Alice-Mary Higgins (Independent) | Oireachtas source

I thank the Chair for allowing me to join the meeting. When we speak of the years that have gone past in developing this, we know that our responsibility is to the years of the future. It was the European Commission's decision to try to incorporate these elements on a combined basis, which was then challenged and overturned in the ECJ in 2017. The combination of investor court systems and trade deals has delayed many of our trade deals. It is noticeable that further bilateral and other trade agreements are negotiated much more quickly when they do not contain an ICS or ISDS. There has been a blurring of the lines between bilateral and investor court. There is no argument about bilateral arbitration mechanisms, such as those we have seen between the parties who signed the agreement. However, the concern is that the investors do not sign up to the agreements. They did not sign up to the labour chapters, the environment chapters, or to anything else. The concern relates to why investors are being included in the arbitration mechanisms. Rather than being a stepping stone, CETA, as the first attempt to respond to the criticisms from unions, environmental groups, and citizens across Europe, has clearly failed to satisfy them. They are not happy with it because its changes have been criticised as being largely procedural. In fact, we are now a stepping stone beyond that, where new treaties that are being negotiated include arbitration between parties, but do not include investor arbitration.

In the United States-Mexico-Canada agreement, Mexico is also under ISDS, but only after domestic courts have been exhausted. We do not have a requirement that domestic courts would first be exhausted in CETA. Canada and the US both made a point of ensuring that investors would not be able to take them to court. An example of why that is important was the Keystone pipeline, which was subject to €9 billion potential case. It was one of the most crucial steps in environmental regulation. There is no doubt, I am sure that the witnesses will agree, that it would be much easier to proceed with banning that pipeline in a context where a €9 billion suit does not hang over the American Government for doing so. It was the first phone call, as I recall, in the positive relationship between the US and Canada.

In that context, it seems to me that this was the first attempt to respond to critics. It has not met the standards that are needed. Why not continue with professional application and let the new UN multilateral court system take its place? Those negotiations are continuing and do not need CETA or ISDS as a stepping stone. The conversation has moved past that.

On specific drafting aspects, again, nobody is questioning the right to regulate. Perhaps we might not need another response on the right to regulate. The concern is the consequence of regulation and, specifically, Article 8.9 under which it is clear that the mere fact of regulation and of expectations are not in themselves a breach.

However, regulation combined with expropriation, discrimination or unfair and inequitable treatment creates a liability for compensation. In Article 8.9.4, on the removal of subsidies, the choice to specifically protect parties from having to compensate investors is provided for. There is no such language protecting parties from having to compensate investors under article 8.9.2, which has regard to regulation. Is it not the case that the same grounds of expropriation, discrimination and unfair and inequitable treatment, which are still there, are, and have been, used in the majority of ISDS cases?

I am particularly looking at the energy charter. Vermilion Energy, a company based in Canada, threatened to sue France on the basis of indirect expropriation, which led to a dilution of France's climate law. Mr. Schlegelmilch will be aware of this. I could also list the Vattenfall case or any number of other cases taken under the Energy Charter Treaty. Mr. Schlegelmilch has mentioned the concerns of member states. Many member states urgently want certainty so that they will be able to regulate without potentially having to face compensation claims. That is the certainty that is needed for them to move past this. Commission Vice President Dombrovskis spoke about how withdrawal from the treaty would trigger the 20-year sunset clause.

Will the witnesses comment on the fact that compensation is still available and the fact that many of the grounds are the same? Will they comment on the fact of the 20-year sunset clause being cited as the main reason we cannot leave the treaty and the fact that a 20-year sunset clause would, if I am correct, be triggered were we to fully ratify CETA? Why not continue with provisional application until we have a better multilateral system that would have the imprimatur of the UN, which would give comfort to all of us, and which would involve ultimate accountability to the International Court of Justice, which would give people a lot more confidence?

The 2019 ruling has been mentioned frequently but this specifically required the Commission to make changes, not in terms of regulatory co-operation or support schemes, but with specific regard to the dispute settlement mechanisms to ensure equitable access for small and medium enterprises. According to the ruling, a great deal of detail on this was meant to be provided to all of us when making our decisions on ratification. I am sure Mr. Schlegelmilch and Mr. Brown will be aware that one of the big concerns is that, while we may have permanent arbitrators, they are to be paid on a per diembasis. This has been identified as a concern with regard to the ICS and arbitration mechanism. Perhaps the witnesses will comment on those key issues. That would be very useful. We are looking for certainty for the next ten years in terms of regulation.

With regard to privatisation and public services, non-discrimination was mentioned. Am I correct that if services currently provided by private actors, which may be Canadian companies, were to be returned to public delivery, cases in respect of discriminatory treatment may result? That is the ratchet clause. With regard to areas of exclusion, Ireland had a very short list of excluded areas in comparison to many of our European colleagues.