The current system for investor-state dispute settlement needs to be thoroughly reformed, the European Economic and Social Committee (EESC) said on Monday 7 November. In an own-initiative opinion adopted in October, the EESC reports on work to reform the system.
Investor-State Dispute Settlement allows companies to challenge a state in an international court for defying an investment protection measure, for example.
The EESC considers that questions have often been asked about the independence of arbitrators or the lack of transparency in disputes. He also criticises the fact that the court is able to question democratic decisions concerning the protection of health, the environment or social rights.
European investment policy should serve the EU’s economic interests and its priorities in terms of environmental protection and human rights, according to the EESC. Moreover, the current system discriminates against SMEs, which have fewer financial resources to take on the states.
To remedy this, the EESC calls for the establishment of an international investment protection system including a dispute settlement mechanism. The European Commission also advocates the establishment of a multilateral investment court.
See the EESC own-initiative opinion: https://aeur.eu/f/3xp (Original version in French by Léa Marchal)