Paul Murphy (Dublin South West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

5. To ask the Minister for Jobs, Enterprise and Innovation the progress of the Comprehensive Economic and Trade Agreement, CETA, between the European Union and Canada; the status of the agreement's investor state dispute settlement, ISDS, mechanism; if the mechanism will threaten the right of European governments to regulate in the interests of workers, consumers, and the environment; and if he will make a statement on the matter. [41852/15]

Paul Murphy (Dublin South West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

What is the status of the CETA agreement between the EU and Canada? In particular, I would like to ask about the ISDS within the agreement. I refer the Minister to his comments a few weeks ago when he assured us that the Transatlantic Trade and Investment Partnership, TTIP, agreement will not contain a similar ISDS. Is it not the case that US corporations will be able to use the ISDS under CETA as a back door to sue European governments, including the Irish Government, that interfere in any way with their right to profit?

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

Increased exports have played a major part in Ireland’s economic recovery. Of the approximately 135,000 people back at work, it is estimated that close to 50% have come directly from export earnings. Agreements that improve the access to markets for Irish enterprises are strongly supported, therefore, by Ireland.

With regard to the Canadian agreement, political agreement on the key elements was announced in October 2013, and the conclusion of negotiations were announced at the EU-Canada Summit on 26 September 2014. The agreement covers virtually every aspect of economic activity, and it is extremely important for Ireland. It offers significant opportunities for growth in trade with Canada.

The agreement is currently at the legal scrubbing stage. Once this phase is completed, it will have to be ratified by the parties involved, including all 28 EU member states. In Ireland’s case, this will mean a decision of the Houses of the Oireachtas. The ISDS mechanism in the Canadian agreement provides that the mechanism can only be invoked where there is a breach of fair and equitable treatment, meaning one of the following: denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process, including a fundamental breach of transparency, in judicial and administrative proceedings; manifest arbitrariness; targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief; and abusive treatment of investors, such as coercion, duress and harassment.

The Canadian agreement also makes clear that legitimate public policy measures taken to protect health, safety or the environment do not constitute indirect expropriation. Indirect expropriation can only occur when the investor is substantially deprived of the fundamental attributes of property. In Ireland, private property is protected by virtue of Article 43 of our Constitution. The Commission has confirmed that it is considering whether aspects of the EU-US trade agreement investment protection proposals could be incorporated into the EU-Canada agreement as part of the legal scrubbing process. However, any changes to the investment protection provisions would require the agreement of both the EU and Canada. A committee to be established under the investment chapter of CETA can consider whether and, if so, under what conditions, an appellate mechanism could be created under the agreement.

Paul Murphy (Dublin South West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

Does the Minister agree the ISDS under CETA is more expansive than that proposed under TTIP, presuming that deal is concluded? Does he further agree it is at least as expansive, if not more expansive, than that under the North American Free Trade Agreement, NAFTA? Does he acknowledge that NAFTA and the ISDS mechanism have made Canada the most sued state in the world, resulting in damages of almost $200 million being paid over the past number of years to foreign investors? Why on earth do corporations need a separate justice mechanism? Why can they not operate under the law like everybody else where people's rights are protected instead of being given specific rights which are protected by separate court processes? Would the Minister at least admit that if CETA goes through, any US corporation with a subsidiary in Canada will be able to sue the Government under these mechanisms?

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

The Deputy asked why these are in place. He should consider a small Irish enterprise trading in the US. There are 50 different states in which a legal action might be taken to establish its rights under a trade agreement. In many cases, those states do not incorporate into their laws the specific elements of these agreements. The investor dispute mechanism is, therefore, a way of trying to facilitate the capacity to go to one location to establish entitlements under the agreement. It is similar for US companies dealing with 28 different member states in the EU. The difficulty of pursuing cases in different countries has been acknowledged. That is the reason ISDS mechanisms have been developed.

The Deputy is correct that there has been criticism of past agreements. However, the Canadian agreement and the current EU-US agreement are not more expansive in that the same provisions in respect of what can be invoked still apply in both agreements. The changes proposed under the EU-US agreement relate to the process such as the selection of judges who would adjudicate on disputes, the transparency of the procedure and the availability of an appeals mechanism. The EU is considering the possibility of applying those additional procedural protections to the Canadian agreement.

Paul Murphy (Dublin South West, Socialist Party)
Link to this: Individually | In context | Oireachtas source

The ISDS is in place to defend the right of corporations to profit and to say that any interference with that right to profit under the expansive fair and equitable treatment and legitimate expectations provisions constitutes something that they can then sue a state for huge amounts. That can be workers' rights such as in the case of Veolia suing Egypt for increasing the minimum wage; environmental regulation such as in the case of Canadian subsidiary of Lone Pine Resources based in the US suing Canada over a moratorium on fracking or Vattenfall suing Germany over a moratorium on nuclear power; or consumer rights such as in the case of the pharmaceutical giant, Eli Lilly, suing Canada for €500 million under NAFTA. There are repeated examples under NAFTA of corporations suing states that try to defend the interests of their citizens as opposed to corporate entities. Does the Minister agree this represents a serious danger and that the Government should not go along with it?

Richard Bruton (Dublin North Central, Fine Gael)
Link to this: Individually | In context | Oireachtas source

No, the Deputy is misinformed on this. The agreement does not allow companies to contest interference in respect of legitimate expectations. The range of cases that can be taken is narrow. These include denial of justice in criminal, civil or administrative proceedings; a fundamental breach of due process, manifest arbitrariness; and abusive treatment of investors. The agreement explicitly excludes workers' rights, environmental rights, health and safety regulations or similar public policy measures.

They cannot be the basis of any such challenge, so the Deputy is incorrect. Bad investor dispute settlement agreements have been negotiated in the past and the EU is seeking to introduce a new model which will be robust and inspire confidence in citizens and companies alike. That is why the changes introduced in this agreement, which were introduced in the Canadian agreement and are being further evolved in the US agreement, are being put in place.