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The TransCanada Corporation are using investor privileges in the North American Free Trade Agreement (NAFTA) to demand USD $15 billion from the US government following its rejection of the Keystone XL tar sands pipeline .
According to the report ‘Oil Corporations vs Climate; how investors use trade agreement to undermine climate action’ the Keystone case illustrates the threat of the increasingly common investor-state dispute settlements (ISDS) that are contained in the draft EU-Canada Comprehensive Economic and Trade Agreement (CETA) and the proposed EU-US Transatlantic Trade and Investment Partnership (TTIP).
Colin Roche, extractives campaigner for Friends of the Earth Europe said: “Tar sands are a climate killer and the Obama Administration was right to block Keystone XL. Trade policy should not be a backdoor for corporations to challenge or dissuade measures to tackle climate change. It’s time to drop investor-state dispute mechanisms in any form, stop harmful trade deals and start taking necessary action to stop climate destruction.”
Even during the years the Paris climate agreement was being negotiated the EU was busy providing, through TTIP and CETA corporations more opportunities to challenge climate action
Cécile Toubeau, campaigner for Transport & Environment said: “This is yet another example how ISDS halts climate action. Worryingly, the revised Commission proposal on ISDS does not prevent this type of undemocratic privileges for foreign investors, which comes at the expense of citizens and the environment.’’
Investment privileges empower foreign corporations to directly challenge democratically agreed laws and policies in private trade tribunals. If TTIP and CETA are passed with ISDS tens of thousands more corporations will be able to sue the US, Canada and EU member states for actions they take to protect citizens and the environment.
Courtenay Lewis, from the Sierra Club said: “We’re already seeing just how costly and dangerous reckless trade deals can be for U.S. taxpayers. To solve the climate crisis, we cannot afford more irresponsible trade deals that put the interests of fossil fuel corporations above the health of our communities, the stability of our climate, or the principles of our democracies.”
The European Commission has presented the Investment Court System as an alternative to ISDS in the ongoing EU-US trade negotiations. Civil society is united in opposition to the proposal, which fails to fundamentally reform the flawed system of investor protection, and is legally questionable .