Socialising losses, privatising gains

Eurodad’s members SOMO and Both ENDS in collaboration with Transnational Institute and Milieudefensie (Friends of the Earth Netherlands) have published a report titled Socialising losses, privatising gains. How Dutch investment treaties harm the public interest. This paper gives a critical civil society perspective on the clear tension between BITs protections and the democratic right and duty of the state to regulate in the broader public interest.

Over the past two decades a complex web of more than 3,200 investment agreements has developed globally, mostly in the form of Bilateral Investment Treaties (BITs). These treaties grant investors far-reaching rights, limiting state control over transnational capital and constraining governments’ policymaking space. A key provision in many of the investment agreements is a controversial mechanism that allows corporations to sue governments in private international arbitration tribunals outside the regular national court system. Investors’ claims through ‘investor-state dispute settlements’ (ISDS) have skyrocketed by more than 400% since the early 1990s.

These ISDS lawsuits increasingly challenge public interest environmental and health policies, and include cases (in the global north and south) where corporations use the ISDS framework to challenge a plethora of public policy measures. ISDS lawsuits are sparking an increasingly heated public debate on the necessity of reform of the current framework, especially in the context of negotiations around the EU–US Transatlantic Trade and Investment Partnership (TTIP) and the Canada–EU Comprehensive Trade and Economic Agreement (CETA). The debate centres not least on two aspects of investment agreements – first, that their contribution to their stated aim of attracting foreign capital is at best inconclusive; and second, that their adverse impact on policy space and public budgets cannot be ignored.

The Netherlands takes a central position in the current debate around BITs and international investment agreements (IIAs). More than 10% of all known investment treaty claims make use of Dutch Bilateral Investment Treaties (BITs).The growing controversy surrounding BITs – and in particular the mounting critique of Dutch BITs as being excessively investor-friendly, to the detriment of the policy space of developing countries– has led the Dutch trade department to announce a review of Dutch bilateral investment treaties with developing countries.

Click here or on the download button below to read the full report.