EU Commission set to betray us with ISDS

Faced with massive critique, the European Commission announced a consultation on investor-to-state dispute settlement (ISDS).

ISDS gives multinationals the right to sue states before special tribunals if changes in law may lead to lower profits than expected. Multinationals can challenge reform of copyright and patent law, challenge environmental and health policies.

The Commission even announced the publication of a proposed EU text. That seems a step forward.

But a diplomatic source told EU Trade Insights that other trade deals are unlikely to change. For instance the trade agreement with Canada also contains ISDS.

So the Commission will hold a consultation on ISDS that will attract the attention, and secretly advance ISDS in other agreements…

All ISDS negotiations will have to put on hold.

Let’s not forget: ISDS is not acceptable in the agreement with the US, not acceptable in the agreement with Canada, not acceptable in the agreement with Singapore, not acceptable in any agreement.

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EU Ombudsman conflates negotiation and ratification documents

I wrote a letter to the European Ombudsman to solve a misunderstanding regarding my complaint against the European Parliament (see below or pdf).

ACTA is dead in Europe, but there are still issues with disclosure of documents. In 2012, the European Parliament refused to disclose the parliament’s legal service’s opinion on ACTA, the Anti-Counterfeiting Trade Agreement. In September 2013 I filed a complaint with the European Ombudsman against the European Parliament over this. Unfortunately, the Ombudsman didn’t want to investigate my complaint, so I asked her to reconsider her decision. Her reply now shows she misunderstood my complaint.

In her reply, she refers to a decision on negotiation documents. This clarifies what went wrong. My complaint does not regard negotiation documents, but ratification documents. Negotiation documents are made by the negotiators (Commission, governments) during the negotiations. Ratification documents are made by the European Parliament (or Council) after the negotiations, during the ratification process.

According to EU case law institutions can refuse to disclose negotiation documents to protect mutual trust among negotiators. After the negotiations, the Commission published the final text. The contested legal service’s opinion is an assessment of this published text. Disclosure of this opinion can not harm the mutual trust among negotiators.

Citizen participation in ratification processes is essential, especially if the prior negotiations were confidential. An Ombudsman decision that legal service’s opinions related to the ratification process have to be disclosed would be of major importance for citizens.

Additionally, in my complaint against the parliament I argue that EU law is not compatible with the human right to participate in decision making processes. An Ombudsman discussion on this argument could also be interesting.

Other issues

The preparatory ACTA documents are still secret, despite an EDRi complaint to the Ombudsman. The Ombudsman added an interesting Further remark to the decision: “Given that Parliament’s application of Regulation 1049/2001 is affected by commitments such as the one entered into by the Commission in this case, Parliament, as a political body, could intervene with the Commission and the Council with a view to ensuring that, in future, the very nature of Parliament, which is openly to deliberate on such issues, is not undermined.”

The parliament lied about the existence of coordinators’ minutes related to ACTA. Last year I filed a complaint with the Ombudsman against this.

Beyond ACTA, Corporate Europe Observatory has an interesting appeal running over negotiation documents and the Council appeals against the judgment of the General Court (Fifth Chamber) delivered on 4 May 2012 in Case T-529/09: Sophie in ‘t Veld v Council (Case C-350/12 P).

——————-

complaint 1814/2013/RT

19 January 2014

Dear Ms O’Reilly,

I would like to kindly thank you for your reply on my request to reconsider your decision on complaint 1814/2013/RT. In your reply you refer to a decision on negotiation documents. This shows a misunderstanding of my complaint, as my complaint does not regard negotiation documents but ratification documents, for which disclosure is the norm. You conflate negotiation and ratification documents and erroneously apply case law on negotiation documents also on ratification documents. As the issues at stake are important and a fundamental misunderstanding came to light, I hereby ask you to reconsider your reply.

Ratification documents versus negotiation documents

It is essential to make a distinction between negotiation documents and ratification documents. Negotiation documents are made by the negotiators (Commission, governments) during the negotiations. Ratification documents are made by the European Parliament (or Council) after the negotiations, during the ratification process. Almost all negotiation documents are kept secret for a long time. Almost all ratification documents are immediately disclosed.

According to EU case law, disclosure of negotiation documents can harm the public interest as regards the protection of international relations. In 2009, I was the first in Europe to file a complaint against the secrecy of ACTA negotiation documents, Complaint 90/2009/(JD)OV. While the complaint did not lead to disclosure of documents, the Ombudsman’s formulation “citizens would have a clear interest in being informed about the ACTA” still was influential in the political process. Of course, years later, I didn’t refile a similar complaint – it wouldn’t have made sense. My present complaint does not regard negotiation documents, but ratification documents.

ACTA was initialed on 25 November 2010, this marked the end of the negotiations. The Commission published the final text, to be scrutinized and possibly ratified. After years of secret negotiations, finally public scrutiny and debate could start. The contested legal service’s opinions are assessments of the published final text. Neither the published final text nor the legal service’s opinions contain negotiation positions or anything like that.

The Parliament immediately published almost all ACTA ratification documents, such as studies, workshops, human rights assessment, debates, (draft) committee opinions and report. The Parliament only made some exceptions. First, the Parliament obscured the existence of committee coordinators’ minutes. In 2012 I filed a complaint regarding these minutes, Complaint 0262/2012/OV. Second, the Parliament refused to disclose the contested legal service’s opinions (which the Parliament produced itself in 2011, after the negotiations). While my 2009 complaint regarded negotiation documents, my 2012 and present complaint regard ratification documents.

During the ACTA negotiations, the Parliament had stressed the importance of openness. After the negotiations the Parliament produced and refused to disclose the contested legal service’s opinions – this shocked or amazed many people. At a Dutch House of Representatives’ committee meeting, 13 December 2011, minister of Economic Affairs, Agriculture and Innovation, Maxime Verhagen, said the refusal to disclose the European Parliament’s legal service’s opinion on ACTA was “gek” (odd/silly/crazy). He also said: “I support this Dutch citizen in spirit and deed”.

http://acta.ffii.org/?p=975

Why would a legal service’s opinion on an officially published text be kept secret? The Parliament did not refer to protection of the negotiations – that would not have been convincing as the negotiations were over before the documents were produced. To keep the legal service’s opinions secret, the Parliament invoked the public interest as regards the protection of international relations. The Parliament used a sole justification for invoking the public interest as regards the protection of international relations: article 18 Vienna Convention on the Law of Treaties (VCLT). The Parliament also invoked the protections of legal advice and the ongoing decision making process.

Conflating negotiation and ratification documents is unfounded

In your reply to my letter, the Ombudsman overlooks the distinction between negotiation documents and ratification documents, the Ombudsman conflates them. While my complaint is about ratification documents, the Ombudsman refers to a decision on negotiation documents. Two things go wrong here.

First, by referring to negotiation documents, the Ombudsman uses an argument which the Parliament itself did not use. The Parliament (rightly) did not conflate negotiation and ratification documents. The Parliament’s sole justification for invoking the protection of international relations is article 18 VCLT.

Second, decisions and case law on negotiation documents do not apply to ratification documents. The Ombudsman refers to Complaint 2393/2011/RA. The decision in Complaint 2393/2011/RA is based on Case T-301/10 In ‘t Veld v Commission. According to Case T-301/10 negotiation documents can be kept secret to allow mutual trust between negotiators and the development of a free and effective discussion during the negotiations (para. 119).

The decisive arguments in Case T-301/10 can not be used against disclosure in my case. Disclosure of the contested documents neither discloses negotiation positions nor disturbs mutual trust between negotiators or the development of a free and effective discussion during negotiations – as the negotiations were over before the documents were made, made by others than the negotiators, and the documents are just legal service’s opinions on a publicly available text.

As a result, Complaint 2393/2011/RA and Case T-301/10 are unrelated to my complaint. For similar reasons, Case T-529/09 Sophie in ’t Veld v Council is unrelated to my complaint. Case law on negotiation documents can not prejudice the openness of the contested legal service’s opinions.

The Ombudsman states that she has already taken a stance on similar if not identical arguments in Complaint 2393/2011/RA. This shows a fundamental misunderstanding as the Ombudsman decided Complaint 2393/2011/RA by referring to Case T-301/10, both of which, as we saw above, can not prejudice the openness of the contested documents. Ratification documents are not negotiation documents. Furthermore, in Complaint 2393/2011/RA the complainant invoked article 32 Vienna Convention on the Law of Treaties. In my case, the Parliament invoked article 18 VCLT. That is an other article.

Ratification documents

We saw above that case law on negotiation documents can not prejudice the openness of the contested documents. In my opinion, investigating my complaint involves three major questions.

First, did the Parliament err in law regarding article 18 VCLT? If the answer is affirmative, the Parliament’s sole justification for invoking the protection of international relations falls away.

Second, did I provide overwhelming public interest in disclosure? If the answer is affirmative, the protections of legal advice and the ongoing decision making process fall away.

Third, is the Parliament’s decision conform human rights law? In my complaint I argue that citizens have a human right to participate. The EU can only skip this human right by law, if necessary in a democratic society, and if proportionate.

If the answers to the first two questions are affirmative, the Parliament has to officially disclose the legal service’s opinions. If the answer to the third question is negative, the Parliament has to officially disclose the legal service’s opinions.

Documents not officially disclosed

The Ombudsman states that the documents were officially disclosed by an MEP. This is not correct, the documents could not be officially disclosed by an MEP, as they were produced upon request of committees. The coordinators of the legal affairs committee decided to release the documents, but did not actually do that. According to the Parliament, the coordinators were not competent to do this. See the 14 March 2012 answer to my 19 February 2012 confirmatory application: “(…) no decision exists to fully disclose document SJ661/11 which has been formally adopted by any competent political body of the European Parliament.”

Effet utile

In my opinion, there is a serious chance an investigation will lead to the decision that the Parliament has to officially disclose the legal service’s opinions. Indeed, why would legal service’s opinions on an officially published text be kept secret?

Citizen participation in ratification processes is essential, especially if the prior negotiations were confidential. An Ombudsman decision that the legal service’s opinions have to be disclosed would be of major importance for citizens.

This will help citizens (including me) in the future. While citizens will be able to challenge the Parliament’s error in law in the future, if made again, the procedures to do this will take so much time that the parliamentary ratification process of an international agreement will long be over before citizens (including me) will have gained access to the legal service’s opinion. Timely discussion of the Parliament’s error in law (now) and future timely disclosure of legal service’s opinions is essential for citizens’ participation in the decision making process.

Discussion of my human rights argument may bring further effet utile.

yours sincerely,

Ante Wessels

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EU faces double whammy with investor-to-state dispute settlement

In an interview with Inside U.S. Trade, European Parliament International Trade committee chairman Vital Moreira, talking about the trade negotiations with the United States (TTIP / TAFTA), defended the investor-to-state dispute settlement (ISDS) mechanism.

Under ISDS companies can sue states if new laws threaten to make expected profits lower. The cases are handled outside national court systems, by tribunals consisting of three investment lawyers. Civil society groups see ISDS as a threat to democracy.

Moreira’s defense actually shows the discriminatory nature of investor-to-state dispute settlement and that the EU faces a double whammy with ISDS, through direct effect of treaties.

Inside U.S. Trade:

“Moreira said he personally does not have a principled objection to ISDS, and actually argued that its inclusion in TTIP could provide additional protections for EU investors in the U.S.

For instance, Moreira noted that in the EU, once an international investment agreement is approved, it becomes the ‘law of the land.’ This means a foreign investor could bring legal action in a member state court or the European Court of Justice arguing a breach of the treaty. But the same is not true under U.S. law, where, without ISDS, the only recourse for a foreign investor is to argue that a government violated U.S. or state law with respect to the way its investment was treated.”

Discrimination

Moreira notes that in the US the only recourse for a foreign investor is to argue that a government violated US or state law.

That is correct. The same is of course true for local (US) investors, they too can only invoke US or state law. The US is generally regarded as having strong protection of investments and a good court system, so I do not see the problem. Moreira’s words imply that TTIP will have stronger investment protections than US and EU law.

That is legislation by the back door.

In the US, the additional protections will not be available for local investors. They will only be available for EU investors, through ISDS.

That’s discrimination.

Law of the land

In the EU, the extra investment protections will become the “law of the land”, according to Mr Moreira.

Investment treaties give foreign investors extra rights. So, US investors will have more rights before EU courts than EU companies?

On top of that US investors can also use ISDS arbitration, not available to EU companies.

That’s double discrimination.

Double whammy

Direct effect of investment treaty protection (“law of the land”) is a serious issue. Would EU courts follow the interpretations of ISDS tribunals?

That would put a captive in-crowd on top of the EU legal system.

If EU courts do not follow the interpretations of ISDS tribunals, investors can use ISDS tribunals to overturn the EU courts’ decisions.

That would put a captive in-crowd on top of the EU legal system.

That’s a double whammy.

This is where investors would like to see our governments, lawmakers and courts. Checkmate. But why would politicians like this?

Unnecessary risks

It’s unnecessary. Joseph Stiglitz, Nobel laureate in economic sciences, notes that investors that do not trust a foreign legal system can take an insurance.

Problem solved.

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European Parliament waives the right to be informed

In an interview with Inside U.S. Trade, European Parliament International Trade committee Chairman Vital Moreira said, regarding the trade negotiations with the United States (TTIP / TAFTA), that he is not now pressing the European Commission to provide parliament members with access to U.S. negotiating proposals, but that could change if the U.S. authorizes the commission to share these proposals with member states.

According to the Treaty on the Functioning of the European Union article 218 (10), the European Parliament shall be immediately and fully informed at all stages of the procedure. Apparently, the US demands that the EU violates its founding treaties. And the commission and parliament gave in. That’s not a good signal, giving in from the start. What else will we trade away?

The US is in a stronger position, the EU could use public disclosure to strengthen its negotiation position. There is so much at stake in these negotiations, details are crucial. It is irresponsible that the parliament waives its constitutional rights and gives in to secrecy demands.

In my opinion, the parliament has to correct Mr. Moreira.

Mr. Moreira also said the inclusion of investor – state dispute settlement (ISDS) in the EU-Canada Comprehensive Economic and Trade Agreement (CETA) sets a precedent in favor of its inclusion in a TTIP agreement.

“CETA is a precedent in favor of ISDS, and maybe the conditionalities there, guarantees that surround the adoption of ISDS in the CETA, could be also imported into TTIP,” he said, according to Inside US Trade.

Really? Mr. Moreira talks as if the controversial ISDS mechanism in CETA is already accepted and adopted by the EU. The negotiations are just finished, the text is still secret for (most) members of parliaments and for the public. The ratification process still has to start.

See what happens here? Secret negotiations, just some members of the European Parliament (including Mr. Moreira) had (some) access. And now it is a done deal, as far as Moreira is concerned.

This is not parliamentary oversight. The chairman of the trade committee, the man who has to ascertain openness, citizen participation and democratic scrutiny, ascertain legitimacy, quality and balance, ascertain that no tunnel vision harms the outcome, is fine with secrecy and tries to create faits accomplis (accomplished, presumably irreversible deeds).

A chairman has to try to safeguard best procedures. In my opinion, Mr. Moreira fails here.

Mr. Moreira is a social-democrat, he wants to create jobs. I fully agree with this intention. He may also genuinely believe that openness reduces the chances of an agreement being adopted. He may be right, as there will always be trade offs.

But the crucial point is that trade agreements may have perverse effects contrary to what was originally intended. Including on jobs.

Scrutiny is essential. Whatever good intentions, by harming scrutiny, Vital Moreira harms the union.

Regarding ISDS, see the next post (upcoming).

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Critical Dutch parliament resolution on investor – state dispute settlement

Yesterday the Dutch Parliament (Tweede Kamer) adopted a resolution critical of investor – state dispute settlement (Dutch, pdf). Google translation. My translation:

RESOLUTION OF THE MEMBER Van Ojik C.S.
Presented November 28, 2013

The House,

heard the deliberations,

noting that investor – state dispute settlement (ISDS), or arbitration under an investment treaty, may be part of the trade agreement between the United States and the European Union;

takes the view that inclusion of ISDS in the trade agreement has a number of undesirable consequences, including providing companies operating internationally the possibility to bypass the national justice system;

requests the government to investigate, in the short term, the potential social and environmental risks and the consequences of ISDS for the Netherlands and the financial risks for the Dutch government, and to inform the House about the results of this research;

requests the Government as well, to act in a European context, in order to deal with undesirable effects of the agreement,

and proceeds to the order of the day.

Van Ojik
Jan Vos
Jasper van Dijk

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Negotiators determined to transfer sovereignty to companies

During a stakeholders meeting on the TTIP / TAFTA trade agreement, EU and US negotiators showed determination to transfer sovereignty to companies.

On Friday 15 November, the last day of the second TTIP negotiating round, the EU commission organised a stakeholders meeting. Chief negotiators Dan Mullaney (US) and Ignacio Garcia Bercero (EU) gave a short talk and answered questions.

In the stakeholders meeting many topics were discussed, from investor – state dispute settlement, the right to water, the precautionary principle, to consumer safeguards. Here is a (low quality) audio recording, it starts half a minute into the meeting.

Sovereignty

There were many questions about investor – state dispute settlement (ISDS). Under ISDS companies can sue states if new laws threaten to make expected profits lower. The cases are handled outside national court systems, by tribunals consisting of three investment lawyers. Civil society groups see ISDS as a threat to democracy.

ISDS transfers sovereignty in two ways. It gives companies equal standing to states. And it gives investment lawyers the power to decide in conflicts between companies and states.

Why on earth would one want to transfer sovereignty to companies and investment lawyers?

According to Mr. Garcia Bercero a well designed ISDS system can preserve the right to regulate:

“I first want to say, very clear, very firmly, that we certainly do not believe that a well designed investor to state dispute settlement system could compromise the right to regulate.

One of the fundamental issues we want to look at very carefully if we decide on any potential investment protection rules in a treaty, as we indeed did in the agreement with Canada, is to make sure that parties have the right to make policies in the public interest.” (at 48.20)

Mr. Garcia Bercero turns the question around. He takes transferring sovereignty for granted, and then wants to safeguard space for states to regulate. States become the begging parties. That is the world upside down.

Furthermore, the commission’s reassurances do not convince. Mr. Garcia Bercero states the commission got it right in the ISDS chapter in the agreement with Canada. However, already months ago Nathalie Bernasconi-Osterwalder showed serious flaws in the (leaked) draft. Moreover, arguments in favour of ISDS on the commission’s Q&A webpage were scrutinized by Corporate Europe Observatory, after which the commission withdrew the statements. A second commission attempt was strongly criticised by Glyn Moody. The commission’s beliefs are firm, but it comes empty handed.

Mr. Mullaney talked about a fair, quick and transparent ISDS system that safeguards regulatory space. Nothing would prevent non-discriminatory legitimate policy objectives.

He too takes transferring sovereignty for granted, and then wants to safeguard limited space for states to regulate. The policy objectives have to be non-discriminatory and legitimate. What is non-discriminatory and legitimate? The investment lawyers will decide on that.

Then someone asked the essential question: why is ISDS needed at all? Both negotiators mentioned protection against discrimination.

Mr. Mullaney:

“I think it is fair to say that measures in the United States that specifically discriminate against EU [parts?] or EU companies and measures in Europe that discriminate against US property or companies, that would in fact be something you want to avoid in the agreement.” (at 1.41.26)

The answer doesn’t clarify why ISDS would be needed, as both the EU and US have good courts, and state – state dispute settlement can solve remaining issues.

In related news, last week Nobel laureate in economics Joseph Stiglitz wrote an opinion on ISDS. He makes it clear that the instrument is unnecessary:

“There is no reason that foreign-owned property should be better protected than property owned by a country’s own citizens. Moreover, if constitutional guarantees are not enough to convince investors (…) foreigners can always avail themselves of expropriation insurance provided by the Multilateral Investment Guarantee Agency (a division of the World Bank) or numerous national organizations providing such insurance.”

He also explains what is really behind ISDS:

“But those supporting the investment agreements are not really concerned about protecting property rights, anyway. The real goal is to restrict governments’ ability to regulate and tax corporations – that is, to restrict their ability to impose responsibilities, not just uphold rights. Corporations are attempting to achieve by stealth – through secretly negotiated trade agreements – what they could not attain in an open political process.”

A union without clothes

In my opinion, the EU is in dire straights. The EU gave us a euro with design flaws, it may soon transfer sovereignty to companies and investment lawyers. The political elite fails. It is time for a wake up call.

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Trade negotiations and the EU’s strategic interests

This week the EU and US hold a second round of trade negotiations.

The military and economic power of states depend on their key industries. Both the EU and US want to strengthen their industries, they carefully listen to them.

But a corporate agenda is not the same as a strategic interests agenda. For instance, trading away our policy space, access to medicines, our ability to fight climate change, or transferring sovereignty to corporations does not serve the EU’s strategic interests.

The EU Commission makes a mistake. It negotiates in secret. This may make negotiations more simple, but as multinationals are much better informed and listened to than civil society and citizens, there is a serious risk the end result will be unbalanced and will harm the EU’s strategic interests.

Openness and citizens’ participation would serve the EU’s strategic interests and human values. Secrecy weakens the EU.

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Will the Ombudsman rise to the occassion?

A few weeks ago I filed a complaint with the Ombudsman against the European Parliament over the secrecy of legal advice regarding ACTA. The Ombudsman replied that she didn’t want to investigate the complaint as I already got access to the documents (unofficially released versions). In a letter I ask her to reconsider the decision, as the decision seems not in line with an earlier Ombudsman decision, and, more importantly, an investigation could be of major importance.

Key paragraphs:

“The secrecy surrounding international negotiations is very problematic. For instance, the secrecy surrounding ACTA (Anti-Counterfeiting Trade Agreement) led to various European Parliament resolutions, two Ombudsman complaints and a Court case.

All these cases failed, as the “protection of the public interest as regards international relations” exception to openness has an “absolute” character. Once successfully invoked, the Institution does not have to balance it with the public interest in disclosure.

The Parliament even raised this international relations exception, that has such a devastating effect on openness, for legal advice it produced itself after the negotiations. This extends the brute force of the international relations exception beyond reasonable scope. The Parliament uses the international relations exception to negate landmark EU Court of Justice Turco case law on legal advice. In my complaint I challenge this over-extension by arguing that the Parliament erred in law. Challenging this over-extension and defending the landmark Turco case law on legal advice is of major importance.

Furthermore, I challenge the “absolute” character of the international relations exception by pointing out it is not compatible with human rights. If this reasoning finds acceptance, it may break the absolute character of the exception. It could lead to more open negotiations of international agreements. This would be of major importance too.”

The letter (pdf)

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ACTA-plus damages in EU-Singapore Free Trade Agreement

The EU and Singapore initialed and published the text of the EU-Singapore Free Trade Agreement (EUSFTA). The text contains the much criticized retail price damages, known from the Anti-Counterfeiting Trade Agreement (ACTA), the treaty the European Parliament rejected last year. On top of the retail price damages the judicial authorities have the authority to order the infringer to pay the right holder the infringer’s profits. This heightens the already very high damages.

Retail price damages in EUSFTA

Article 11.44.2 EUSFTA: “In determining the amount of damages for infringement of intellectual property rights, a Party’s judicial authorities shall have the authority to consider, inter alia, any legitimate measure of value the right holder submits, which may include lost profits, the value of the infringed goods or services measured by the market price, or the suggested retail price.” [fn 35] (pdf)

Infringer’s profits in EUSFTA

The article continues: “At least in cases of copyright or related rights infringement and trademark counterfeiting, each Party shall provide that its judicial authorities have the authority to order the infringer to pay the right holder the infringer’s profits that are attributable to the infringement, whether as an alternative to or in addition to or as part of the damages.” (emphasis added)

One of the options here is: in addition to the damages. That is above the ACTA damages.

Very high damages

Retail price damages can turn out very high. To give an example, a two terabyte hard disk can contain 540.000 songs. Imagine someone copies a hard disk full of songs. The rights holder can claim 540.000 euro, based on a retail price of 1 euro per song.

A judge may not award such damages, but the claim has a terrifying chilling effect. Who wouldn’t settle for one percent, 5400 euro? Otherwise, an infringer runs the risk of having to sell his or her house for copying a hard disk.

The threat of excessive damages payments will also have a chilling effect on Internet service providers, and so on the right to freedom of expression.

A second example. In emerging economies, including European, most people can’t afford to pay the retail price. They buy a copy, their only way to participate in cultural life – a human right.

Their enabler to the right to participate in cultural life may sell 100 illegal copies of a CD for 2 euro, the enabler then has a gross revenue of 200 euro. With damages based on retail price, the enabler may have to pay 2000 euro damages (100 x 20), ten times his gross revenue. And to add insult to injury, he may have to turn in his meager profits and may have his computer destroyed.

The secret negotiations led to ACTA-plus damages which will have a terrifying chilling effect and which will harm the right to freedom of expression, the right to participate in culture and the right to access to knowledge.

Some details

fn 35 reads: “In the case of the Union, this would also include, in appropriate cases, elements other than economic factors such as the moral prejudice caused to the right holder by the infringement.”

fn 33 reads: “A Party may exclude patents from the scope of Section C (Civil Enforcement of Intellectual Property Rights).”

Update

Marietje Schaake’s Parliamentary question to Commissioner de Gucht on ACTA provisions in EU-Singapore FTA text

Commission answer: http://www.europarl.europa.eu/sides/getAllAnswers.do?reference=E-2013-012147&language=EN

I’m not convinced by the commission’s answer. The commission writes that the overall principle is adequate damages, and “paragraph 2 of Article 11.44 of the EU-Singapore FTA only illustrates a wide range of optional methods”. Yes, but these optional methods are in my opinion above adequate, as I show above. When you give examples of adequate which are above adequate, you distort legal thinking, you mess with definitions.

Then, the article continues (see above) with “judicial authorities have the authority to order the infringer to pay the right holder the infringer’s profits that are attributable to the infringement, (…) in addition to (…) the damages.”

So this is in addition to the damages. Does the end result still have to be adequate, or can it go above that, as the text says “in addition”?

If the end result has to be adequate, just adequate without any addition would have been best. The FTA text is confusing, seems meant to create an upward trend.

The FTA exports EU law (Intellectual Property Rights Enforcement Directive (IPRED): inaudita altera parte, injunctions, etc). I’m not happy with that, as it takes away policy space needed for reform. Last year we had a consultation on reform of IPRED, the FFII argued that the EU has to bring IPRED in line with the ICESCR.

FFII, 2013, EU law and the International Covenant on Economic, Social and Cultural,
Rights (pdf)

See also: FFII, 2014, Make copyright compatible with the UN International Covenant on Economic, Social and Cultural Rights

Exporting IPRED makes that harder, and makes reform vulnerable for both state-to-state and investor-to-state dispute settlement (if the latter makes it to the agreement, there are plans to add it at some point).

Regarding Glyn’s question below, which I had overlooked (apologies): Yes, like ACTA the council and parliament will have to ratify it.

And then? Possibly the commission will propose to update IPRED, oh, it is not a change, just bring language up to date… And so the IP ratchet goes on.

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Complaint against European Parliament over secret legal advice

The European Parliament decided to keep the opinions of its legal service on the Anti-Counterfeiting Trade Agreement (ACTA) secret. I just filed a complaint with the ombudsman against the parliament over this. I argue that the decisions to keep the documents secret were acts of maladministration and a violation of the human right to participate, enshrined in the International Covenant on Economic, Social and Cultural Rights (ICESCR) and the International Covenant on Civil and Political rights (ICCPR).

ACTA is dead in Europe, this complaint is about access to documents – essential for civil society work.

In 2011 two parliamentary committees asked the parliament’s legal service an opinion on the Anti-Counterfeiting Trade Agreement. The legal affairs committee decided to release the opinions to the public. The parliament’s vice-president responsible for access to documents overturned this decision. The FFII filed an access to documents request but received almost completely blacked out documents. (Blog post with image)

EU regulation 1049/2001 on access to documents

The EU’s regulation on access to documents has a set of exceptions to openness that have to be balanced with the public interest in disclosure. Examples are the protection of legal advice and the protection of the ongoing decision-making process. The parliament raised both exceptions. In my complaint I provide counter-arguments and an overriding public interest in disclosure.

But the regulation on access to documents also has a set of exceptions to openness – with a broad discretion for the institutions – that do not have to be balanced with the public interest in disclosure. An example is the protection of the public interest as regards international relations.

If publication of documents may undermine this interest, the institutions do not have to balance this interest with the public interest in disclosure. Just a minimal undermining of the public interest as regards international relations, and secrecy is allowed, however big the public interest in disclosure may be.

This is the reason that all requests for the ACTA negotiation documents failed (FFII, In ‘t Veld, EDRi). Also in this case the parliament raised this exception that has such a devastating effect on openness. To counter this, I use two approaches: brute force and human rights.

Vienna Convention on the Law of Treaties

The parliament argued, based on Article 18 of the Vienna Convention on the Law of Treaties (VCLT), that the EU was under certain obligations concerning due and successful ratification of ACTA and that disclosure of the legal service’s opinions could undermine successful ratification in third countries, and thus harm the protection of the public interest as regards international relations.

In the complaint I argue that the parliament’s interpretation of the VCLT is not conform the VCLT text, the history of the VCLT or earlier interpretations of the VCLT. The Parliament erred in law. I conclude that disclosure of the legal service’s opinions is not in conflict with the Vienna Convention on the Law of Treaties or ACTA’s final provisions.

There were of course no certain obligations concerning due and successful ratification – the parliament itself rejected ACTA later on. This is the complaint’s core argument.

Human rights

In addition I argue that EU regulation 1049/2001 on access to documents has to be interpreted in a way that is compatible with the EU’s human rights obligations. I argue that the right to participate is a human right, enshrined in the International Covenant on Economic, Social and Cultural Rights and the International Covenant on Civil and Political rights. Limitations on the human right to participate are possible, but they have to be necessary in a democratic society and proportionate. Regulation 1049/2001 may give the institutions a broad discretion, the ICCPR and ICESCR have a stricter test. The parliament’s decisions fail this stricter test.

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