Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP)

The International Institute for Sustainable Development (IISD) evaluates the European Commission's proposed framework for investment protection and ISDS in the TTIP. While acknowledging improvements over previous drafts, the IISD identifies significant gaps between the Commission's stated policy goals and the actual legal language provided. Key concerns include the potential for expansive arbitral interpretations of 'investment' and 'fair and equitable treatment,' the failure of MFN clauses to prevent the 'importation of standards' from other treaties, and the continued reliance on party-appointed arbitrators despite the introduction of a roster system. The report argues that the proposed measures do not sufficiently protect the right to regulate or ensure the independence of the dispute settlement process.

• The proposed definition of 'investment' is an open-ended, asset-based approach that may allow for expansive interpretations by tribunals, potentially covering assets like offshore bank accounts or holiday homes even if they are not part of a functioning enterprise.
• There is a contradiction between the Commission's claim that protection applies only after an investment is made and the provided text, which includes investors who 'seek to make' or are 'making' an investment, thereby extending the scope to the pre-establishment phase.
• The proposed Most-Favoured-Nation (MFN) treatment language fails to prevent the 'importation of standards,' meaning investors could potentially invoke more favourable substantive guarantees from other bilateral treaties to circumvent the TTIP's specific wording.
• While the Fair and Equitable Treatment (FET) standard uses a closed list of breaches to increase predictability, the inclusion of 'legitimate expectations' based on 'specific representations' remains a source of legal uncertainty and subjectivity.
• The proposed 'carve-out' for non-discriminatory public welfare measures (such as health and environment) to prevent indirect expropriation claims is weakened by the phrase 'except in rare circumstances,' which leaves the definition of such circumstances to the discretion of the tribunal.
• The report argues that the 'right to regulate' is not sufficiently protected because the preamble uses broad, undefined terms like 'legitimate' and promotes voluntary corporate social responsibility standards rather than legally binding obligations for investors.
• The proposed roster system for arbitrators is viewed as a mere backup and does not resolve the core issues of party-appointment bias, as the first two arbitrators are still nominated unilaterally by the investor and the state.
• The mechanisms to dismiss 'frivolous' or 'unfounded' claims are expected to reduce the costs of arbitration but will not limit the scope of decisions made by tribunals on jurisdiction or merits.
• The proposed appellate mechanism is considered a positive step in principle, but the report notes that the lack of detail on its composition and function makes it impossible to determine if it will actually resolve existing ISDS problems.

APA

Bernasconi-Osterwalder, N. (2014). Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP). International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/iisd_reply_eu_isds_ttip.pdf

Chicago

Bernasconi-Osterwalder, Nathalie. Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP). International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/iisd_reply_eu_isds_ttip.pdf.

Wikipedia

{{cite report |last1=Bernasconi-Osterwalder |first1=Nathalie |title=Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP) |publisher=International Institute for Sustainable Development |date=June 2014 |url=https://www.iisd.org/system/files/publications/iisd_reply_eu_isds_ttip.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bernasconiosterwalder2014reply, author = {Bernasconi-Osterwalder, Nathalie}, title = {{Reply to the European Commission’s Public Consultation on Investment Protection and Investor-to-State Dispute Settlement (ISDS) in the Transatlantic Trade and Investment Partnership Agreement (TTIP)}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = jun, url = {https://www.iisd.org/system/files/publications/iisd_reply_eu_isds_ttip.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }