Critics of dispute-resolution measures in the proposed transatlantic free-trade treaty are 'subverting debate' on the issue, the International Bar Association said this week.
The warning comes after several political parties condemned the Transatlantic Trade and Investment Partnership in their general election manifestos.
In a statement 'correcting misconceptions and inaccurate information around the discussions on investor-state dispute settlement (ISDS)', David W Rivkin (pictured), IBA president, and partner at New York-based firm Debevoise & Plimpton, said: ‘The IBA Arbitration Committee and I are concerned that the discussions about ISDS in the Transatlantic Trade and Investment Partnership and the Trans-Pacific Partnership are being compromised because, in some instances, erroneous information is subverting debate.’
Among the misconceptions stated about ISDS, under which complaints by businesses against states for breaching treaty obligations are settled through arbitration, are that:
- Investors always win; in fact states have won a higher percentage of cases than investors, and around one-third of all cases end in settlement;
- ISDS forces states to change their policies and laws. In reality: 'States subject to investment treaty arbitration cannot be ordered to amend their laws or change their policies, and awards issued by investment tribunals do not order states to change their policies or laws.';
- ISDS proceedings are insulated from public scrutiny. According to the IBA, most ISDS awards are published, some ISDS proceedings are broadcast live via web feeds, and the investment chapters in recent investment treaties contain provisions allowing members of the public to attend proceedings.
Opposition to the proposed treaty figures in several party election manifestos, including those of the Green party, Plaid Cymru, the Scottish National Party, and Ukip.
Rivkin revealed that the IBA's arbitration committee is undertaking in-depth analysis of the perceived benefits of ISDS and the spectrum of criticisms and concerns, in order to identify which criticisms and concerns are fact-based and which are not.
The IBA will present its ISDS fact sheet to the TTIP negotiators at a stakeholders’ meeting organised by the US Trade Representative in New York on Thursday.