CIEL and Friends of the Earth filed a complaint to the European Ombudsman about the problematic public consultation on the Multilateral Investment Court, which was too little and too late to allow the public to provide meaningful input.
The Multilateral Investment Court is an EU-proposed global court for corporations — one that would deepen the mismatch between the strong privileges enjoyed by corporations around the world and the weak protections for local communities and people who are impacted by corporate operations. The court would institutionalize and entrench the current investor-state dispute settlement (ISDS) system, which allows companies to sue countries for millions of dollars when their public interest laws threaten the companies’ (real or projected) profits. The United Nations Commission for International Trade Law (UNCITRAL) is discussing the Multilateral Investment Court as an alternative to the current system, among other reforms to ISDS.
In early 2017, the European Commission ostensibly held a public consultation on the establishment of a multilateral court to settle investment disputes. Rather than a meaningful inquiry into the best way to deal with the problems of ISDS, the consultation was a thinly veiled attempt to justify the decision already made by the Commission to strengthen international protections for investors.
First, this consultation was held long after any of the public’s opinions about this proposal could be taken into account. In fact, by May 2015, the Commission published a concept paper outlining its commitment to creating an international investment court, and by October 2016, the European Union signed a trade deal with Canada (CETA), an international agreement that also included this commitment. The Commission did not begin its consultation on this commitment until well after it had already begun creating the court, preventing the public from providing input at a time when it could actually inform decision-making.
Further, the structure of the consultation prevented meaningful public input. The narrow multiple-choice questions didn’t provide space for the public to express substantive comments, like proposing alternatives to the multilateral investment court or reflecting on whether the proposal would make the problems of ISDS worse. Many of the questions were written in technical language, further limiting the ability of the public to respond.
Instead of a meaningful consultation to gather input and inform future action, the Commission’s consultation is to be a poorly disguised attempt to justify the Commission’s decision to strengthen investment protections, in spite of the public’s nearly unanimous opposition to it. Before holding the consultation, the Commission openly admitted that their primary goals in creating the court were to address the crisis of public perception around ISDS and to protect and strengthen that regime. Thus, it should be no surprise that the questionnaire was worded in a way that allowed answers to be misinterpreted as supporting the proposal, and that the Commission’s characterization of their results was extraordinarily misleading.
In response, CIEL and FOEE filed a complaint to the European Ombudsman, identifying how the consultation and the presentation of its results amount to maladministration. The Ombudsman can issue opinions on the legality of the Commission’s actions and provide recommendations to bring the Commission into compliance with EU policies. Although these opinions are not binding, the Commission is often responsive to the Ombudsman’s views.
Beyond the disturbing nature of the Commission’s manipulative use of the consultation process, the failure to hold a proper consultation has far wider implications. Public consultation is a fundamental basis for good policy. The Commission’s poor use of the process has prevented a deeper and more meaningful examination into how to fix the problems of ISDS. It has also led to an important missed opportunity to work with other nations on a multilateral basis to address this pervasive problem.
This is unfortunate, when so many other, better, options exist to address ISDS. The best outcome of a multilateral process (such as the UNCITRAL discussions) would be to lay the foundation for a multilateral approach to eliminating ISDS for once and all. Though less comprehensive, other approaches — such as allowing counter-claims by states, excluding cases that relate to public-interest measures or that are brought by companies that have broken the law, requiring the exhaustion of local remedies, or allowing affected individuals and communities access to the court as full parties — would go much farther to address the problems of ISDS than replacing it with an international investment court that further institutionalizes more of the same.
Unfortunately, the Commission refused to consider any of these options. Instead, it made a decision, long ago and without public input, that it would prioritize special rights for corporations above all else, and it seems committed to this decision no matter the ramifications.
By Morgane Perez-Huet, Geneva-based intern
Originally posted on August 23, 2018