Dáil Éireann Debate, Wednesday - 29 November 2017
80. Deputy Catherine Connolly asked the Taoiseach and Minister for Business, Enterprise and Innovation the Government's position on the potential inclusion of investor court mechanisms in a trade negotiation mandate with the UK post Brexit in view of the fact that the legality of such mechanisms is currently being challenged at the European Court of Justice; and if he will make a statement on the matter. [50856/17]
Amharc ar fhreagraIn late 2015, the European Commission proposed a new approach to investment protection based on an international Investment Court System (ICS) to replace the historical Investor State Dispute Settlement (ISDS) system which required updating. ICS goes a long way to meet the concerns on transparency, legitimacy and public interests that had arisen under ISDS.
The ICS system is composed of a first instance tribunal and an appeal mechanism based on clearly defined rules and operating on similar principles to the WTO Appellate Body, with qualified judges and transparent proceedings. The ability of investors to take a case before the Tribunal is precisely defined and limited to cases such as targeted discrimination on the base of gender, race or religion, nationality, expropriation without compensation, or denial of justice. Forum–shopping (i.e. seeking to select from a number of different options the option perceived to most likely offer the most favourable outcome) will not be possible. Claims deemed to be frivolous will be dismissed quickly, and multiple and parallel proceedings will be avoided.
The implications of the ICS for Ireland are viewed as positive as they bring greater clarity to Irish business, especially SMEs, on the modalities of an open and transparent dispute resolution system as well as confirming that a State can never be forced to change legislation, only to pay fair compensation in cases where the investor is deemed to have been treated unfairly.
The aim of the European Commission is to establish a Multilateral Investment Court, modelled on arbitrator panels currently operating under the WTO, and other Investment Tribunals. It will build on the EU's approach on its bilateral Free Trade Agreements (FTAs) and be a major departure from the system of investor-to-State dispute settlement (ISDS) based on ad hoc commercial arbitration. The recently concluded EU-Canada trade agreement - CETA - and the EU-Vietnam trade agreement both contain a reference to the establishment of a permanent multilateral investment court. Work continues at EU level on this matter.
In the context of a possible EU-UK Free Trade Agreement, which is the stated objective of the UK Government, it is far too early in the Brexit negotiation process to know what the precise trading relationship will be. In that regard, Ireland will, in due course, be advocating for as comprehensive a trading relationship as possible and this should include appropriate governance and implementation mechanisms.
