The German government wants to ratify the EU-Canada Agreement (CETA) as soon as possible. It intends to limit the particularly controversial investment protection by means of a declaration of interpretation. However, a legal opinion on behalf of PowerShift shows: The interpretation does not deliver what it promises: Investors will still be able to complain about climate and environmental protection.
Berlin, 6 October 2022: A legal report prepared by legal scholars Alessandra Arcuri and Federica Violi from the University of Rotterdam on behalf of PowerShift shows: The CETA Declaration of Interpretation will not prevent lawsuits against climate and environmental protection measures.
On the one hand, the declaration does not go far enough, as it is limited to climate protection measures and does not mention policy measures on other problem areas such as water protection or pesticides.
On the other hand, it contains a lot of spongy formulations. For example, climate action can continue to be interpreted as ‘indirect expropriation’ if its effects appear ‘disproportionate’ and ‘unreasonable’ to the arbitrators.
"The CETA investment chapter is a threat to the energy transition and the declaration of interpretation is not a solution", says Alessandra Arcuri from the University of Rotterdam.
"Despite good intentions, it is highly unlikely that the interpretation will deter investors from challenging climate and environmental policies of governments," says Federica Violi of the University of Rotterdam.
The only way to completely eliminate the risk of climate-related lawsuits is to remove investor-state arbitration from the agreement. This could be achieved through a treaty amendment, an implementation agreement or an application protocol – without creating new obligations or affecting the other parts of the agreement. Canada could be open to such a proposal as it is already pursuing more advanced investment protection standards than the EU.
‘The report shows that our criticism of special rights for corporations is justified. This system cannot be reformed and must be ended. CETA must not be fully ratified in this form!" says Anne Bundschuh, Trade Officer at PowerShift.
background
Despite massive protests on both sides of the Atlantic, the EU-Canada Trade and Investment Protection Agreement (CETA) provisionally entered into force in 2017. However, the particularly controversial investment protection, with which investors can sue states for climate or environmental protection measures before an international arbitration court, is not yet in force. This investment protection will only take effect once CETA has been ratified by all EU countries.
In its trade policy agenda, the Federal Government agreed at the end of June to ratify the agreement as soon as possible, on one condition: A declaration of interpretation is intended to ensure in advance that investment protection is limited and that its ‘abuse’ is prevented. Complaints against climate protection should no longer be possible.
Press contacts
Anne Bundschuh (Trade Policy Officer)
Email: anne.bundschuh@power-shift.de
Telephone: 0157 87948417
Vanessa Fischer (Press Officer)
Email: vanessa.fischer@power-shift.de
Telephone: 0157 54768413
