France concerned of ISDS, Malaysia negotiating the same in TPPA

Even a powerful European country like France is mindful about the perils of the investor-state dispute settlement (ISDS) system. French Trade Minister has warned the European Union against the ISDS mechanism proposed in the EU-US trade agreement as it would allow foreign companies to challenge governments directly.

 An article titled “Paris raises legal fears over US trade talks” in the Financial Times of 11 September 2013 quoted the French Minister, warning that the ISDS will serve US corporate interests at the expense of European countries’ ability to formulate policies, which could be used by the companies to sue the governments.

This concern should serve as a good warning for Malaysia because the centre piece of the Trans-Pacific Partnership Agreement (TPPA) that Malaysia is negotiating is the same ISDS system.

The Malaysian government should not take the ISDS lightly.  A report titled “Profiting from Injustice” published in November 2012 notes that the number of investment arbitration cases has increased in the past two decades from 38 cases in 1996 to 450 in 2011 according to data registered at the International Centre for Settlement of Investment Disputes (ICSID).

The amount of money involved has also increased dramatically whereby in 2009-2010, 151 investment arbitration cases involved corporations demanding at least $100 million from states.   Fearing this ISDS mechanism which would pose a serious threat to the sovereignty of a country, many countries have terminated investment treaties or withdrawn from further negotiations.

CAP calls on the Malaysian government to withdraw from the TPPA negotiations as our fears cannot be allayed. Besides the ISDS there are many other Red Lines and concerns which have been forwarded to the relevant Ministries.

Public and national interest should take precedence, not corporate and commercial interest. Thus we reiterate our call to the Malaysian government to withdraw from the TPPA.

Letter to the Editor, 17 September 2013