Thursday, 3 April 2014

CSOs sound alarm over EU investment treaty

A “ONE-WAY street” is how 78 Myanmar civil society organisations have condemned the ongoing negotiations for an EU investor protection treaty that would provide scope for investor-state international arbitration.

The group of CSOs published the open letter to the European Union trade minister on March 21, alleging that the investor-state dispute settlement system being negotiated will favour the interests of investors over the interests of the nation.

“[Investor-state-disputes are] a one way system. It only gives foreign investors the options to sue at these private courts. Communities or governments cannot sue investors when their environment or human rights are violated at the same private courts,” the letter read.

“Such a treaty might highly limit future policy making in the public interest. It could also lead to the Myanmar government shying away from the planned policy if this might result in a claim by an investor.”

The Myanmar Times has previously reported on the ongoing investor protection treaty negotiations between the Myanmar government and the EU, which has recently normalised trade relations and granted the country preferential status on the EU bloc’s Generalised System of Preferences – a move paving the way for increasing EU trade and investment.

However, the preferred investor-state dispute settlement process of international arbitration commonly carries a multi-million-dollar price tag.

“The awards and the legal fees have to be covered by public budgets and often constitute a substantial part of the annual health or education budget of a developing country. The biggest claim so far is from Chevron against Ecuador and is over 3 billion USD,” the groups said in their letter.

The 78 CSOs fear international arbitration – an opaque, extra-judicial dispute resolution process – will jeopardise the rights of communities negatively impacted by investment to lobby government for positive policy change.

Ma Khon Ja, a coordinator with the Kachin Women’s Peace network, one of the 78 signatories, said such concerns were especially pressing in Kachin State, where large-scale industrial projects have fuelled conflict.

Speaking to The Myanmar Times, Ma Khon Ja said reforming business and land tenure laws will be a key aspect of the peace process in Kachin, and that the EU investor protection treaty could halt that very important policy development work.

Myanmar is already a signatory to several regional pacts providing for investor-state dispute settlements. Investor-state disputes usually arise in the context of a government changing a policy that impacts the business of the investor in the country. Disputes are settled in international arbitration arenas where an arbitrator or arbitrator panel helps the parties debate their dispute and hands down an award that usually centres on monetary compensation.

source: The Myanmar Times
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