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Article

16 Mar 2021

Author:
Bart-Jaap Verbeek, Centre for Research on Multinational Corporations (SOMO)

Publication finds investment treaties give corporations greater rights than Dutch or EU law

"'Super-protections' for corporations", 16 March 2021

Foreign investors enjoy more rights under investment treaties than under Dutch or EU law. A new study, commissioned by SOMO and conducted by the Amsterdam European Law Clinic, focuses on four important elements of investment protection and compares the rights of companies under the Energy Charter Treaty (ECT), CETA, Dutch civil and administrative law and the EU non-contractual liability regime. The most important conclusion is that companies under investment treaties and ISDS have a better chance of receiving (higher) compensation.

  • First, in both the ECT and CETA, arbitrators have financial incentives to decide in favour of foreign investors, while in the case of the ECT a lack of transparency prevents these cases to be followed publicly;
  • Second, foreign investors do not have to challenge a new or renewed law at national level first. They can directly claim financial compensation for ‘having to endure’ measures or laws and start a procedure under the relevant investment treaty;
  • Third, the substantive investment protection standards constrain the regulatory space of governments in a way that Dutch and EU law do not.
  • Fourth, foreign investors can obtain higher compensation.

It is therefore not surprising that foreign investors are increasingly resorting to ISDS, even in countries with a strong rule of law...

Part of the following timelines

The Energy Charter Treaty

Investor-State Dispute Settlement

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