[CTC] NGOs Push For Broad Environmental Carveout From TTIP Obligations

[Arthur Stamoulis]

Full report at: http://www.transportenvironment.org/publications/sustainable-development-and-%EF%BF%BCenvironment-ttip <http://www.transportenvironment.org/publications/sustainable-development-and-%EF%BF%BCenvironment-ttip>
NGOs Push For Broad Environmental Carveout From TTIP Obligations

Inside US Trade

Posted: October 29, 2015

U.S. and European environmental activists are calling for language in the Transatlantic Trade and Investment Partnership (TTIP) that would ensure none of the agreement's commercial obligations hinder the ability of governments to take measures to protect the environment, which they say is a far cry from what is envisioned in a leaked European Commission proposal for a "sustainable development" chapter.

Two EU environmental groups, ClientEarth and Transport & Environment, propose a so-called "clean hands clause" in a joint report on TTIP slated to be released on Oct. 30. This would be a broad provision to ensure that the trade deal does not prevent parties from rolling out measures that serve environmental ends, even if they impose restrictions on trade or consumption, according to the report.

For example, the groups argue that such a provision would better shelter EU environmental legislation like the inclusion of aviation in the Emissions Trading Scheme or the biofuels provisions in the EU Renewable Energy Directive. The United States has objected to both, saying the latter discriminates against soy-based biodiesel, impacting a key market for U.S. soybean exporters (Inside U.S. Trade, March 1, 2013).

Similarly, the Sierra Club, Friends of the Earth Europe and Power Shift in an Oct. 23 analysis of the leaked sustainable development chapter call for a broad "carveout" from state-to-state or investor-state challenges for any measure related to environmental protection. The groups argue that the government propagating the measure should get the leeway to determine whether it meets this definition.

They describe this carveout as preventing trade disputes from being brought against a government for a measure related to environmental protection.

In that sense, it is different from the traditional exceptions contained in previous trade agreements such as the General Agreement on Tariffs and Trade. Under those exceptions, a government can still be challenged in a trade case and it is up to the panel or arbitrators determine whether measure at issue qualifies for the exception.

The Sierra Club, Friends of the Earth Europe and Power Shift say the language in the commission's leaked text amounts to neither an exception nor a carve-out. Instead, the text says the parties "recognize the right of each Party to determine its sustainable development policies and priorities, to set and regulate its levels of domestic…environmental protection, and to adopt or modify relevant policies and laws accordingly … ."

"This provision would not offer an adequate defense for TTIP-enabled challenges to environmental policies," the three groups say in their analysis. They argue that the operative language -- "recognize" -- is weak, and that an investor-state dispute settlement (ISDS) panel examining a challenge against a given environmental measure would likely not see the language as having any binding effect.

ClientEarth and Transport & Environment, in their report, note that the U.S. FTA chapters on the environment typically only prohibit countries from failing to enforce their environmental laws in a manner affecting trade and investment. This falls short of shielding the full range of environmental measures that a government may take, the report says.

Both sets of groups also reiterated their chief objection to the approach the EU has followed in past sustainable development chapters, which is that that it fails to subject environmental obligations to state-to-state dispute settlement and possible commercial trade sanctions. The leaked text includes a placeholder on dispute resolution, holding open the possibility that the EU may be open to shifting its approach (see related story).

ClientEarth and Transport & Environment also argue that the TTIP should require the parties to fully implement at least 10 multilateral environmental agreements (MEAs), including some that the United States has not ratified, such as the Basel Convention on the Control of Transboundary Movements of Hazardous Wastes and Their 
Disposal.

Statements by Trans-Pacific Partnership countries since the deal was reached on Oct. 5 indicate that the environment chapter will contain obligations related to three of the seven MEAs set forth by congressional Democrats as a minimum standard for inclusion in the final deal, but that only one of these agreements will be fully enforceable under TPP's dispute settlement mechanism (see related story.)

In addition, the two EU environmental groups push for "access to justice" provisions that would allow individuals and civil society organizations that are negatively affected by breaches of the environmental provisions of FTAs to request that authorities initiate dispute settlement. In the event that the authority decides not to act, it would be required to explain its decision, and this decision would be subject to judicial review, the report proposes.

ClientEarth and Transport & Environment argue that this would give citizens and communities equal rights with those of investors, who are allowed to challenge government environmental measures they believe violate fair treatment obligations under ISDS.

The most recent U.S. free trade agreements allow a process under which individuals from signatory countries can make submissions to a binational secretariat claiming a party is violating their environmental obligations. If warranted, the secretariat can develop a factual record regarding the allegation. The factual record is considered by the parties but does not automatically trigger dispute settlement.


-------------- next part --------------
An HTML attachment was scrubbed...
URL: <http://lists.citizenstrade.org/pipermail/ctcfield-citizenstrade.org/attachments/20151030/5475cbdf/attachment.htm>