguments in favour of CETA always boil down to these main points:
We‘re already making good money from CETA,
Lets not upset our relationships with Europe and/or Canada, and
The ICS is better than the ISDS system.
The first argument is a misdirection away from the ICS and I believe it’s an intentional misdirection. It is true that trade has increased with Canada and business has been good for Ireland, but that trade is happening already without the ICS, which means it doesn’t need the ICS to function. While giving his testimony to the committee the Canadian lawyer Reuben East stated that ‘88% of Canadian exports to Ireland are from SMEs’ (Small to Medium Enterprises) he also added that ‘99% of Canadian and EU companies using CETA are SMEs’. Most of the trade we hear about is happening between smaller companies and the smaller companies are very unlikely to take million dollar legal cases against foreign states. Make no mistake that the ICS is for the benefit of very large and wealthy corporations.
In an opinion piece in the Irish Times Leo Varadkar attempted to outline to the public why we should be supporting the CETA trade deal. Remarkably the Tánaiste failed to mention the ICS once in his piece. By completely sidestepping the major objection to CETA it suggests to me that the Tánaiste doesn't want to address it. He would much rather keep people’s attention focused on the money already being made as it’s a much easier case to sell.
As regards the idea that our relationships with Europe or Canada might be damaged, this argument strikes me as if it is designed to trigger people’s emotions instead of discussing the pros or cons of the Investment Court System. There is significant opposition to the ICS inside the EU and in Canada as well. Other countries won’t suddenly dislike us if we reject the ICS. Cyprus has already rejected CETA and there are still 11 other countries who have yet to vote. If we reject CETA on the basis of the ICS, the businesses in Canada and the rest of the EU who are currently profiting from the provisional ratification are not going to let the other 98% of the agreement float away. Every pro-CETA advocate that testified before the committee said that carving off the ICS from CETA, or renegotiating the deal would not be easily done, but no-one said it couldn’t be done. The ICS can be removed from the agreement, it just needs enough people to call for it to happen. There are people across the EU and in Canada calling for it to happen and it would be a huge boost to their efforts if Ireland were to reject CETA officially.
On the question of whether the ICS is a better system than the ISDS, we can’t know the answer to that until the ICS is up and running. If we then discover we don’t like the answer, it will be too late to do anything about it. Fundamentally the ICS is a legal system. The investment rules of that system are set out in chapter 8 of the agreement. Some of the text protects what a country can do (‘the right to regulate’), and some of the text protects what a company can expect (‘fair and equitable treatment’), but there is no clear line to show where a countries rights end and a company’s rights begin. For me, the most compelling testimony came from the Professors of Law on the Anti-CETA side, Dr. Laurens Ankersmit and Dr. Oisín Suttle, and the only lawyer who spoke on the Pro-CETA side, Mr. Reuben East. Mr. East is a lawyer who defended Canada in a number of ISDS cases against different corporations. He was the only person who made me think for a moment that the ICS could legitimately be a more progressive version of the ISDS. He interpreted some specific sections of text in the agreement in a way that suggested maybe countries would have an iron clad right to regulate but ultimately that was only his interpretation of the text. When the real live cases start to happen it will be the job of the lawyers involved in those cases to begin interpreting the text and we have no idea who they are yet or how they will interpret it. Dr. Suttle summed it up like this:
Ultimately, what matters is how these things will be interpreted by the CETA tribunal when the time comes. The Court of Justice cannot tell the members that. I cannot tell them that. Nobody on this court can tell them that because ultimately the proposal is that we establish a tribunal, give it a whole lot of language, much of which is quite evaluative. When exactly is something ‘manifestly arbitrary’? I am guessing the members and I would disagree on particular instances. We are then tying our hands and saying that we will comply with what that unknown group of adjudicators in the future will say. They might interpret it in ways that are entirely compatible with a state's right to regulate or they might not, but it is important to put a question mark next to that.
That is an incredible amount of power that we will be handing to a group of people we know nothing about. We will be handing them the power to decide if Ireland should have to pay corporations enormous sums of money, for the privilege of changing our own laws, in a way that might upset their corporate profits. If the lawyers on these tribunals turn out to be the same lawyers who have made decisions in past ISDS cases then we could be in serious trouble.
The housing crisis is high on the list of most Irish voters concerns. The biggest landlord in Ireland is the Canadian company IRES-REIT. If we pass laws to impose rent controls, or anything else that might change the future profit expectations for IRES-REIT they would be well within their rights to use the ICS to sue us. Ask yourself how comfortable you are with the idea that an unknown group of lawyers could play a huge role in influencing how we solve our the housing crisis.
What about the Climate Action Bill?
In 2018 the U.N.’s Intergovernmental Panel on Climate Change told us we had 12 years to reduce global emissions by half if we wanted a 50% chance of avoiding catastrophic global heating.
Right now Ireland stands ready to pass a Climate Bill that would put into law emissions reductions of 7% every year for the next ten years. The Climate Bill will only dictate that we need to make those 7% reductions, it won‘t dictate how we make those reductions.
It is when our politicians look for the specific ways to make those reductions where the Investment Court System could use its power to prevent us from doing what is necessary.
Importantly, with the Climate Action Bill as it is currently drafted there is a ’Limitation of Liability’ clause which states:
No remedy or relief by way of damages or compensation is available with respect to or arising out of any failure, of whatever kind, to comply with any provision of this Act or any obligation or duty created thereunder.
This basically means that you, as a citizen of the State, can’t sue the government if they don’t achieve the carbon emissions reductions as set out in the bill. As Independent Senator Alice Mary Higgins pointed out in a recent Just Transition Greens webinar on the Bill (starts at about 30:11):
Really crucially that provision (the Limitation of Liability clause) I believe has to be read alongside the fact that we are having a debate about the ratification of CETA. Because in that context we see at the exact same time (we are bringing in) a provision to limit the liability for compensation when it comes to individuals, (we are also bringing in) a brand new liability for compensation when it comes to corporations. One that doesn’t exist currently. We’re looking at a loading of the scales where potentially action comes with a very high price tag, and inaction will not come with that same high price tag.
With one hand were taking the power of citizens away, and with the other we are handing new powers to corporations. With one hand we are removing the incentives for climate action and with the other we are increasing the incentives for not acting at all.
Stopping the ratification of an EU agreement may seem like an uphill battle but surely at some point we have to draw a line in the sand and say ‘enough is enough’?
‘System change, not climate change’ is what we chant on the street. When we talk about needing system change the ICS/ISDS is a piece of the system that immediately needs to change.
What can you do?
We have to stop the ratification of CETA until such a time as the ICS is removed from it. We can do that by lobbying our TDs more than the corporations and the law firms and the business associations are doing. We need to raise our voices higher than theirs.
There are a number of easy actions you can take...
Uplift have an email campaign to call on your local councillors to make your area a CETA-Free Zone. Click here to join that campaign.
Stop CETA Ireland has set up a handy email tool that will automatically populate an email for you to email your TDs. Just follow this link: https://linktr.ee/StopCETAIreland
If you are a business leader you can sign an open letter against CETA here: https://www.uplift.ie/business-owners-ceta/
If you want to write a personal email to your TDs, that’s great. Even a very short email to your TDs saying you're concerned about the Investment Court System as part of CETA and you don’t want them to vote for it would be brilliant. To find your local TDs and their contact details visit www.whoismytd.com
You can also email the EU Affairs committee members and ask them to recommend the Dáil votes against ratification. You can find a list of the committee members here: https://www.oireachtas.ie/en/committees/33/european-union-affairs/membership/
As I pointed out in previous blog posts, many TDs don’t know the full ins-and-outs of what they are asked to vote on. If you do email your TDs you are likely to get a standard email response outlining their parties position on CETA. If you’d like to go one step further and get back to them you can check their responses against the Comhlámh Fact Check document.
For more information you can also check out the StopCeta.ie website and follow the hashtag #StopCETA on Twitter. This has been a very long post. Thank you for getting this far. If you found it informative please share it.