Mr. Rupert Schlegelmilch:

That was a long list of pertinent issues. I will kick off on some of them and then rely on Mr. Brown to fill any gaps I leave. The main question relies on the hypothesis that we will get the international court system set up. We hope this will happen but we do not know. As the Senator will be aware, international rule-making takes time. Right now, we want to show the world we believe in that which we tell other countries they should buy into. If there is a lot of doubt in Europe, it does not exactly help our case in getting the international system, which will ultimately replace bilateral systems, up and running. That argument can be turned around and one can say that we must do as we preach and make this thing work as well as it can so that it can be a shining example of reform and can convince people that this is the right thing to do.

On the question of the Energy Charter Treaty and the sunset clause, I will not speak for my boss here but the fact of the matter is that these treaties have sunset clauses to increase certainty for investors. It is just a fact of life with which we have to live. I do not believe they in any way prejudge the solution to the question of what should ultimately done with the treaty, which we are trying very hard to reform. We have to be aware of consequences as we deal with the issue.

With regard to the other points the Senator raised, we are particularly aware of the challenge facing SMEs. The issue of access for SMEs was addressed very specifically in the court's opinion. In negotiating the treaty, we have done quite a lot to counter the criticism that the system is only for multinationals with large legal departments. We have tried to include a low-cost option to make it easier for smaller companies to exercise the rights available to them. This starts with very simple things such as videoconferencing, which means that one does not have to travel for in-person meetings or arbitration hearings. There are also deadlines to ensure that things are done quickly. Cases involving SMEs may be heard by a single judge so if one is confident that one's cases is good, one can rely on one voice rather than paying for three. If one wins a case, one does not have to pay anything. The principle that the loser pays, which was not there previously, is also a provision that is friendly to SMEs. There is also a commitment from the EU and Canada to adopt supplementary rules introducing cost ceilings for those who use the ICS unsuccessfully. We are working very hard on this. Of course, it is clear that we have a duty to fulfil. We are working with the Canadians to analyse further options to make this work better.

The Senator raised another question, which had regard to domestic courts. This is a recurring theme. We are very much aware of the model that exists in which one must exhaust one's options in the local courts before one can go to the ISDS process. There are other models. We have chosen one that has more or less the same effect but which is not as categorical. We have a no U-turn clause. If a company chooses to use the ICS, that company cannot go to the domestic courts. This means that any rational investor will go to the domestic courts first to see if he or she can get justice there before going to international arbitration. We have been trying to set this up in a way which has more or less the same effect. Of course, there may be cases in which one believes it is hopeless to go to the domestic courts or where one is concerned about time limits. The matter of time limits is a problem we have all identified. I will not name a specific country but if one is required to go a domestic court first, in some countries one may go bankrupt before getting any result. This may not be the result one wants. Even the timelines involved can make one dubious about cutting off the possibility of going to the ICS immediately. I will cede the floor to Mr. Brown, if that is okay with the Chairman, for some complementary explanations of the issues.