Sunday

4th Dec 2022

EU governments paid €3.5bn in investor claims

  • Malmstrom - no decision until 2015 on whether investor clauses will remain in TTIP (Photo: eu2013.lt)

EU governments have been forced to pay out more than €3.5 billion in compensation to firms under controversial investor protection rules according to new research published on Thursday (4 December).

The survey, by the NGO Friends of the Earth Europe, has identified at least 127 individual cases which were brought against governments since 1994 in claims totalling more than €30 billion.

Read and decide

Join EUobserver today

Become an expert on Europe

Get instant access to all articles — and 20 years of archives. 14-day free trial.

... or subscribe as a group

But the campaign group says difficulties in acquiring information about "investor-state dispute settlement" (ISDS) cases, which is not publicly available, indicate that the total is likely to be far higher.

Of the 127 cases, the NGO found out the level of compensation sought in just 62 examples. The precise sum paid out is only known for 14 of them.

The status of ISDS clauses in a possible trade deal between the EU and the US, known as TTIP, has become one of the most hotly disputed issues in the talks.

The mechanism allows companies to take legal action against governments on the grounds of unfair treatment or discrimination in favour of domestic firms, or if new legislation is deemed discriminatory and compromises their business.

Critics say that corporate lawsuits, or even the threat of them, could prevent governments from passing legislation in fields such as health and safety and environmental and social protection.

The research indicates that around 60 percent of the claims related to environmental regulation, and that countries in Central and Eastern Europe, most of whom joined the EU in either 2004 and 2007, were most frequently targeted.

One well-known case is an ongoing dispute between tobacco giant Philip Morris and the Australian government over the latter’s rules requiring plain packaging for cigarettes – effectively a ban on advertising.

However, the question of whether ISDS would prevent governments from being able to take aspects of privatised healthcare back under public control also remains controversial, particularly in the UK.

In 2008 the Slovak government was ordered to pay €25 million in compensation when it sought to re-nationalise the country's health insurance scheme, a case which could strengthen the arguments of campaigners.

The European Commission, which has so far been keen to include ISDS in a deal, temporarily parked the issue by opening a public consultation on ISDS at the start of the year.

In November, six months after the consultation closed, new trade commissioner Cecilia Malmstrom, told MEPs that the commission is still evaluating its findings.

It has promised to present a factual report on the consultation before the end of 2014, but has indicated that no political decision on the future of ISDS will be taken before spring 2015.

Trade officials hope to conclude a draft deal with the Americans in late 2015.

The research is another reminder of the uniquely high level of public interest in the EU-US trade talks.

Also on Thursday, a petition urging the EU's executive arm to halt the talks reached 1 million signatures, the threshold needed to force the commission to make an official response.

In a bid to assuage public concerns that the talks are surrounded by secrecy, the EU executive has also promised to increase the number of documents related to the talks that it will make available to the European Parliament and the public.

EU unveils plans for global investor court

The EU has unveiled plans to set up a global court to decide on investor disputes with governments in a bid to defuse one of the main controversies in EU-US trade talks.

Swedish EU presidency: 'Ukraine, Ukraine, Ukraine'

Ukraine and a looming economic recession is set to dominate the upcoming Swedish EU presidency, which takes over at the start of next year. Sweden's ambassador to the EU, Lars Danielsson, laid out some of its priorities.

French official accused of conflict over EU fish lobby job

A senior French official is being accused of conflicts of interest for spearheading a leading role in Europeche, a fishing-industry lobby group based in Brussels. The hire comes as the EU Commission threatens a lawsuit against France over fishing.

Portugal was poised to scrap 'Golden Visas' - why didn't it?

Over the last 10 years, Portugal has given 1,470 golden visas to people originating from countries whose tax-transparency practices the EU finds problematic. But unlike common practice in other EU states with similar programmes, Portugal has not implemented "due diligence".

Stakeholders' Highlights

  1. Nordic Council of MinistersCOP27: Food systems transformation for climate action
  2. Nordic Council of MinistersThe Nordic Region and the African Union urge the COP27 to talk about gender equality
  3. International Sustainable Finance CentreJoin CEE Sustainable Finance Summit, 15 – 19 May 2023, high-level event for finance & business
  4. Friedrich Naumann Foundation European DialogueGender x Geopolitics: Shaping an Inclusive Foreign Security Policy for Europe
  5. Obama FoundationThe Obama Foundation Opens Applications for its Leaders Program in Europe
  6. EFBWW – EFBH – FETBBA lot more needs to be done to better protect construction workers from asbestos

Latest News

  1. EU must break Orbán's veto on a tax rate for multinationals
  2. Belarus dictator's family loves EU luxuries, flight data shows
  3. How Berlin and Paris sold-out the EU corporate due diligence law
  4. Turkey's EU-funded detention centres ripe with abuse: NGO
  5. In green subsidy race, EU should not imitate US
  6. EU Commission proposes suspending billions to Hungary
  7. EU: Russian assets to be returned in case of peace treaty
  8. Frontex leadership candidates grilled by MEPs

Stakeholders' Highlights

  1. European Committee of the RegionsRe-Watch EURegions Week 2022
  2. UNESDA - Soft Drinks EuropeCall for EU action – SMEs in the beverage industry call for fairer access to recycled material
  3. Nordic Council of MinistersNordic prime ministers: “We will deepen co-operation on defence”
  4. EFBWW – EFBH – FETBBConstruction workers can check wages and working conditions in 36 countries
  5. Nordic Council of MinistersNordic and Canadian ministers join forces to combat harmful content online
  6. European Centre for Press and Media FreedomEuropean Anti-SLAPP Conference 2022

Join EUobserver

Support quality EU news

Join us