Investor-State dispute resolution mechanisms are increasingly included as a chapter in numerous International Investment Agreements (IIAs) and Free Trade Agreements (FTAs) and, in particular, Investor-State dispute settlement (ISDS) provisions grant special legal privileges to foreign corporations that have the legal right to sue governments outside of domestic courts in arbitration tribunals, bypassing the national judicial system and circumventing domestic laws and regulations as well as weakening State sovereignty.
Governmental measures that have been challenged most frequently by ISDS provisions include but are not limited to: environmental and public health measures and human rights protection in particular workers' rights protection and guarantees.
This system drastically alters the balance of power between multinational companies and States, significantly favoring investors’ rights and restraining States’ powers dealing with foreign corporations working within those States.
Human rights obligations under the Charter of the United Nations shall prevail over obligations under any other international agreement. Consequently, States should guarantee that all IIAs and FTAs recognise the absolute prevalence of the UN human rights regime and ensure that, if any dispute arises, human rights obligations should prevail.
The European Union is negotiating the TTIP (Transatlantic Trade and Investment Partnership) with the USA and the European Commission’s most recent ISDS model, the re-labelled Investment Court System (ICS), still undermines the International legal order and genuine democracy as well as the previously envisioned model.
Furthermore States already have in place their own dispute resolution laws, rendering unnecessary the separate ISDS regime.
The Parliamentary Assembly should re-affirm that all States are bound by the Charter of the United Nations and, accordingly, all treaties must be compliant with it, especially with respect to its human rights regime.
The Assembly should also evaluate the possibility of encouraging the member States to ban ISDS and ICS provisions in future treaties into which they enter.