UNIVERSITEIT VAN AMSTERDAM
The Transatlantic Trade and
Investment Partnership and
Amsterdam
The possible impact of investment arbitration on
environmental legislation
Bachelorscriptie Simon van Domburg 20-6-2016
Naam: Simon van Domburg Studentnummer: 10528113
Opleiding: Sociale Geografie en Planologie Begeleider: Jeroen Merks
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Table of contents
1. Introduction………...3
2. Theoretical framework………...4
2.1 New constitutionalism ………...4
2.1.1 Introduction……….4 2.1.2 History ………4 2.1.3 Neoliberal policies………...5 2.1.4 Market-preserving federalism……….82.2 Multi-level governance………..9
2.2.1 Introduction………...9 2.2.2 History………...9
2.2.3 Centralization and decentralization………...10
2.2.4 Multi-level governance and multi-scalar meta governance………..11
2.3 International treaty arbitration………..12
2.3.1 Introduction……….…...12
2.3.2 Investor-to-state-dispute settlement (ISDS)………...13
2.3.3 Tecmed vs Mexico………...15 2.3.4 Methanex vs USA………..……....15
3. Methodology………..17
3.1 Introduction………...17
3.2 Research questions………....17
3.3 Data collection………...…....17
3.4 Reflection ……….19
4. Empirical Analysis……….. 20
4.1 The Transatlantic Trade and Investment Partnership……….. .20
4.1.1 Introduction………...20
4.1.2 The process………... 20
4.1.3 The potential of TTIP………... 22
4.2
Investment protection in TTIP……….23
4.2.1 Introduction……….. 23
4.2.2 ISDS criticism……….. 23
4.2.3 Investment Court System………...24
4.3 Investment treaty arbitration and environmental legislation………...25
4.3.1 Introduction………....25
4.3.2 Amsterdam: a ‘TTIP free zone’……….25
4.3.3 Possible impact of investment treaty arbitration………...26
4.3.4 The ‘bigger picture’……….. ....31
5. Conclusion………..36
References………... 37
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1. Introduction
On the 29th of June, the majority of the municipality council of Amsterdam voted for a motion, proposed by the political party GroenLinks, to speak out against the Transatlantic Trade and Investment Partnership, also known as the TTIP (Le Loux 2015). The TTIP is a trade agreement under negotiation between the United States and the European Union. The TTIP has been a controversial subject the last few years and is gaining more attention from the public lately (Knottnerus 2016). But what is the main reason for carrying out this motion? What unacceptable implications could such agreement have for the functioning of this local government? The main concern seems to be the “Investor-to-state dispute Settlement (ISDS)” that would be included in the TTIP agreement (Gemeente Amsterdam 2015). The fear of the municipality council is that this arbitrary system would have far-reaching consequences for the legislation and policy of the municipality. ISDS gives corporations the possibility to sue national or regional governments in order to protect their investments. They could for example sue governments for implementing regulations that are in in the public interest. This could also cause a legislative chilling effect (Gemeente Amsterdam 2015). In response to criticism regarding ISDS, the European Commission decided to propose an alternative arbitrary system in October 2015: The Investment Court System (ICS) (European Commission 2015g). This paper addresses the possible implications of ISDS and the new ICS system on the environmental legislation of Amsterdam. Although there have been many trade agreements in the past, the TTIP is quite unique in that it will be the biggest trade agreement ever (Thorfinn 2016). What is also unique about the TTIP is the inclusion of ISDS in the TTIP. Normally, ISDS is only implemented in trade agreements between developed and underdeveloped countries (Thorfinn 2016). One exception is the North American Free Trade Agreement (NAFTA) between the United States, Mexico and Canada; two developed countries (Canada and the U.S.) are included (Van Harten 2015). This makes the TTIP an interesting subject to investigate because it remains to be seen what implications will eventually occur because of the lack of comparable cases. In this paper, I highlight the possible implications of ISDS and ICS for the environmental legislation of Amsterdam according to different actors. I have chosen several actors for interviews that are narrowly involved in the discussion about the possible impacts of ISDS and ICS and who have particular interest and/or expertise in the TTIP and/or investment arbitration. There will also be paid attention to the possible economic gains of the TTIP. The information and opinions provided by the interviews will be supported with information from additional sources. The research methods and sources of information will be elaborated in more detail in the chapter methodology. But this paper will start with explaining the overarching concepts of new constitutionalism, multilevel governance and treaty arbitration, wherein the TTIP can be placed.
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2. Theoretical framework
2.1 New constitutionalism
2.1.1 IntroductionIn the contemporary world there is a development going on whereby the pattern of authority is changing in such a way that capital is gaining more weight and representation in politics on different scale levels (Gill 1998). Dominant economic forces are gaining influence in the global political economy and are becoming more independent from democratic forces. The new form that is evolving is called the new constitutionalism and is driven by neoliberals to ‘lock-in’ neo-liberal reforms into the political sphere in order to protect the property rights and investments of transnational firms (Gill 1998). As will be explained in this chapter, one way to ‘lock-in’ such neo-liberal forms is to enter into trade agreements, such as the TTIP. The concept of new constitutionalism is an important concept in this paper because the development behind this concept is one of the foundations of the critic on the TTIP and ISDS. The assumption of many critics is that the power of capital increases and they assume that The TTIP would be another step into that direction. The information provided in this chapter originates mainly from the work of Stephen Gill. Stephen Gill is a well-known American scientist in the field of political science and has done research in International relations and the global political economy. Another important political scientist I refer to is Adam Harmes. In this section, new constitutionalism will also be related to the concept of multilevel governance by referring to the work of this Adam Harmes. This chapter has the following structure. First, there will be given an overview of the development of this new
constitutionalism in a historical context. Secondly, there will be explained how the new constitutionalism is put into practice by looking at the neoliberal policies that are related to
this concept. Lastly, in the last paragraph there will be elaborated how this new
constitutionalism is related to the rise of federalism.
2.1.2 History
The rise of capital and the rise of the nation-state were more or less simultaneous processes that were occurring through time (Gill 1998). These processes developed at greater speed in the nineteenth century during a period of rapid industrialization. The nineteenth century world order made free mobility of capital possible (Gill 1998). The market became in the nineteenth century more and more self-regulating and liberal democracy dominated the politics in Europe. But at the beginning of the 20th century, the ongoing liberalization and industrialization gave rise to opposition to these liberal policies and social movements called for more democracy and social protection (Gill 1998). These reactions to reassert control over de self-regulating market were manifested in two periods: at the end of the nineteenth century and in the interbellum after the economic crisis of 1929. Polanyi refers to these periods as the ‘double movement’ (Gill 1998). At the end of the nineteenth century this opposition led to more protectionism of the economy, factory acts, and more influence of the state in the economy (Gill 1998). The crisis of 1929 was the cause of the second movement of opposition
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to the liberal climate in the world economy whereby the liberal Anglo-American world order collapsed. After World War II, the governments took again the control over the economy; de degree to which labor and money could be commodified was limited and the mobility of capital was constrained (Gill 1998). Also, the focus lied more upon consumers and producers and on social arrangements that fitted the ideas of John Maynard Keynes.
The new constitutionalism came up in the 1980s and 1990s and can be associated with the rise of transnational corporations (Gill 1998). Legal protections for property rights for investors extended in this period and until today. International agreements, initiated by the IMF and the World Bank, reinforced the implementation of neo-liberal reforms in international, national and regional policies (Gill 1998). These reforms were meant to attract more private investors to the state by improving the political conditions for investors and increase the ‘credibility’ of the country. Characteristic to this new constitutionalism is that democratic forces that would undermine the liberal world economy are being attenuated and coped instead of suppressed, like the in the old constitutionalism (Gill 1998). This is to prevent a new ‘double movement’ whereby democratic forces would implement re-regulation and would gain more control over the global world economy.
2.1.3 Neoliberal policies
The whole idea of the new constitutionalism is to discipline all the economic agents in the market, especially the capital market, and to bring them in line (Gill 1998). That is why you can call the contemporary global governance a form of ‘disciplinary neo-liberalism.’ The whole process of economic growth of states leans on the attempts of states to gain and maintain the confidence of investors and to create a suitable business climate for them (Gill 1998). But not only a well-established market is needed to maintain the structural power of climate, there is also need to use direct power provided by governments to ensure social control and particular regulations. Gill (1998) explains this as followed:
What is new, then, about the present situation is that capital mobility has re-emerged in ways that force states to provide price and exchange rate stability (low inflation and fiscal rectitude) in order to be credible in the eyes of investors. In large part, therefore, the role of capital mobility associated with the power and reach of transnational capital explains the necessity for new constitutionalism today and the growing practice of locking in neo-liberal policies by separating the economic from the political (Gill 1998:25).
These neo-liberal policies take form in the three evolving measures (Gill 1998). Firstly, there are measures that adjust the policy of governments to the market disciplines. This can be done by separating the ‘economic’ from the ‘political’ and to create neo-liberal ‘lock-ins’ in the market policies of governments by providing laws and sanctions that would ensure the private predominance in economic policy. This is not only necessary for maintaining the market values but also to protect capital from democratic forces of below. For example, this can be arranged by creating macroeconomic policy implemented by independent central banks and other international institutions. When a country calls for financial aid by the IMF for example, they have to make certain data public. Data that can also be consulted by investors and used to
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judge the credibility of states. This transparency increases the power of capital, because states have to prove their credibility in the eyes of the investors.
Secondly, there are measures to construct markets by stimulating the process of commodification of labour, land and capital and by creating the field of competition by implementing macroeconomic policies (Gill 1998). The goal of is to protect property rights and stimulate the process of privatization and therefore limit the national interference with these property rights and mobile capital. These measures are especially important for countries of the third world, where basic legal frameworks are not yet in place or where there is a change that governments threaten the property right through nationalization and expropriation (Gill 1998).
Thirdly, measures that contain the dislocations of land, capital and labour that evolved because of the creation of fictitious commodities (Gill 1998). This is to ensure that particular contradictions with the commodification of capital in the economic system will not result in another collapse in the financial system, what happened in 1929 and 2008. Dislocation should also be contained in the commodification of land and labour. For example, to protect the system against social and environmental movements which react to the contradictions in the commodification of land and labour (Gill 1998).
Thus, it is clear that in order to lock-in neo-liberal policies, both compulsive and consensual measures are needed in a democratic world where recognition and representation are so important (Gill 1998). Cooptation with the opposition is also needed, especially in states with a different ruling bloc then that of a neo-liberal state where the bourgeois fulfill a hegemonic role. The World Bank is mainly concerned with the cooptation of oppositions (Gill 1998). It aims to create a hierarchical system of representation whereby the key economic policy areas are detached from democratic participation and responsibility. The World Bank advocates for safely channeling democratic participation in order to protect neo-liberal policies from restrictions, imposed by mass democracy (Gill 1998). Specifically, the World Bank advocates for three elements that form the ‘instruments of restraint.’ The first instrument concerns the independency of the judiciary in the economy (Gill 1998). The judiciary must be independent and able to hold both the executive and legislature accountable and therefore support the liberal business climate and credibility (Gill 1998). The second instrument concerns the ‘separation of powers’ in both a horizontal and vertical way. The horizontal separation of power is based on the trias politica whereby the power of governments was separated in three different branches: the judiciary, executive and legislature power (Gill 1998). In the vertical way, the World Bank advocates for the separation powers by implementing processes of centralization, decentralization and federalism (Gill 1998). A broader vertical separation of power would make it more difficult to change neo-liberal policies and rules because the decision-making process is more complicated and fragmented. This separation of powers provides more stability in rulemaking. However, also beneficial laws and policies for the neo-liberal economy are more difficult to implement. That makes this instrument of restraint a bit ambiguous (Gill 1998).
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The World Bank identifies also a third set of instruments, which have an external character. These three are the most important (Gill 1998):
- International agreements: these are consensuses that strengthen the relations between countries and create more economic dependency (Gill 1998). Examples are the European Union, NAFTA and the World Trade Organization. Trade agreements include new-constitutional lock-ins that protect the property rights of investors whereby often investors have the possibility make use of investor-to-state lawsuits (Harmes 2006).
- Agreements with multilateral organizations: These are consensuses between states and organizations like the World Bank and IMF that would ensure more commitment from countries to neo-liberal polices of these organizations and especially from countries with a weak credibility which can increase their credibility by binding themselves to pay penalties if they are to violate an agreement (Gill 1998).
The process of globalization has in many aspects changed the global trade (Mégret 2009). The development of an open world economy with free trade regulations has resulted in an increasing competitiveness between states and regions (Gill 1998). For regions like the European Union, the keys to a strong economic position are knowledge, innovation, intellectual property, services and the efficient use of resources (Pelkmans 2015). The EU, the US and other countries or regions are constantly searching for ways to strengthen their economic position in the world economy. One way to do that is to sign free trade agreements (FTAs). Free trade agreements are comprehensive agreements between two or more parties
that cover trade in goods, services and investment (Hundt 2015). In the last decennia, there is
a clear tendency towards these trade agreements and the share of economic activity covered by trade agreements is increasing. The prospect of increasing profits and sales seems to be the driving force for countries and groups of countries to sign FTAs (Hundt 2015). However, there are often also other interests at stake. Powerful nations, like the United States, also conduct FTAs with states with rather limited economic beneficial prospects for the US (Hundt 2015). The US and other (upcoming) powers as China, Brazil, India and the EU use these trade agreements to increase their influence on other states. Less powerful states often have to adapt their economic structures to the more powerful actor involved in FTAs which makes them more dependent from this actor (Hundt 2015). Countries also conduct trade agreements on geopolitical motives to for example strengthen military alliances with other countries (Hundt 2015). This motive also plays a role in the negotiations around the Transatlantic Trade and Investment Partnership (TTIP) that are now going on between the US and the EU (EuropaNu). For instance, a possible outcome of these negotiations would be the lift of the gasquotom of the US, which would make the EU less dependent on Russian gas in the future (EuropaNu). Thus, free trade agreements are not only formed on economical motives but also on political and geopolitical grounds.
According to Gill, the new constitutionalism creates a separation between the ‘economic’ and the ‘political.’ By implementing more international regulation that would improve market conditions, the market can operate more independently from democratic forces, such as states
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(Gill 1998). Trade agreements such as the TTIP form important instruments to accomplish such improvements of market conditions.
2.1.4 Market-preserving federalism
This paragraph outlines the argument that is based on the theory that neoliberalism has a tendency towards federalism and Multi-level Governance (Harmes 2006). A division of power reduces the power of any actor involved (Harmes 2006). Coercion of one authority to other authorities requires control over the means to execute the intended policies. But if these means are in different hands, there is no one who can execute coercion (Harmes 2006). The executioner could be restricted in several ways, for example because of insufficient control over particular territories. This is why a federal government structure is very limited because it requires the cooperation of different authorities on different levels. As been stated earlier, this limitation is actually a favorable outcome for markets because already implied lock-in mechanisms are not easy to alter. There are two broad principles that neoliberals advocate in market-preserving federal systems (Harmes 2006). First, centralization of market-preserving policies that would ensure free movement of goods, corporations and goods should not be constrained by sub-national governments in restricting investors to exit or enter their jurisdictions. Secondly, other policy areas like environmental and labour legislation, tax policies and social expenses should be decentralized:
The intent here is to prevent national policies on most economic issues and to confine as many of the market-inhibiting tax and regulatory powers as possible to the sub-national level where they will be constrained by the need to compete for mobile citizens and firms (Harmes
2006:736).
This creates a competition among the different regional and local authorities in attracting firms and citizens. In addition to these principles, Weingast identifies three elements of a federal market-preserving system (Harmes 2006):
- Sub-national governments have a basic regulatory control over the economy
- A common market should be maintained and lower governments should be restricted in implementing regulations that would put trade barriers against the goods and services of other authorities.
- Lower governments also have to be constrained in the use of their budget. They should not be allowed to print money or get access to unlimited credit.
These characteristics of a market-preserving federal system are important for the existence and continuation of the new constitutionalism (Harmes 2006). The next chapter goes into more detail and elaborates multi-level governance and how there will be argued that this system has often features of market-preserving federalism which connects the chapter about new constitutionalism with the next chapter about multi-level governance.
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2.2 Multilevel governance
2.2.1 IntroductionThe multilevel governance theory or MLG is a concept in the political science where domestic authorities and international authorities are interacting with each other (Marks 1993). The concept is originated from studies on European integration. MLG is a part of the trend of shifting from government to governance, influenced by processes of globalization (Pagoulatos & Tsaukalis 2009). The idea of governance is the shift from responsibility and action held and taken by one or several authorities to collective actions and shared responsibilities of multiple social, political and administrative actors (Pagoulatos & Tsaukalis 2009). In the EU, the authority of multiple actors is organized both horizontally (sharing authority to different governments and other institutions) and vertically (public bodies on different territorial levels). The goal of European integration is to not only integrate national governments in European cooperation but also to integrate other domestic, subnational authorities and institutions in processes of governance (Pagoulatos & Tsaukalis 2009). With the TTIP negotiations between the EU and the US there are many interests of different actors involved. It will be interesting to see how the concept of multilevel governance works out in the TTIP negotiations.
2.2.2 History
The concept of multilevel governance in the EU originated from the pursuit to better decision-making procedures through better cooperation among the European Parliament, national parliaments, regional and local authorities and other bodies (Kucler Dolinar 2010). First of all, it is important to address the differences between governance and government. Governments are dealing with various matters affecting individuals within in a particular domain (local, regional, national, international level) (Kucler Dolinar 2010). The idea of governance is much more open and contains alternative systems and procedures.
It includes any activity—group or individual, public or private—that is managed through informal or formal administration. If multilevel governance is to be discussed as a total system, it is important to recognize both the horizontal and vertical components. (Kucler
Dolinar 2010:99).
The idea of multilevel governance came into the picture in the first years of the 1990s, around the debate of the Maastricht Treaty of 1992 (Kucler Dolinar 2010). When exactly the idea of
governance came up is not clear but the concept became the most visible in EU policies in the
beginning.
It were the German states (Länder) who were the driving force for the implementation of the principles of governance in the EU (Kucler Dolinar 2010). They insisted a greater role for them in the EU affairs instead of remaining ordinary administrative units operating within German territory. It became clear that the concept of governance was a more of a wider model and the opposite of a state-centered model (Kucler Dolinar 2010). However, this did not mean that the Länder had a negative attitude towards the national government. National
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governments remained a key role in governance processes (Kucler Dolinar 2010). The purpose of multilevel governance is not that the European Parliament, the European Commission and the European Court of Justice should replace the governments on the national level. The purpose is to make decisions that are widely accepted by involving a great number of actors from different spheres (economical, political, social, environmental) in the decision-making process (Kucler Dolinar 2010). To make changes in the European constitution and to legislative procedures, changes also had to be made within the member states with the implementation and execution of measures down to the lowest level (Kucler Dolinar 2010). This encouraged local and regional authorities to participate more in European policy processes.
The role of different actors in the European Union has increased over the years through several transitions that also increased the competency of the EU (Kucler Dolinar 2010). The first development that contributed to a greater competency was the first direct elections of the European Parliament in 1979. Furthermore, the already mentioned Maastricht treaty, which created the fundaments for multilevel governance in the EU and after that the establishment of the Committee of the Regions in 1994 also contributed to a greater competency (Kucler Dolinar 2010). This committee represented the local and regional interests and is occupied with making the EU more democratic, inclusive and transparent (Kucler Dolinar 2010). Today, it works together with local, regional, national authorities to look into the impact that EU laws will have on cities and regions and to make sure that the Member States take into account local and regional interests when applying these laws. In 1999 the role of the European parliament became greater in relation the Commission (Kucler Dolinar 2010). The European parliament gained more powers and multilevel governance gained a better foothold after the introduction of the Lisbon Treaty in 2009. One of the goals of this treaty was to make decisions more democratic and to participate local and regional actors more actively in the decision-making process (Kucler Dolinar 2010). Another goal was to give more authority to local and regional actors concerning matters that are better to be dealt on a lower level, the principle of subsidiarity (Kucler Dolinar 2010). The Europe 2020 Strategy builds further on the principles of the Treaty of Lisbon and aims for even more multilevel cooperation and pursuits a more active role for all interested parties, like the civil society and social partners (Kucler Dolinar 2010). The strategy emphasizes that specific goals and objectives can and should be achieved by cooperation of all the different government levels and other actors. 2.2.3 Centralization and decentralization
The widening and increased competency of the European Union and the decentralization of authority from national governments to subnational levels is a major challenge for national states (Schakel, Hooghe & Marks 2014). These processes of centralization on the one hand and decentralization on the other make it hard for political scientists to comprehend what is actually going on. The EU has many characteristics of a state, but it is not a state itself (Schakel, Hooghe & Marks 2014). From the outside it looks like a supranational state but if look more closely it is more of an intergovernmental confederation of states (Schakel et al. 2014).
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The question is: Why did the nation states allow the development of a supranational organization that challenged their authority? The reason for international governance is that interaction between states creates problems that can only be solved by working together and demands collective decision-making (Schakel, Hooghe & Marks 2014). The more diverse these problems are, the more depth and scope of interaction is needed to cope with these problems. From a functionalist way of thinking and from an economic perspective the costs of providing international public goods will diminish when international governance, and in particular, European cooperation will take place (Schakel, Hooghe & Marks 2014). Thus, in the view of functionalism, the reason for international governance is mainly the prospect for gaining more economic benefits. Neofunctionalists also argue that the more integration takes place and the more supranational organizations gain power, the more transnational interests arise (Schakel, Hooghe & Marks 2014). With other words, in a functionalist view, the process of European integration and international governance is a self-reinforcing process that will result in an ever increasing demand for integration and governance. Integration and governance in one policy will eventually lead to a demand for international cooperation in other areas (Schakel, Hooghe & Marks 2014).
However, the Europe consists of a great variety of cultures and communities and this causes complications for a supranational authority like the EU (Schakel, Hooghe & Marks 2014). In general, communities demand self-rule and the way authorities rule them and also which authorities rule them is a sensitive issue for communities. The functional need for cooperation and the preference of communities for self-rule creates a tension that has shaped the European Union to the organization it is today (Schakel, Hooghe & Marks 2014).
2.2.4 Multilevel governance and multi-scalar meta-governance
In this paragraph two approaches to governance will be discussed: the approach that correspond with the original ideas regarding multilevel governance and the more neoliberal approach that matches the concept of new constitutionalism, discussed earlier. The focus lies on the relation between the EU and EU policy and subnational governments and urban policies. The development of the political integration of subnational and urban governments is an important process in the relations between governments on different levels (Kokx 2010). Policies are being conducted on the European level and these policies set a framework for national and subnational regulations. Policymaking in the EU has become a complex process because many actors and interests are involved. According to man authors these complex relations are manifested in a multilevel governance structure.
The term refers to negotiated, non-hierarchical exchanges between institutions at transnational, national and local levels and a vertical layering of governance processes at these levels, based on interdependency (Kokx 2010:355).
But other scientists state that relationships between actors within the multilevel network of the EU are less consensual and more hierarchical and that they are organized by a few dominant actors: the EU itself and the national states (Kokx 2010). This is to ensure that neo-liberal policies and instruments can be implemented and relates to the ideas multi-scalar meta- governance and market-preserving federalism, discussed earlier (Kokx 2010).
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The framing of goals and principles regarding urban policy and multi-level governance are being formulated in the Open Method of Coordination (Kokx 2010). One of the goals was to strengthen the local democracy and the decentralization of policies. Later, these principles and goals were incorporated in the Principles of Subsidiarity. Openness, participation, accountability, effectiveness and coherence were seen as essential elements for ‘good governance’ and successful integration of different levels of government (Kokx 2010).
Kokx investigated in her research how local stakeholders perceived governance in the Dutch city Breda and which type of governance, multi-level or multi-scalar meta governance, fitted best in this context (Kokx 2010). Kokx concluded that the urban governance in the context of Breda fitted more with multi-scalar meta governance then with multi-level governance (Kokx 2010). First of all, the focus of the Dutch urban restructuring policy is market-orientated and regulated by the state. Secondly, there were problems between the local government and the central government concerning the accountability of the results of policies (Kokx 2010).. Thirdly, there were also problems with the coordination of policies. A good coordination is needed in order to make effective, integrated urban policies. This problem is caused by the fragmentation in the central government and the lack of a proper integration of direct policy in a vertical way (Kokx 2010).. The stakeholders of the city of Breda stated that the principles of the EU (effectiveness, coherence, openness, accountability and participation) are not well integrated in the governance structure in the Netherlands regarding urban policies (Kokx 2010). This creates tensions between the different levels of governments and this reflects the unequal power relation between national governments and the EU and local governments. The Dutch government has also been a initiator of the transferring of neo-liberal urban policies to the national and European level (Kokx 2010). The case of Breda shows that local stakeholders of a local government experience problems with the urban governance structure of the Netherlands. According to Kokx the problems and dissatisfaction of local stakeholders with the governance structures actually also occurs in other West-European countries (Kokx 2010). The features of this type of governance correspondent well with the features of market-preserving federalism and the new constitutionalism. This discontent with the central governments and vertical power structures could maybe also play a role in the negative attitude of the city council of Amsterdam towards the TTIP.
2.3 International treaty arbitration
2.3.1 IntroductionWith investment treaty arbitration it is possible for foreign companies to sue host states to protect their investments (Foster 2011). This is a relatively new phenomenon that is included in several trade agreements, for example in the North America Free Trade Agreement (NAFTA). Normally, the investor had to redress the issue with local remedies but with this construction, this is no longer necessary (Foster 2011). For the tribunals, it is important to pay equal attention to local governments as for companies to pass a fair judgment (Foster 2011). Assigning too little significance to local governments is of particular concern. Activities of companies that operate in sensitive sectors could strike against local legislation, for example environmental legislation. But, if certain activities are allowed in existing trade agreements
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and an Investor Dispute Settlement is included in this agreement, companies are able to sue the local governments and enervate the local law. This could cause a legislative chilling effect to local legislation (Foster 2011). This means that local governments could be hampered in implementing new laws, mostly for the benefit of the public and the environment, because of the fear for claims of large companies against them. In this section, ISDS will be explained and the standards of protection of investors in international treaties will be elaborated. Furthermore, several examples of ISDS cases with environmental issues will be given.
2.3.2 Investor-to-state-dispute settlement (ISDS)
The ISDS procedure is not a new phenomenon. It is a mechanism that exists in many nowadays bilateral investment treaties (BIT’s). BIT’s are trade agreements between two countries. Many countries, including the Netherlands have included an ISDS procedure in trade agreements with different countries. The goal of an ISDS procedure is to offer investors the possibility to sue governments for violating certain rights of investors. If investors manage to bring the governments to court, the court will decide whether (one of) the standards of protection included in the International Investment Agreement (IIA) have been violated or not. The following standards of protection can be distinguished:
- Expropriation: The rights of investors can be breached through the taking of investment properties by (local) governments (UNCTAD 2007). Expropriation is allowed when the measures are necessary in order to carry out public evident public policy objectives. This includes measures that would protect the environment, public health services and the national economy (UNCTAD 2007). Furthermore, these measures must not discriminate investors in any way and must be made in accordance with due process. The investors losses also have to be compensated (UNCTAD 2007). Expropriation can take a direct and a indirect form (Dolzer & Schreuer 2012:101). Direct expropriation refers to expropriation whereby the formal title of the owner of property has been changed. This is not the case with indirect expropriation. Indirect expropriation happens when a host state forces an investor to give up his property because of measures taken by the government to reduce the benefits of the investment without affecting the investor’s title of the property (Dolzer & Schreuer 2012:101). Examples of such measures are tax increases, alteration of property rights and interventions in the management of the investment by the government (Henckels 2012).
- Fair and equitable treatment (FET): This standard is the most referred protection standard in investment disputes (Dolzer & Schreuer 2012:130). There is actually not a really clear definition of this concept in investment law. This makes this standard a very complex one and hard to apply. The description of the standard does not describe well how exactly the investor should be protected. Also, many treaties do not offer any guidance in the understanding and interpretation of this standard (Dolzer & Schreuer 2012:130). Moreover, the interpretation depends heavily on the details of a particular case. Because of the vagueness of this standard, it has been used many times by investors in investment disputes.
- Full protection and security (FPS): This standard has been brought up to protect investments against physical damage caused by disturbances like riots and military actions. The state is according to this standard obliged to provide full protection against these threats. FPS and
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FET are very much alike and some tribunals argue they are actually the same. In some recent cases protection for the violation of investor’s rights related to legal protection has been framed within this standard. Just like FET, FPS is very vague and hard to interpret (Dolzer & Schreuer 2012:160,161).
- No arbitrary or discriminatory measures: This standard prohibits governments to treat investors in an arbitrary or discriminatory way (Dolzer & Schreuer 2012:193). The standard also lacks a clear definition but some IIAs describe measures that are fall under this category. Actions of governments that does damage to an investor without a clear legitimate purpose is considered arbitrary. Also, measures that reflect personal preferences of governments and measures based on discretion and preconceptions will be considered as arbitrary (Dolzer & Schreuer 2012:193). Measures are discriminatory if the intention of governments is to discriminate or when measures have a discriminatory effect. You can speak of discriminatory effects when governments treat investors differently in parallel or similar situations and they cannot give a good reason for doing so (Dolzer & Schreuer 2012:193).
- National treatment: Another standard is the national treatment standard (NT). This standard is meant to assure that foreign investors are treated in the same way as nationals of the host state (Dolzer & Schreuer 2012:198). This standard is quite a sensitive one, because it confronts different essential interests and functions of the state. Many countries decided to exclude some areas and sectors from this standard in IIAs such as taxation, public health services and national security (UNCTAD 2007).
- Most favored nation (MFN): This standard is very much the same as the previous described standard. MFN does not offer a protection itself but it is meant to prevent governments in treating particular foreign investors more favorably than investors from other countries (Blackaby et al. 2015:482). In order to call upon this right to the arbitration investors have to show that the different investors are treated differently in a similar situation.
- Umbrella clause: An umbrella clause is a form of protection that obliges host states to stick to certain agreed provisions and promises to the investors in an IIA (Dolzer & Schreuer 2012:167). Normally, an International treaty has no jurisdiction over disputes whereby states breach certain agreements but an umbrella clause allows the investor to seek remedies allowed under the IIA (Dolzer & Schreuer 2012:167). An umbrella clause therefore ensures that states will stick to its promises. These umbrella clauses are quite dubious sometimes. Different tribunals have a different approach to these umbrella clauses which leads to uncertainty about the meaning of this standard (Dolzer & Schreuer 2012:167). Some international treaties interpret breaches in contractual obligations more broadly and therefore elevate these breaches with an umbrella to a breach of an IIA. Other International Treaties follow a more narrow approach and argue that a too broad interpretation of this standard would be too burdensome for the host state.
- Transfer of funds: The last form of protection is concerned with the free transfer of fund in and out of the host state. In many IIAs, this provision is guaranteed and would give investors the ability to transfer capital in and out of the host state (Dolzer & Schreuer 2012:212). This is necessary standard for investors in order to be able to invest. The standard protects investors
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from interferences of host states in currency controls that would hamper investors to return their capital and profits to their home country (Dolzer & Schreuer 2012:212).
In the next two cases you can see how investors can put pressure on environmental legislation in different ways. Different mentioned standards of protection come forward in these cases. 2.3.3 Tecmed vs Mexico
In Mexico, a Spanish company named Tecmed had permission of the Mexican government to hold a land-fill site until the Mexican government decided to refuse a renewing of this permit because, according to Mexico, the landfill violated different environmental regulations (Gerstetter & Meyer-Ohlendorf 2013). Tecmed, the claimant, argued that Mexico made use of expropriation without giving any compensation for its investment. Finally, Tecmed won this case because, according to the tribunal, Mexico violated the trade agreement between Mexico and Spain. The following statement was given:
The foreign investor expects the host State to act in a consistent manner, free from ambiguity and totally transparently in its relations with the foreign investor, so that it may know beforehand any and all rules and regulations that will govern its investments, as well as the goals of the relevant policies and administrative practices or directives, to be able to plan its investment and comply with such regulations (Gerstetter & Meyer-Ohlendorf 2013:11).
This statement relates also to the FET standard and can be seen as a very investor-friendly explanation of this standard. In fact, this explanation of the FET would make it almost impossible for governments to implement new regulation, because it might be seen as violation of the FET standard (Gerstetter & Meyer-Ohlendorf 2013).
2.3.4 Methanex vs USA
The company Methanex is on the largest producers of methanol in the US. Methanol is used for the production of gasoline (Gerstetter & Meyer-Ohlendorf 2013). The state California forbid the use of methanol after studies found out that methanol has a very damaging effect on water. According to Methanex this action could be seen as a form of indirect expropriation and a violation of the FET standard (Gerstetter & Meyer-Ohlendorf 2013). The tribunal did not agree with the claims of Methanex:
But as a matter of general international law, a non-discriminatory regulation for a public purpose, which is enacted in accordance with due process and, which affects, inter alios, a foreign investor or investment is not deemed expropriatory and compensable unless specific commitments had been given by the regulating government to the then putative foreign investor contemplating investment that the government would refrain from such regulation
(Gerstetter & Meyer-Ohlendorf 2013:13).
This example shows that, according to the tribunal, the public purpose of the Californian state justified the banning of methanol. This case also shows that because the rule for the need for compensation in the case of indirect expropriation is poorly defined. It depends heavily whether the tribunal focuses on the specific doctrine about expropriation and the effects of the
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measure on investments or on the purpose and context of the action taken by the government (Gerstetter & Meyer-Ohlendorf 2013).
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3. Methodology
3.1 Introduction
This section will elaborate how this research took form what research methods have been used to answer the main- and sub questions. The goal of my research is to provide an overview of the possible implications of ISDS on environmental legislation of the municipality of Amsterdam according to different actors but to also elaborate the interests of the different actors regarding the TTIP and investment arbitration. The research is a qualitative research and therefore qualitative research methods have been used for answering the questions. In this section the research questions will be formulated. Furthermore, there will be argued what decisions have been made regarding sampling, the different research methods that have been used will be described and arguments for using these methods will be given. Finally, there will be given a reflection on the used methods.
3.2 Research questions
The following main question has been formulated:
How would the inclusion of the proposed Investor-to-state Dispute Settlement in the Transatlantic Trade and Investment Partnership impede the environmental legislation of the municipality of Amsterdam according to different actors?
In order to find the answer to the main question and in addition to the main question the following sub questions have been formulated?
1. What are the features of the Transatlantic Trade and Investment Partnership (TTIP)? 2. What are the features and implications of the Investor-to-state Dispute Settlement
(ISDS) and the Investment Court System (ICS)?
3. What are the possible gains of the Transatlantic Trade and Investment Partnership? 4. What exactly would the municipality of Amsterdam hope to accomplish with the
motion proposed against the Transatlantic Trade and Investment Partnership last year? 5. Are there any comparable cases where ISDS, as part of a trade agreement, has been
used by investors to sue governments for their environmental legislation? 3.3 Data collection
The research will be a combination of two research methods: content analysis and semi-structured interviews. The content of policy documents, opinion pieces, press releases and independent reports will analyzed and the relevant information for this subject will be filtered and used for answering the research questions. The sources for the content analyses and the sampling of the semi-structured interviews will be described in detail below.
Semi-structured interviews
In this research I made use of stratified purposive sampling to choose the interviewees. I have chosen to interview people from the following groups or institutions: the municipality of
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Amsterdam, interest groups and the European Commission. The goal of these interviews was to get insight in the interests, positions and opinions of different actors regarding the TTIP, ISDS and the possible impact on environmental regulation of the municipality of Amsterdam according to these actors. Beforehand, I believed that the information provided by these actors would give the answers to my research questions. I have chosen to interview a couple of counselors of the municipality of Amsterdam because they are, obviously, narrowly involved in the policies of the municipality. The councilors of the municipality of Amsterdam that were interviewed were Jasper Groen (GroenLinks), Hans Glaubitz (D66) and Dennis Boutkan (PvdA). The interviews with these counselors will show what concerns the municipality counsel has concerning the TTIP and ISDS/ICS and why they decided to support or oppose the motion against the TTIP. Beforehand, I decided to interview two councilors who were in favor of the motion against TTIP and two councilors who disapproved this motion to give a good view on the reason behind this motion, opted by GroenLinks, and the discussion that was going on. At the end, I was unfortunately not able to interview two opponents of the motion, but just one, Hans Glaubitz (D66). Jasper Groen (GroenLinks) and Dennis Boutkan (PvdA) were in favor of the motion. Furthermore, I interviewed Cecilia Thorfinn, who is Head of Press of the European Commission Representation in the Netherlands. I chose her because she is actually the spokesman of the European Commission in the Netherland and is narrowly involved in the negotiations of the TTIP and is especially involved in the discussion between different interest groups in the Netherlands. She knows much about the developments in the TTIP negotiations and has also been in contact with European Commissioner of Trade Cecilia Malström many times. The last interview I held was with freelance researcher Roeline Knottnerus of Stichting Onderzoek Multinationale Ondernemingen (SOMO). SOMO is an organization which is much occupied with the TTIP the last few years and has a critical position against the TTIP and especially on ISDS and ICS. SOMO is an organization that investigates multinationals and the effects of their activities on humans and the environment (SOMO 2016). I also wanted to interview a spokesman of the Verbond van Nederlandse Ondernemingen en het Nederlands Christelijk Wergeversverbnd (VNO-NCW) but I could not arrange an interview in time. The VNO-NCW is an origination that represents the interests of the Dutch entrepreneurs of all kind of businesses (VNO-NCW 2016). An interview with someone of this organization would shed light on the possible advantages of the TTIP for small, medium and large enterprises and would give insight in their point of view. However, I was able to retrieve much information from the website of VNO-NCW and have therefore included their interests and position in relation to the TTIP and ISDS/ICS in the empirical analysis.
Besides the point of view of these different actors on TTIP and ISDS, I also tried to involve the theories on multilevel governance and new constitutionalism into the conversation in order to see how these theories relate to TTIP and ISDS according to the interviewees by asking indirect questions and submit a thesis to them on the matter. I choose for semi- structured interviews, because it was important for my subject that the interviews would be open and that they provide room for insights and interpretations of the respondents. But of course, the goal was to also look for particular information and I therefore had to hold on to a certain structure in the form of particular subjects and questions. The interviews were very
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useful for my research because they not only provided insights itself, but the interviewees also recommended many relevant links, documents and scientific articles on the subject, which were very useful. All the interviews have been recorded and have been worked out on paper in the appendix.
Content Analysis
In the content analysis I made use of a variety of sources. First of all, different independent reports I have been analyzed and form an important part of my research. Reports that describe the possible economic impacts and effects of TTIP have been used to investigate the possible advantages and disadvantages of TTIP, for example studies of consultancies, such as Ecorys and the Sociaal Economische Raad (SER). These reports are probably the most reliable source for investigating the possible impact of ISDS on the environmental regulation of Amsterdam in the future and they have also been used by the different actors in this thesis to support their point of view. However, these reports remain mainly predictions on the effects of TTIP. The actual effects of the TTIP and ICS/ICS and their impact on environmental regulation heavily depend on the outcomes of the negotiations and will only be visible once TTIP has been realized. Secondly, different websites have been used to provide information about the actors described in this thesis. Information about the position of the different political parties, interest groups and the European Commission has been obtained from the websites of these parties, interest groups and from the website of the European Commission. Information about the process of TTIP is also mainly provided by the website of the European Commission. Thirdly, the findings of scientist Gus van Harten have also been used to elaborate and analyze the impact of ISDS and ICS on environmental regulation. These findings are important because he had been able to look into the drafts of the ICS and ISDS and possesses the required skills and knowledge to read the juridical language.
3.3 Reflection
There are several implications to mention about my research and my research methods. First of all, it is important to stress out that the findings on specific juridical documents are mainly based on the findings and assumptions of other people that do have the necessary skills and knowledge. I lack the skills and knowledge to fully comprehend the juridical language of some of publications of the European Commission, for example concerning the detailed proposal of the European Commission on ICS. I am therefore not able to analyze these documents myself. Secondly, the role of the Dutch national government with regard to the TTIP is maybe a bit neglected in this research. Lastly, the number of interviews is of the different actor is limited. I rather would have taken more interviews with more individuals of the mentioned actor groups to get a greater overview of the different interests, opinions and findings of different actors. However, there should be noted that the information retrieved from the interviews is one of the sources of my research and that this information is supported by other source mentioned above.
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4. Empirical analysis
4.1 The Transatlantic Trade and Investment Partnership
4.1.1 IntroductionThis paragraph is about the process that the Transatlantic Trade and Investment Partnership (TTIP) has undergone in the past years until the day of the day. This paragraph focuses mainly on the process around the ISDS provision in the TTIP negotiations. A good understanding of the process of TTIP and ISDS is needed in order to comprehend the interests and positions of different actors in the case of Amsterdam.
4.1.2 The process
The idea of a more integrated market between the EU and the U.S. was manifested in the New Transatlantic Agenda, created in 1995 (Eliasson 2014). In 2004 and 2005, the European Parliament and the U.S. senate both supported resolutions for establishing a transatlantic market for the year 2015 (Eliasson 2014). The current economic relationship between the European Union and the United States has got many trade barriers, for example technical and regulatory barriers, and there are much opportunities for boosting both economies (Weaver 2014). Other motivations are the worries about declining economic growth and job creation and the increasing global competition. Before the negotiations really started, there were first several researches, impact studies and consultations (Thorfinn 2016). On these consultations different actors, such as companies and NGO’s, were invited to talk about the directives and goals of the future TTIP. There were two of such consultations held before the negotiations started, one to discuss the idea of a trade agreement and one about the proposal of the TTIP (Thorfinn 2016). These consultations were held before the member states were asked for their opinion. Once realized, the TTIP will be the biggest free trade agreement ever (Weaver 2014). The agreement would contain 50% of the global economic output, 30% of global trade and 20% of the global foreign direct investments (FDI) (Weaver 2014). The European Commission has formulated three main goals with the TTIP. One goal is to improve the export, import and FDI conditions in the common market of the U.S. and the EU. Removing taxes on goods is an example of a way to accomplish this goal (European Commission 2015a). Another goal is to level the differences in regulation (European Commission 2015b). The EU and the U.S. have many different standards, such as technical details and procedures that impede the free movement of goods between the two trading blocs. A third goal of the European Commission is to implement new rules that would improve companies access to the materials, such as energy and raw materials, they need and to improve property and investment protection (European Commission 2015c).
The Obama Administration enlightened the congress on March 20, 2013, that the U.S. is to negotiate a trade agreement with the EU (Webb 2015). The European Commission brought up a draft mandate for the TTIP negotiations to be approved by the member states. The Council of Ministers approved the proposal of the commission on June 14, 2014 (Webb 2015). The negotiation directives, established by the Council of Ministers, were issued on June 17, 2013
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(Devuyst 2013). At the time these directives were classified but were yet released by the European Commission on October 9, 2014 in order to become more transparent (European Commission 2014). The directives of both the EU and the U.S. represent the starting positions of both trade blocs concerning investor treatment, investment protection, ISDS and trade policies (Weaver 2014). The EU strives for the highest level of liberalization and the best protection possible for investors from the EU and the U.S (Council of Europe 2013). But, the directives also say that the state must not be hampered too much in pursuing public policy goals. The different types of investment protection, discussed earlier, were also included in the negotiation directives as well as an ISDS provision which should transparent, with independent arbitrators and it should be predictable (Council of Europe 2013).
The first round of the TTIP negotiations started in Washington D.C. on July 8, 2013. 12 negotiation rounds followed after this first round. The last one, from 25 to 29 April, 2016 (European Commission 2016). These rounds are organized half of the times in the EU and the other half of time in the U.S. (Thorfinn 2016). There is not a fixed time-interval between the rounds but the time between the rounds is mostly approximately three to four months. In these rounds a large group of experts of different expertise are gathered to prepare a text based on the directives formulated in the mandate (Thorfinn 2016). The U.S. also has a comparable group of experts and together these two teams discuss the different options in separate groups, divided per subject. In these texts, different options are opted and proposed to the member states. Between the rounds, a meeting between European Commissioner Cecilia Malström and Michael Froman also takes place (Thorfinn 2016). The rounds are meant to take important steps to work out the negotiation drafts but the process of the TTIP is actually a continuous process.
In March 2014, the public was invited to answer a list of questions and to share opinions about ISDS (European Commission 2014). This initiative got a lot of attention. There were more than 100.000 replies to this invitation, mostly from non-governmental organizations (NGO’s). A report about the public consultation was released in January 2015 (European Commission 2015d). On September 2015, a new draft of the current position of the EU on investment protection was published. The draft is not a formal proposal to the U.S. and conformed for a great part the negotiation directives but is a lot more specific in several details. One great development was the introduction of a new version of ISDS, described in the draft the Investment Court System (ICS). Details about this new system will be elaborated later.
In the TTIP negotiations there are particular policies that fall under EU competency but there are also policy areas that fall both under EU competency and national governments (Thorfinn 2016). These competencies are called mixed competences. When the EU commission and U.S. reach an agreement, they deliver the texts to the European Council and the European parliament for approval (Thorfinn 2016). The parts of the agreement that features mixed competences also have to be approved by all the member states.
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4.1.3 The potential of TTIP
As been said earlier, once realized, the TTIP will be the biggest free trade agreement ever achieved. But what does TTIP really have to offer? What are the possible advantages for the EU and the Netherlands? First of all, many studies assume that the TTIP would boost the economic growth in Europe. The extent of the economic growth however, depends heavily on the outcomes of the negotiations (Ecorys 2012). The more integrated the markets of the EU and the U.S. become after the agreement the more the growth of the Gross domestic product (GDP) will be. An ambitious comprehensive agreement whereby the U.S. and the EU come to agree on many fields and whereby many standards will be reconciled, GDP will grow with approximately 68,2 to 119,2 billion dollars according to a study of Ecorys (2012). In a more limited agreement however, the economic gains are much less. An agreement with only a liberalization of tariffs would lead to a growth of only 23,7 billion dollars. For the Netherlands, an ambitious agreement would lead to a growth of 1,4 to 4 billion dollars, according to Ecorys (Ecorys 2012). The Bertelsmann Stiftung also states that Europe and the U.S. are not the only states that would gain from the TTIP. They predict that the economic growth in the EU and the U.S. after implementing the TTIP will work on to other countries which will therefore also gain from the TTIP indirectly (Felbermayr et al. 2013).
Another advantage of TTIP would be a growth of jobs, according to the European Commission. The reasoning is that more open markets will increase the export possibilities and therefore increase profits of companies who are able to for hire new personnel. (Malström 2015a). The European Commission estimated that TTIP could provide 2,2 million new jobs worldwide (European Commission 2013). According to the Bertelsmann Stiftung, TTIP would eventually lead to a growth of 29.535 jobs in the Netherlands (Felbermayr et al. 2013). A third advantage is that TTIP could set the standard for the rest of the world. With this huge agreement the European Commission argues that it could safeguard and promote the ‘European norms’ on areas such as democracy, human rights and the environment in the world (Malström 2015b). Vice president of the European Commission Frans Timmermans also stated that TTIP will change the rules of the game worldwide (Timmermans 2014). According to him, TTIP is not a free trade agreement but more of a political treaty and is especially for geopolitical reasons very important. With TTIP, the U.S. and the European Union would strengthen their position in the world pertaining to emerging economies such as Brazil, China and India (Timmermans 2014).
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4.2 Investment protection in TTIP
4.2.1 IntroductionThis paragraph is about the ISDS and ICS, the new arbitrary court system as proposed by the European Commission. In the previous chapter, the ISDS system and levels of protection have already been described. Also, different cases were described whereby environmental and public interests of governments collide with the interests of companies and where ISDS took place. This paragraph compares ISDS with the new proposed Investor Court System (ICS) and elaborates the criticism of ISDS and how these critics are handled in the new ICS system. The focus lies on the critics of ISDS and the improvements made in ICS.
4.2.2 ISDS criticism
The criticism on ISDS can be distinguished in two categories: criticism on ISDS in general and criticism on specific aspects of ISDS (Hóber 2013). Not only in the European Union but also in the United States ISDS is a very controversial subject. On April 30th, 2015, a group of well-known American scholars in the field of law wrote a letter to the Congressional Leaders in the hope to convince them to oppose ISDS in the TTIP (Alliance for Justice 2015). The most heard argument against ISDS is the fear that the right to go to arbitration would threat the authority of domestic public bodies and their regulatory policies. Critics argue that when ISDS will be implemented, national and local governments wouldn’t be able to achieve public goals because they would not be entirely free to regulate. In trade agreements there are normally clear rules that should ensure that governments can regulate freely. However, several levels of protection, most notably protection against indirect expropriation, the FET standard and the NT standard are many times criticized for their implications on the states ‘right to regulate’ (Tietje & Baetens 2014). According to critics, these levels op protections would not only threaten regulation directly, but would also cause a ‘regulatory chill effect.’ This effect occurs when governments fear expensive claims of companies using ISDS to oppose to certain regulations. This could discourage national and local governments to think of implementing new regulations on areas such as the environment, labour rights and public health care (Tietje & Baetens 2014).
The European Commission intended to preserve the ‘right to regulate’ in the TTIP-draft. In reaction to the public consultation of 2014 about ISDS, the European Commission ought to deal with the worries by formulating that provisions in the section about ISDS:
“…shall not affect the right of the Parties to regulate within their territories through
measures necessary to achieve legitimate policy objectives, such as the protection of public health, safety, environment or public morals, social or consumer protection or promotion and protection of cultural diversity. (European Commission 2015e)”
The Commission also defined the levels of protection of investments more clearly. Critics argued that especially the indirect expropriation is too vague and that therefore the final judgement of investment arbitrators would be too unpredictable and too much result in a judgement in favor of investors. In the TTIP draft there is made a clear distinction between
