Dr. Laurens Ankersmit:

I thank the Chairman and members of the joint committee for inviting me to appear before them today and to provide them with evidence on the important matter of the ratification of the Comprehensive and Economic Trade Agreement between the EU and its member states and Canada. I sent the committee a short position paper, which I hope it has received.

I will briefly outline three key points on this position paper. CETA is currently in the process of ratification across member states and there are several member states still very critical of the agreement's ratification, including the country I am from, the Netherlands, whose senate still needs to approve CETA and where there is currently no majority for it.

CETA, particularly the changes made to the investment chapter in the agreement, is often presented as progressive and an agreement that has accommodated certain changes and criticisms that have been addressed. I have three points that criticise this description of CETA, and particularly the changes in the investment chapter, as a progressive agreement.

The investment court system, ICS, maintains this extraordinarily powerful judicial system that allows foreign investors to bring claims against governments directly without exhausting domestic remedies. Not only are foreign investors not required to go to domestic courts first, which is customary in international law, but they can go directly to the investment court system. They can also enforce awards from the investment courts system in front of any courts in the world through this convention or system set up through CETA. It is an extraordinarily powerful tool that foreign investors have and which is maintained in CETA. That foreign investors can sidestep domestic courts gives foreign investors an important tool to pressure governments because they are not required to go through domestic courts, which may be in a better position to value and appreciate the local context and constitutional matters, as well as issues of domestic law that may be present in a dispute between a foreign investor and government.

Related to this first point is the issue that national parliaments are not in the position to easily change the text on which the ICS tribunals would be ruling. Normally, for Irish courts, for example, they would rule on statutes or other provisions of law made by the Irish Parliament and parliaments can change those relatively quickly. With CETA, the text would not be so easily amended. If it is difficult to ratify the agreement, it is even more difficult to amend it, as we would have to go through the same process. The interpretation of the fair and equitable treatment standard can be done through the CETA joint committee, for example, but it is very difficult to achieve such a joint interpretation and there is still the question of whether the ICS tribunals would abide by the joint interpretation issued by the CETA joint committee.

A second indication that the agreement is not that progressive at all is that all investments are protected under the investment chapter. Despite the fact that 80% of coal reserves, half of gas reserves and a third of the oil reserves in the world need to stay in the ground - we need to stop investing in fossil fuels - CETA is encouraging foreign investors to invest in fossil fuels. This is important as the safeguards introduced in CETA will continue past practice under investor-state dispute settlement systems. All the safeguards introduced are there merely to continue the process. The language speaks of "greater certainty" and clarification but the past practices are continued through arbitration. A quarter of all disputes before the International Centre for Settlement of Investment Disputes, ICSID, World Bank investment system come from the oil, gas and mining industry.

The success rate in general of these investment disputes is 28.7%. That is a gigantic win percentage for investors. To compare that to the European Court of Justice, if one sues the EU institutions for damages, one's chances of success are 4.3%, so one's chance under the ICSID system is five times higher.

In terms of balance, the ICS is a step backwards compared to the modest steps that are being made in investment law to allow for counterclaims and for claims from third parties and to give affected communities an effective say in disputes that involve foreign investors, affected communities and states. The ICS is only an avenue for foreign investors. Only foreign investors can bring claims. Parties themselves cannot bring counterclaims and there is no possibility for local communities to bring claims against foreign investors under the ICS system.

The system is not as progressive as presented, for instance, by Vice-President Frans Timmermans or a previous trade Commissioner, Cecilia Malmström. In light of the relatively high standard of judicial protection we have in Europe and in Canada, there is no need to ratify CETA for that reason. If members have any questions, I am happy to answer them. I thank members for their time and consideration.