Apparently, Canada has agreed to amend the CETA investment provisions, to include the EU's new investment court. Here is the EU summary of the changes:
The most important elements of the revised CETA investment chapter are the following:
The revised CETA text includes a new article which ensures that the right to regulate for public policies is fully preserved. The article also ensures that investment protection provisions shall not be interpreted as a commitment from governments that legal frameworks will remain unchanged. This clarifies that a measure that may negatively affect an investment or affect an investor’s expectations of profits is not inconsistent with the agreement for that reason alone.
A further provision clarifies that CETA will not prevent the EU from enforcing its laws on state aid.
Establishment of the tribunal
CETA establishes a permanent Tribunal of fifteen Members which will be competent to hear claims for violation of the investment protection standards established in the agreement. The Members of the Tribunal competent to hear investment disputes will be appointed by the EU and Canada and will be highly qualified and beyond reproach in terms of ethics. Divisions of the Tribunal consisting of three Members will hear each particular case. The CETA text now follows the EU's new approach as set out in the recently concluded EU-Vietnam FTA and the EU’s TTIP proposal.
While the original CETA text foresaw the possibility to establish an appeal mechanism in the future, the updated CETA text establishes at the entry into force of the Agreement an Appellate Tribunal. It also addresses the relationship between the decisions of the Appellate Tribunal and the Tribunal. The EU and Canada will promptly adopt a decision of the CETA Joint Committee which will include further technical elements necessary to make the Appellate Tribunal operational.
The multilateral investment Court
The EU and Canada both share the objective of establishing a permanent multilateral investment court. The text of CETA recognises that such a multilateral mechanism will come to replace the bilateral mechanism established in CETA.
CETA and domestic law
The revised CETA text confirms that the Tribunal shall only apply the agreement, in accordance with the principles of international law, when adjudicating upon claims submitted by investors. It cannot decide on matters of EU or Member State law. It can only look at EU or Member State law as a matter of fact, for example to make sure that the property rights in question are in fact held by the investor. It will therefore not interpret EU or Member States law in a manner binding on EU courts or EU governments. It also puts in black and white that determining whether a measure of a Party is legal under domestic law remains the monopoly of the Party's competent authorities.
The original CETA text and the need for improvement
The original CETA text, published in August 2014 was already the most progressive system for the protection of investment and the settlement of investment disputes. The text included clearly defined standards of protection, full transparency of proceedings, a ban on forum shopping, governmental control of interpretation of the agreement, a strict code of conduct, early dismissal of unfounded claims and the loser pays principle to avoid vexatious claims.
The EU approach towards investment dispute settlement has further evolved since then and the CETA text now includes all its new main features.
Substantively, these changes don't address any of the criticisms I've made of ISDS, so I don't have a strong opinion of them, except that the law is less clear than it was before. But politically, it's kind of fascinating to watch this all play out, in both domestic politics and international relations. Has the EU done enough to save ISDS within the EU political system? What will the impact of these changes be on the TTIP negotiations? And what did the EU offer Canada to get them to go along with this?
And what if creating a more credible, widely known institution for foreign investors to use to sue governments leads to more complaints being filed?