Bipartisan association representing U.S. state legislatures

 

“NCSL will not support any bilateral investment treaty or free trade agreement that provides for investor/state dispute resolution. NCSL firmly believes that when a state adopts a non-discriminatory law or regulation intended to serve a public purpose, it shall not constitute a violation of an investment agreement or treaty, even if the change in the legal environment thwarts the foreign investors’ previous expectations.”

Passed unanimous resolution against inclusion of ISDS in trade agreements with Canada and the United States, February 9, 2015

 

"The Senate … urges the Government to ensure the principle of democracy in any proposed investment protection agreement and systematically refuse to insert an investor-state dispute settlement mechanism."

 

Resolutions opposing ISDS were also passed in Dutch and Austrian parliaments in 2014.

Even within developed countries that supported ISDS in the past, massive citizen opposition has forced ISDS into the public debate. The word “controversial” is now firmly attached to ISDS whenever it is mentioned and many government officials are now joining the opposition or are on the defensive, scrambling to make so-called “reforms” to the system.

Growing Resistance

 

The tide is turning against ISDS. Outrageous corporate attacks on laws to combat climate change, ban toxic substances, phase out nuclear power and more have led many governments and government officials to say enough is enough! Across the political spectrum, experts are now criticizing ISDS, and more governments are pulling out of treaties that include these extreme corporate rights and writing new treaty models that exclude ISDS. ISDS supporters are on the defensive, desperately trying to regroup to salvage the system through various “reform” proposals.

Governments are rejecting the ISDS regime, and are still getting plenty of investment from foreign corporations.

                                                                                               

Brendan Vickers, Director of Research and Policy at South Africa's Department of Trade and Industry, discusses alternatives to the ISDS system

U.S. National Conference of State Legislatures (NCSL)
French Senate
U.S. Senators
Twelve U.S. Senators in letter to President Obama, September 2016 

“ISDS challenges, and even mere threats of ISDS challenges, have been used to secure extractive permits over community objections, to get executives out of criminal convictions, and to exonerate managers connected to a factory’s lead poisoning of children. Such a corporate handout does not belong in our trade agreements.”

 
Victory! People power derailed the Trans-Pacific Partnership (TPP), which would have massively expanded ISDS. Thanks to years of campaigning by people, the agreement could not garner a majority of support in the U.S. Congress. Watch U.S. Senator Elizabeth Warren explain the growing opposition to ISDS in the United States and around the world that led to the TPP’s demise.
  • South Africa determined that its international treaties with ISDS were not necessary to attract investment and potentially undermined its ability to enact policies to benefit historically-disadvantaged Black South Africans after apartheid. South Africa began the process of terminating its treaties that include ISDS.

  • Indonesia announced in early 2014 its plans to terminate 60 of its international treaties with ISDS.

  • Brazil is the largest recipient of foreign direct investment in Latin America, despite not having ratified a single pact with ISDS. The Brazilian Congress rejected several investment treaties because they determined that ISDS does not comply with their Constitution.

  • Ecuador began terminating ISDS-enforced treaties in 2008. After creating a "Citizen's Audit Commission," which evaluated and reviewed all its international investment pacts to determine if they were in the country's national interest, Ecuador followed the audit’s recommendations and moved to terminate its remaining investment treaties in 2017.

  • Indonesia, Brazil, Mercosur, and the South African Development Community have all written new model treaties that do not include ISDS.

European Commission
Cecilia Malmstrom, European Union’s Trade Commissioner, admitted in September 2015

“ISDS is the most toxic acronym in Europe.”