A statement ensuring that the right to regulate by Sovereign Nations takes precedence over an investor’s right to invest must be placed at the heart of the Government’s response on ISDS provisions.
MPs in the House of Commons Business, Innovation and Skills (BIS) Committee have demanded that "a right to regulate" be enshrined in the controversial Transatlantic Trade and Investment Partnership (TTIP) between the European Union and the United States.
There are growing fears - highlighted in today's Ecologist with reference to Canada's salutary experience - that TTIP's fiercely investor-state dispute settlement (ISDS) mechanism would allow foreign companies and private investors to sue governments for enacting 'business unfriendly' legislation.
Where countries legislate for environmental protection, labour standards or the state's right to run public services - like the National Health Service - ISDS could allow corporations to sue governments for the loss of future profits in secret tribunals.
As the report highlights, ISDS could also allow "the possibility of US oil companies challenging environmental regulations on fracking." Other examples include challenging regulations on chemicals in food and cosmetics as well as EU restrictions on genetically modified organisms.
The Committee therefore demands that "a statement ensuring the right to regulate by Sovereign Nations takes precedence over an investor's right to invest is placed at the heart of the Government's response on ISDS provisions", also insisting on "the exclusion of any clauses which would require the State to pay in all outcomes."
And - with specific reference to public concerns over NHS privatization - the MPs "urge the Government to ensure that an unequivocal statement guaranteeing the protection of public services at present - and the right to expand them in the future - is set out in any ISDS provisions."
The demands are made in a new report just published by the (BIS) Committee which concludes: "We do not believe that the case has yet been made for ISDS clauses in TTIP."
Government slammed for ISDS silence
The MPs also add a barb aimed squarely at the British government: "The European Commission is currently consulting Member States on the ISDS provisions. We are deeply concerned that the UK Government is not planning to submit a formal response to that consultation.
"We disagree with this approach. We argue that a formal response should be submitted and for that response to be made available for public scrutiny."
The Committee argues that the Government's secretive approach on the ISDS issue "does not give the impression that the Government is treating seriously the concerns that have been raised about the range or use of such clauses and serves only to fuel the existing scepticism held by opponents of TTIP.
"It also has the potential to leave the UK on the margins of any debate to better frame ISDS negotiations. We recommend that the Government produces a formal response to the consultation exercise and for it to be published at the same time it is submitted to the European Commission."
This is not the first government report to question the need for ISDS clauses. On 10 March, the House of Commons Environmental Audit Committee (EAC) argued that the trade deal should not allow US companies to sue European nations when they pass environmental laws that hurt their profits.
The EAC also found that the trade deal could result in a "race to the bottom", where attempts to align EU environmental safeguards to those in the US - which are generally seen to be weaker - could undermine or dilute environmental protections.
Secretive negotiations against the public interest
The Committee also takes aim at the secretive nature of the negotiations between the EU anmd the US on this major free trade deal, which it says has resulted in an "oversimplification and misrepresentation of arguments on both sides."
"Everyone involved in the debate on TTIP-campaigners, lobbyists, the UK Government and the European Commission-must ensure that an evidence-based approach is at the heart of any TTIP debate."
Adrian Bailey MP, Chair of the BIS Committee commented: "More detail needs to be made available to allow greater public scrutiny of this extensive trade agreement. Unfortunately, in the absence of that detail or undertakings that negotiating texts will be made public, the debate on the trade agreement has become polarised."
The high degree of secrecy means it is impossible to monitor or evaluate what issues are being taken into account, the report explains. This echoes concerns previously raised by MPs about whether or not environmental risks are being taken into consideration.
However, because the negotiation process is ongoing, and much of the detail has yet to be agreed on or made public, it is "not possible to come to a definitive conclusion on the benefits or risks of an extensive trade agreement", the BIS Committee states.
The Committee argues that the European Commission and the UK Government "must shoulder some of the blame" for the fact that only a minimal level of information has been made available about TTIP. Lord Livingston, Minister of State for Trade and Investment, agreed, telling the Committee that "a greater level of transparency was necessary and that this was now being addressed."
The European Commission recently published some EU negotiating texts; however, it refuses to publish agendas or minutes of meetings held. It also argues that for data protection reasons, it cannot publish the names of meeting participants without their consent.
Sign an EU-wide petition against TTIP - it already has 1.6 million signatures and has a target of 2 million by October 2015.
Oliver Tickell edits The Ecologist.
The report: 'Transatlantic Trade and Investment Partnership', House of Commons Business, Innovation and Skills Committee, Eleventh Report of Session 2014-15.
This article is an expanded and edited version of one originally published on DeSmog UK.