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Respondent details

  • Company/Organisation: Health Action International (HAI) Europe, the Commons Network, Knowledge Ecology International (KEI) Europe, Health GAP (Global Access Project), Salud por Derecho, the International Society of Drug Bulletins (ISDB), the Medicines in Europe Forum (MiEF) and Universities Allied for Essential Medicines (UAEM)
  • Location: Netherlands
  • Activity: Health Action International (HAI) is an independent, global network, working to increase access to essential medicines and improve their rational use through research excellence and evidence-based advocacy.
  • Profile: Non-governmental organisation
  • Transparency register: Yes
  • Prior investment in the US: No

Contribution

A. Substantive investment protection provisions

Explanation of the issue

The scope of the agreement responds to a key question: What type of investments and investors should be protected? Our response is that investment protection should apply to those investments and to investors that have made an investment in accordance with the laws of the country where they have invested.

Approach in most investment agreements

Many international investment agreements have broad provisions defining “investor” and “investment”.

In most cases, the definition of “investment” is intentionally broad, as investment is generally a complex operation that may involve a wide range of assets, such as land, buildings, machinery, equipment, intellectual property rights, contracts, licences, shares, bonds, and various financial instruments. At the same time, most bilateral investment agreements refer to “investments made in accordance with applicable law”. This reference has worked well and has allowed ISDS tribunals to refuse to grant investment protection to investors who have not respected the law of the host state when making the investment (for example, by structuring the investment in such a way as to circumvent clear prohibitions in the law of the host state, or by procuring an investment fraudulently or through bribery).

In many investment agreements, the definition of “investor” simply refers to natural and juridical persons of the other Party to the agreement, without further refinement. This has allowed in some cases so–called “shell” or “mailbox” companies, owned or controlled by nationals or companies not intended to be protected by the agreement and having no real business activities in the country concerned, to make use of an investment agreement to launch claims before an ISDS tribunal.

The EU's objectives and approach

The EU wants to avoid abuse. This is achieved primarily by improving the definition of “investor”, thus eliminating so –called “shell” or “mailbox” companies owned by nationals of third countries from the scope: in order to qualify as a legitimate investor of a Party, a juridical person must have substantial business activities in the territory of that Party.

At the same time, the EU wants to rely on past treaty practice with a proven track record. The reference to “investments made in accordance with the applicable law” is one such example. Another is the clarification that protection is only granted in situations where investors have already committed substantial resources in the host state - and not when they are simply at the stage where they are planning to do so.

Link to reference text

Taking into account the above explanation and the text provided in annex as a reference, what is your opinion of the objectives and approach taken in relation to the scope of the substantive investment protection provisions in TTIP?

Based on the fact that the definition of ‘investment’ in free trade agreements and bilateral investment treaties is much broader than the real property rights and other specific interests in property that are typically protected under domestic property rights law, including IP rights, we have serious concerns that the definition of investment will be similar in TTIP. An excessively broad definition will allow expansive interpretation by arbitrators, including the inclusion of all kinds of IP rights. By defining investments as “every kind of asset having an economic value,” pharmaceutical companies may file claims arising from investments that are based purely on their IP rights, marketing approvals, licensing agreements, import permits, and other contracts in the foreign jurisdiction at issue independent of the real benefit of the product for the patient. An overly broad definition of investments will therefore allow companies to undermine national public health policies used to ensure affordable access to medicines by claiming that a government’s health regulations detract from the enjoyment of their IP-related ‘investments’ by challenging decisions to grant, deny or withdraw patent applications or other forms of IP protection on medical technologies and challenging the legitimate use of TRIPS flexibilities. The potential for US pharmaceutical companies that invest in the EU to use this form of arbitration against EU Member States and challenge pro-public health measures is evident from recent challenges by major US, Canadian and French companies that have led to a number of arbitration decisions under ISDS provisions in investment treaties . In this context, we anticipate that US pharmaceutical companies could harm public health policies in four ways by: i. Damaging EU Member States’ public health policies to protect affordable access to medicines by claiming that a government’s health regulations undermine enjoyment of their IP-related ‘investments’. As a reminder, the World Trade Organization’s (WTO) Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS), adopted in 1994, mandated global IP rules, including a minimum 20-year patent term for medicines. It was a major victory for rich countries and the pharmaceutical industry, representing the single-greatest expansion of IP protection in history. Both the EU and US have adopted a standard of IP protection and enforcement that goes well beyond the 20 years mandated by TRIPS, including monopoly protections on regulatory data that impede or prevent regulatory approvals of generic equivalents and patent term extensions . ISDS, as proposed by the EU and US, includes IP in the definition of ‘investment’, drawing on multiple sources of IP rights, including many that are TRIPS-plus . Accordingly, investment clauses incorporating IP investor and investment rights can greatly expand the scope of substantive protections, and ISDS adds yet another remedy beyond private enforcement, border measures, criminal prosecutions, and state-to- state dispute resolution. ISDS therefore adds yet another, and unnecessary, means of strengthening and enforcing IP rights for pharmaceutical companies. Two examples are particularly instructive: Example 1: Foreign pharmaceutical companies have started to use ISDS to challenge decisions to grant, deny or withdraw patent applications or other forms of IP protection on medical technologies. The Eli Lilly case against Canada clearly demonstrates that a pharmaceutical company can challenge states’ routine patent validity decisions under ISDS pursuant to investor rights in a free trade agreement. In 2013, the US-based company, Eli Lilly, accused Canada of violating its obligations to foreign investors under the North American Free Trade Agreement (NAFTA) by allowing its courts to invalidate patents for two of its drugs based on a lack of proof of their ineffectiveness in relation to what was promised in the patent application. Eli Lilly is claiming indirect (regulatory) expropriation and a violation of minimum standards of treatment and is demanding $500 million in compensation for the invalidation of two patents, as well as challenging Canada’s legal doctrine for determining a patent’s validity . An important point is that Canada’s highest courts had refused Eli Lilly's patent claims. The company lost its invalidation appeal at the Appeal Court level, and the Supreme Court of Canada has declined to hear its further appeal. Eli Lilly's claim at a North American Free Trade Agreement (NAFTA) panel is therefore an attempt to appeal a decision of the highest courts and to use the ISDS system to get around binding judicial precedent. The Canadian government is consequently insisting in the Comprehensive Trade and Investment Agreement (CETA) talks with the EU that IP protections be circumscribed in an effort to avoid similar challenges of the courts’ authority in future disputes. It has been reported that negotiations are currently stuck as a result of Canada's request to exclude certain IP policies from the scope of the ISDS mechanism. Europe will face similar challenges of its laws and regulations by Canadian and US investors if CETA and TTIP investor rights provisions proceed as contemplated. Example 2: ISDS might be used to challenge legitimate use of TRIPS flexibilities. In 2001, the WTO ministerial conference adopted the Doha Declaration on TRIPS and Public Health. It affirms that WTO rules on IP should not prevent countries from taking measures to protect public health. Such measures are known as ‘TRIPS flexibilities’ (such as transition periods, compulsory licensing, government use, strict standards of patentability, exceptions and limitations to patents). For example, low-and middle-income countries, like Thailand, Brazil, Ecuador, Indonesia, and India, as well as many sub-Saharan countries, including least-developed countries, have effectively used TRIPS flexibilities to issue compulsory government-use licences and extend the grant and/or enforcement of medicine patents to gain access to generic medicines and reduce medicine prices . The EU has also implemented paragraph 6 of the Doha Declaration, which allows production for export of medicines under a compulsory license to developing and least-developed countries that lack production capacity. Millions of people living with HIV/AIDS are alive today because they can access cheaper medicines through generic competition. In its consultation document, the European Commission proposes to exclude one specific TRIPS flexibility—compulsory licensing—from the scope of ISDS, but it is not a sufficient safeguard. That exclusion is vaguely defined and does not take into account that Member States may use other legitimate TRIPS flexibilities (e.g., strict standards of patentability, exceptions and limitations to patents) to ensure access to medicines for all. Moreover, the exclusion does not cover other limitations and exceptions to other IP rights. Instead, overly broad interpretations of fair and equitable treatment (FET), indirect expropriation, or national treatment and most favoured nation status can be interpreted to protect almost any alleged IP-based expectation of profit so long as IP rights are included in the definition of investment. v. Challenging EU Member States’ or regulatory bodies’ decisions on marketing authorisation, pricing, reimbursement and medicines data transparency We are also very concerned that ISDS can challenge EU Member States’ or regulatory bodies’ decisions on marketing authorisations, pricing and reimbursement of medicines and data transparency. The Apotex case is demonstrative of challenges made to a governmental decision on marketing authorisation. Apotex, a Canadian generic pharmaceutical corporation, has previously alleged that US courts wrongly interpreted federal law, and that such errors violated the NAFTA’s national requirement. Apotex claimed that it was subject to mistreatment by the US, its agencies (particularly the US Food and Drug Administration) and its federal courts in the course of the company's efforts to market generic versions of the antidepressant medicine, sertraline (Zoloft), and the anti-cholesterol medicine, pravastatin (Pravachol), in that country. Apotex asserted that the FDA treated other US investors and US-owned investments more favourably in not subjecting these other investors to a measure as severe as the import alert imposed on the Apotex products. The US objected to the jurisdiction of the NAFTA Tribunal on the grounds, inter alia, that Apotex did not qualify as an ‘investor’ that had made an ‘investment’ in the US for the purposes of NAFTA. The Tribunal ultimately dismissed all the claims and ordered Apotex to pay the legal fees and arbitral expenses of the US, but ISDS claims can still be used to challenge routine regulatory decisions. Challenges to EU Member States’ decisions on pricing and reimbursement are also concerning. New patented medicines introduced on the market are increasingly expensive, and the rise in expenditure on patented medicines outpaces savings brought through the use of generics. At the beginning of the 21st century, affordability of treatment became a problem, even in developed countries, especially for serious conditions such as cancer. To date, EU Member States have exclusive competence to determine and negotiate the price and extent of reimbursement of (new) medicines. The organisation of their health system is, in fact, a national prerogative and the subsidiarity principle applies. Member States can use their competence to negotiate a price and design a reimbursement scheme and procurement practices that best meets their citizens’ public health needs. For example, they can use this competence to impose price cuts and/or fixed price and reimbursement decisions based on the added therapeutic value of new drugs compared to existing medicines in the market. Through TTIP, the Pharmaceutical Research and Manufacturers of America (PhRMA) is putting pressure for limiting the influence of European health technology assessment bodies. PhRMA requires “that in the framework of pricing and reimbursement decisions, countries shall not duplicate the assessment conducted by regulatory agencies for market approval purposes" . The subsidiarity of Member States may be seriously jeopardised since ISDS can be used to challenge, for instance, recent policies where Member States have cut medicine prices when faced with the need to cut public spending in times of austerity. These challenges are particularly likely when a country adopts new measures that frustrate companies’ expectations of being able to impose monopoly prices. Pharmaceutical companies’ submissions to the Office of the US Trade Representative (USTR) in the context of the Special 301 consultations show that these concerns are real. vi. Challenging new EU transparency requirements and expanding pharmaceutical control over clinical data Despite the adoption of a new regulation on clinical trials to improve transparency in the EU in April 2014 , the pharmaceutical industry continues to strongly oppose mandatory public disclosure of detailed clinical trial results. Two US pharmaceutical companies have sued the European Medicines Agency over its decision to grant access to clinical trial data on one of their medicines . Despite being a public good , the industry claims that clinical trial data is commercially confidential—even a trade secret—and requires the “establish[ment of a] harmoni[s]ed list of clinical trial result data fields and agree[ment] on which may be disclosed to the public (uniform protection of confidential commercial info and trade secrets).” If implemented, ISDS will most likely enable companies to sue governments against their decision to grant public access to clinical trial data undermining the protection of public health. vii. Challenging other public health-related measures implemented by EU Member States Health is a fundamental human right, which governments have the obligation to fulfil. ISDS can, however, challenge public health-related measures implemented by EU Member States. As an example, in Achmea v. the Slovak Republic in 2012, the Dutch health insurer sued the Slovak Republic under a bilateral investment treaty and was awarded €22 million in compensation from Slovakia. Slovakia was, indeed, punished for reversing its health privatisation policy. More recently, at the 67th World Health Assembly in Geneva in May, 2014, Professor David Price of Queen Mary University suggested that national policies, such as planning the number of hospital beds, might be removed under pressure of TTIP, with the aim of increasing competition for health service providers and attracting foreign investment . We strongly recommend that IP be totally excluded from the definition of ‘investment’ in TTIP and any trade agreement. We also request the exclusion of the vague concepts such as ‘expectation of gain or profit’ and ‘the assumption of risks’ from the scope of the definition.

Explanation of the issue

Under the standards of non-discriminatory treatment of investors, a state Party to the agreement commits itself to treat foreign investors from the other Party in the same way in which it treats its own investors (national treatment), as well in the same way in which it treats investors from other countries (most-favoured nation treatment). This ensures a level playing field between foreign investors and local investors or investors from other countries. For instance, if a certain chemical substance were to be proven to be toxic to health, and the state took a decision that it should be prohibited, the state should not impose this prohibition only on foreign companies, while allowing domestic ones to continue to produce and sell that substance.

Non-discrimination obligations may apply after the foreign investor has made the investment in accordance with the applicable law (post-establishment), but they may also apply to the conditions of access of that investor to the market of the host country (pre-establishment).  

Approach in most existing investment agreements

The standards of national treatment and most-favoured nation (MFN) treatment are considered to be key provisions of investment agreements and therefore they have been consistently included in such agreements, although with some variation in substance.

Regarding national treatment, many investment agreements do not allow states to discriminate between a domestic and a foreign investor once the latter is already established in a Party’s territory. Other agreements, however, allow such discrimination to take place in a limited number of sectors.

Regarding MFN, most investment agreements do not clarify whether foreign investors are entitled to take advantage of procedural or substantive provisions contained in other past or future agreements concluded by the host country. Thus, investors may be able to claim that they are entitled to benefit from any provision of another agreement that they consider to be more favourable, which may even permit the application of an entirely new standard of protection that was not found in the original agreement. In practice, this is commonly referred to as "importation of standards".

The EU’s objectives and approach

The EU considers that, as a matter of principle, established investors should not be discriminated against after they have established in the territory of the host country, while at the same recognises that in certain rare cases and in some very specific sectors, discrimination against already established investors may need to be envisaged. The situation is different with regard to the right of establishment, where the Parties may choose whether or not to open certain markets or sectors, as they see fit.

On the "importation of standards" issue, the EU seeks to clarify that MFN does not allow procedural or substantive provisions to be imported from other agreements.

The EU also includes exceptions allowing the Parties to take measures relating to the protection of health, the environment, consumers, etc. Additional carve-outs would apply to the audio-visual sector and the granting of subsidies. These are typically included in EU FTAs and also apply to the non-discrimination obligations relating to investment. Such exceptions allow differences in treatment between investors and investments where necessary to achieve public policy objectives.

Link to reference text

Taking into account the above explanations and the text provided in annex as a reference, what is your opinion of the EU approach to non –discrimination in relation to the TTIP? Please explain.

The right of governments to introduce policies that protect public health must be safeguarded because it constitutes a necessary mechanism in meeting their ‘duty of care’ to citizens. In some cases, discrimination against certain investors may be necessary to achieve public health goals. In other words, non-discriminatory treatment of investors is not a principle that serves public health goals and should not take priority over public health. Moreover, vaguely worded provisions that guarantee foreign investors a ‘minimum standard of treatment’, including fair and equitable treatment, open the door to investor-state claims over a wide range of government measures that are otherwise permissible under nations’ constitutions and legal systems. Furthermore, companies will not only be able to use the substantive investment protection provisions in TTIP, but can cherry-pick protection from any other investment agreement that the EU or EU Member States signed or will be signing. The interpretation of non-discriminatory treatment of investors could result in tribunal orders to compensate foreign firms for public health interest policies that appear to be neutral, but that have an inadvertent, disproportionate impact on foreign investors. Moreover, the burden of proof lies on governments rather than investors to justify their actions. Furthermore, the non-discriminatory treatment will allow investors to challenge other public health-related measures implemented by EU Member States. As an example, in Achmea v. the Slovak Republic in 2012, the Dutch health insurer sued the Slovak Republic under a bilateral investment treaty and was awarded €22 million in compensation from Slovakia. Slovakia was, indeed, punished for reversing its health privatisation policy. More recently, at the 67th World Health Assembly in Geneva in May, 2014, Professor David Price of Queen Mary University suggested that national policies, such as planning the number of hospital beds, might be removed under pressure of TTIP, with the aim of increasing competition for health service providers and attracting foreign investment .

Explanation of the issue

The obligation to grant foreign investors fair and equitable treatment (FET) is one of the key investment protection standards. It ensures that investors and investments are protected against treatment by the host country which, even if not expropriatory or discriminatory, is still unacceptable because it is arbitrary, unfair, abusive, etc. 

Approach in most investment agreements

The FET standard is present in most international investment agreements. However, in many cases the standard is not defined, and it is usually not limited or clarified. Inevitably, this has given arbitral tribunals significant room for interpretation, and the interpretations adopted by arbitral tribunals have varied from very narrow to very broad, leading to much controversy about the precise meaning of the standard. This lack of clarity has fueled a large number of ISDS claims by investors, some of which have raised concern with regard to the states' right to regulate. In particular, in some cases, the standard has been understood to encompass the protection of the legitimate expectations of investors in a very broad way, including the expectation of a stable general legislative framework.

Certain investment agreements have narrowed down the content of the FET standard by linking it to concepts that are considered to be part of customary international law, such as the minimum standard of treatment that countries must respect in relation to the treatment accorded to foreigners. However, this has also resulted in a wide range of differing arbitral tribunal decisions on what is or is not covered by customary international law, and has not brought the desired greater clarity to the definition of the standard. An issue sometimes linked to the FET standard is the respect by the host country of its legal obligations towards the foreign investors and their investments (sometimes referred to as an "umbrella clause"), e.g. when the host country has entered into a contract with the foreign investor. Investment agreements may have specific provisions to this effect, which have sometimes been interpreted broadly as implying that every breach of e.g. a contractual obligation could constitute a breach of the investment agreement.

EU objectives and approach

The main objective of the EU is to clarify the standard, in particular by incorporating key lessons learned from case-law. This would eliminate uncertainty for both states and investors.

Under this approach, a state could be held responsible for a breach of the fair and equitable treatment obligation only for breaches of a limited set of basic rights, namely: the denial of justice; the disregard of the fundamental principles of due process; manifest arbitrariness; targeted discrimination based on gender, race or religious belief; and abusive treatment, such as coercion, duress or harassment. This list may be extended only where the Parties (the EU and the US) specifically agree to add such elements to the content of the standard, for instance where there is evidence that new elements of the standard have emerged from international law.

The “legitimate expectations” of the investor may be taken into account in the interpretation of the standard. However, this is possible only where clear, specific representations have been made by a Party to the agreement in order to convince the investor to make or maintain the investment and upon which the investor relied, and that were subsequently not respected by that Party. The intention is to make it clear that an investor cannot legitimately expect that the general regulatory and legal regime will not change. Thus the EU intends to ensure that the standard is not understood to be a “stabilisation obligation”, in other words a guarantee that the legislation of the host state will not change in a way that might negatively affect investors. In line with the general objective of clarifying the content of the standard, the EU shall also strive, where necessary, to provide protection to foreign investors in situations in which the host state uses its sovereign powers to avoid contractual obligations towards foreign investors or their investments, without however covering ordinary contractual breaches like the non-payment of an invoice.

Link to reference text

Taking into account the above explanation and the text provided in annex as a reference, what is your opinion of the approach to fair and equitable treatment of investors and their investments in relation to the TTIP?

Introducing a broad basis for protecting the legitimate expectations of an investor adds increased uncertainty and subjectivity to investment arbitrations. Besides, this provision will be extensively interpreted outside domestic courts by tribunals that are not accountable to democratic jurisdictions. The concept of fair and equitable treatment (FET) may also cover administrative due process and the denial of justice by domestic courts, which are crucial to pharmaceutical companies. They are subject to numerous administrative decisions in order to be able to successfully register their IP rights and have their products approved for sale and distribution, and for pricing and reimbursement . As an example, the Apotex case illustrates how a governmental decision on marketing authorisation of generic drug products can be challenged under ISDS. Apotex Inc., a Canadian generic pharmaceutical corporation, has previously alleged that US courts wrongly interpreted federal law, violating NAFTA, based on national treatment. Apotex claimed that it was subject to mistreatment by the US, its agencies (particularly the US Food and Drug Administration) and its federal courts in the course of the company's efforts to bring generic versions of the antidepressant medicine, Zoloft (sertraline), and the anti- cholesterol medicine, Pravachol (pravastatin), to market in that country. Apotex alleged that the FDA accorded more favourable treatment to other US investors and US-owned investments, in that these other investors were not subjected to a measure as severe as the import alert imposed on the Apotex products. The US objected to the jurisdiction of the NAFTA Tribunal on the grounds that, inter alia, for the purposes of NAFTA, Apotex did not qualify as an ‘investor’ that had made an ‘investment’ in the US. Even though the Tribunal ultimately dismissed all the claims and ordered Apotex to pay the legal fees and arbitral expenses of the US, ISDS claims can still be used to challenge routine regulatory decisions. (See above) In addition, the proposed text includes two highly problematic provisions that replicate the flaws in prior pacts. First, the list defining FET includes “manifest arbitrariness” as a qualifying criterion. Meanwhile, it defines other criteria in the list more precisely (e.g., “targeted discrimination on manifestly wrongful grounds, such as gender, race or religious belief”); “manifest arbitrariness” is a more open- ended term that tribunals could interpret widely to rule against domestic measures taken in the public interest. Furthermore, the European Commission’s suggestion to allow tribunals to consider an investor’s “legitimate expectation” threatens to expose EU member countries to investor-state claims made against policy reforms enacted in the public interest. While the proposal ties the consideration of legitimate expectations to instances in which “a Party made a specific representation to an investor to induce a covered investment,” this qualifier is not likely to be sufficient to foreclose the risk to progressive policymaking.

Explanation of the issue

The right to property is a human right, enshrined in the European Convention of Human Rights, in the European Charter of Fundamental Rights as well as in the legal tradition of EU Member States. This right is crucial to investors and investments. Indeed, the greatest risk that investors may incur in a foreign country is the risk of having their investment expropriated without compensation. This is why the guarantees against expropriation are placed at the core of any international investment agreement.

Direct expropriations, which entail the outright seizure of a property right, do not occur often nowadays and usually do not generate controversy in arbitral practice. However, arbitral tribunals are confronted with a much more difficult task when it comes to assessing whether a regulatory measure of a state, which does not entail the direct transfer of the property right, might be considered equivalent to expropriation (indirect expropriation).

Approach in most investment agreements

In investment agreements, expropriations are permitted if they are for a public purpose, non-discriminatory, resulting from the due process of law and are accompanied by prompt and effective compensation. This applies to both direct expropriation (such as nationalisation) and indirect expropriation (a measure having an effect equivalent to expropriation).

Indirect expropriation has been a source of concern in certain cases where regulatory measures taken for legitimate purposes have been subject to investor claims for compensation, on the grounds that such measures were equivalent to expropriation because of their significant negative impact on investment. Most investment agreements do not provide details or guidance in this respect, which has inevitably left arbitral tribunals with significant room for interpretation.

The EU's objectives and approach

The objective of the EU is to clarify the provisions on expropriation and to provide interpretative guidance with regard to indirect expropriation in order to avoid claims against legitimate public policy measures.  The EU wants to make it clear that non-discriminatory measures taken for legitimate public purposes, such as to protect health or the environment, cannot be considered equivalent to an expropriation, unless they are manifestly excessive in light of their purpose. The EU also wants to clarify that the simple fact that a measure has an impact on the economic value of the investment does not justify a claim that an indirect expropriation has occurred.

Link to reference text

Taking into account the above explanation and the text provided in annex as a reference, what is your opinion of the approach to dealing with expropriation in relation to the TTIP? Please explain.

While the definition of direct expropriation has traditionally been relatively clear, the evolving understanding of indirect expropriation leaves significant flexibility for companies to challenge national regulations by using investment treaty provisions. Indirect expropriation can be interpreted to mean regulations and other government actions that reduce the value of a foreign investment. Governments can be required to pay compensation based on the impact of the government measure on the value of the investment regardless of whether the measure is essential to protecting public health. While international arbitration tribunals cannot force a government to repeal regulations, the threat of massive damages awards can have a ‘chilling effect’ on policy-making. We acknowledge the exception to this provision made for measures to protect legitimate public welfare objectives, but have serious concerns that interpretation of this exception and its application will be left to the discretion of three private sector lawyers with general expertise in investment, not public welfare. It would be inappropriate for them to decide what legitimate public welfare objectives are and whether measures are “manifestly excessive”. Thus, they may decide, for instance, that reforming patent law to impose stricter standards of patentability or to allow opposition procedures or to disallow patent term extension will fall outside the scope of a legitimate public policy. Moreover, the definition of legitimate policy and where the burden of proof lies is insufficiently addressed. Furthermore, arbitrators’ rulings are also notoriously inconsistent and unpredictable; therefore, leaving public welfare in their hands poses a real threat. The international tribunals that currently determine investor-state claims lack public accountability, standards, judicial ethics rules and appeals processes. Almost any law or regulatory measure can be considered as ‘indirect expropriation’ when it has the effect of lowering future expected profit. Both the Eli Lilly and Apotex cases illustrate this. Finally, the growing use of ISDS by investors on the grounds of expropriation deters other governments that may consider ambitious regulation in the area of public health protection. If challenged under ISDS, states are forced to spend significant amounts of time and resources defending their regulatory autonomy which can result in the adoption of a wait-and-see approach to public health for fear of resource-draining litigation.

Explanation of the issue

In democratic societies, the right to regulate of states is subject to principles and rules contained in both domestic legislation and in international law. For instance, in the European Convention on Human Rights, the Contracting States commit themselves to guarantee a number of civil and political rights. In the EU, the Constitutions of the Member States, as well as EU law, ensure that the actions of the state cannot go against fundamental rights of the citizens. Hence, public regulation must be based on a legitimate purpose and be necessary in a democratic society.

Investment agreements reflect this perspective. Nevertheless, wherever such agreements contain provisions that appear to be very broad or ambiguous, there is always a risk that the arbitral tribunals interpret them in a manner which may be perceived as a threat to the state's right to regulate. In the end, the decisions of arbitral tribunals are only as good as the provisions that they have to interpret and apply.

 Approach in most investment agreements

Most agreements that are focused on investment protection are silent about how public policy issues, such as public health, environmental protection, consumer protection or prudential regulation, might interact with investment. Consequently, the relationship between the protection of investments and the right to regulate in such areas, as envisaged by the contracting Parties to such agreements is not clear and this creates uncertainty.

In more recent agreements, however, this concern is increasingly addressed through, on the one hand, clarification of the key investment protection provisions that have proved to be controversial in the past and, on the other hand, carefully drafted exceptions to certain commitments. In complex agreements such as free trade agreements with provisions on investment, or regional integration agreements, the inclusion of such safeguards is the usual practice.

The EU's objectives and approach

The objective of the EU is to achieve a solid balance between the protection of investors and the Parties' right to regulate.

First of all, the EU wants to make sure that the Parties' right to regulate is confirmed as a basic underlying principle. This is important, as arbitral tribunals will have to take this principle into account when assessing any dispute settlement case.

Secondly, the EU will introduce clear and innovative provisions with regard to investment protection standards that have raised concern in the past (for instance, the standard of fair and equitable treatment is defined based on a closed list of basic rights; the annex on expropriation clarifies that non-discriminatory measures for legitimate public policy objectives do not constitute indirect expropriation). These improvements will ensure that investment protection standards cannot be interpreted by arbitral tribunals in a way that is detrimental to the right to regulate.

Third, the EU will ensure that all the necessary safeguards and exceptions are in place. For instance, foreign investors should be able to establish in the EU only under the terms and conditions defined by the EU. A list of horizontal exceptions will apply to non-discrimination obligations, in relation to measures such as those taken in the field of environmental protection, consumer protection or health (see question 2 for details). Additional carve-outs would apply to the audiovisual sector and the granting of subsidies. Decisions on competition matters will not be subject to investor-to-state dispute settlement (ISDS). Furthermore, in line with other EU agreements, nothing in the agreement would prevent a Party from taking measures for prudential reasons, including measures for the protection of depositors or measures to ensure the integrity and stability of its financial system. In addition, EU agreements contain general exceptions applying in situations of crisis, such as in circumstances of serious difficulties for the operation of the exchange rate policy or monetary policy, balance of payments or external financial difficulties, or threat thereof.

In terms of the procedural aspects relating to ISDS, the objective of the EU is to build a system capable of adapting to the states' right to regulate. Wherever greater clarity and precision proves necessary in order to protect the right to regulate, the Parties will have the possibility to adopt interpretations of the investment protection provisions which will be binding on arbitral tribunals.  This will allow the Parties to oversee how the agreement is interpreted in practice and, where necessary, to influence the interpretation.

The procedural improvements proposed by the EU will also make it clear that an arbitral tribunal will not be able to order the repeal of a measure, but only compensation for the investor.

Furthermore, frivolous claims will be prevented and investors who bring claims unsuccessfully will pay the costs of the government concerned (see question 9).

Link to reference text

Taking into account the above explanation and the text provided in annex as a reference, what is your opinion with regard to the way the right to regulate is dealt with in the EU's approach to TTIP?

The “right to regulate” is a basic attribute of sovereignty under international law. It is specifically designed to protect public interest ahead of other interests. TTIP and ISDS provisions should not, in any way, directly or indirectly, restrict the right to regulate. It is the inherent right of the state and not a right granted in the agreement. ISDS procedures are time-consuming, complex and expensive, even if a state wins a case. Whenever any public health-related proposal is made in the future, multinational companies will be able to threaten to file a complaint under ISDS. Making this possible could have a chilling effect that will prevent measures from being proposed and would generate a strong lobbying tool for multinationals to intimidate democratically-elected lawmakers to legislate in the interests of companies instead of citizens. The preamble, which is non-binding, limits the right to regulate to “legitimate” objectives. This is an unacceptable limitation. The agreement should include a substantive paragraph that restates the inherent right to regulate. A vague term such as ‘legitimate objectives’ to define exceptions to this right creates legal uncertainty and is unacceptable. To date, EU Member States have exclusive competence to determine and negotiate the price and extent of reimbursement of (new) medicines. The organisation of their health system is, in fact, a national prerogative and the subsidiarity principle applies. Member States can use their competence to negotiate a price and design a reimbursement scheme and procurement practices that best meet their citizens’ public health needs. For example, they can use this competence to impose price cuts and/or fixed price and reimbursement decisions based on the added therapeutic value of the new drugs compared to existing medicines in the market. Governments also have the right to increase transparency of medicines safety and efficacy data. Under the new clinical trials regulation, clinical study reports submitted for marketing authorisation to drug regulatory agencies must be made publicly available. Despite the many benefits to public health that clinical trial data transparency brings, the pharmaceutical industry keeps claiming that this information is commercially confidential and cannot publicly disclosed. Taking into account industry’s position, governments will most likely end up being challenged under ISDS for their decision to disclose this information. In fact, the European Medicines Agency has already been sued for this very same reason.

B. Investor-to-State dispute settlement (ISDS)

Explanation of the issue

In most ISDS cases, no or little information is made available to the public, hearings are not open and third parties are not allowed to intervene in the proceedings. This makes it difficult for the public to know the basic facts and to evaluate the claims being brought by either side.

This lack of openness has given rise to concern and confusion with regard to the causes and potential outcomes of ISDS disputes. Transparency is essential to ensure the legitimacy and accountability of the system. It enables stakeholders interested in a dispute to be informed and contribute to the proceedings. It fosters accountability in arbitrators, as their decisions are open to scrutiny. It contributes to consistency and predictability as it helps create a body of cases and information that can be relied on by investors, stakeholders, states and ISDS tribunals.

Approach in most existing investment agreements

Under the rules that apply in most existing agreements, both the responding state and the investor need to agree to permit the publication of submissions. If either the investor or the responding state does not agree to publication, documents cannot be made public. As a result, most ISDS cases take place behind closed doors and no or a limited number of documents are made available to the public.

The EU’s objectives and approach 

The EU's aim is to ensure transparency and openness in the ISDS system under TTIP. The EU will include provisions to guarantee that hearings are open and that all documents are available to the public. In ISDS cases brought under TTIP, all documents will be publicly available (subject only to the protection of confidential information and business secrets) and hearings will be open to the public. Interested parties from civil society will be able to file submissions to make their views and arguments known to the ISDS tribunal. 

The EU took a leading role in establishing new United Nations rules on transparency[1] in ISDS. The objective of transparency will be achieved by incorporating these rules into TTIP.

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Taking into account the above explanation and the text provided in annex as a reference, please provide your views on whether this approach contributes to the objective of the EU to increase transparency and openness in the ISDS system for TTIP. Please indicate any additional suggestions you may have.

No comment, see general statement

Explanation of the issue

Investors who consider that they have grounds to complain about action taken by the authorities (e.g. discrimination or lack of compensation after expropriation) often have different options. They may be able to go to domestic courts and seek redress there. They or any related companies may be able to go to other international tribunals under other international investment treaties.

It is often the case that protection offered in investment agreements cannot be invoked before domestic courts and the applicable legal rules are different. For example, discrimination in favour of local companies is not prohibited under US law but is prohibited in investment agreements. There are also concerns that, in some cases domestic courts may favour the local government over the foreign investor e.g. when assessing a claim for compensation for expropriation or may deny due process rights such as the effective possibility to appeal. Governments may have immunity from being sued. In addition, the remedies are often different. In some cases government measures can be reversed by domestic courts, for example if they are illegal or unconstitutional. ISDS tribunals cannot order governments to reverse measures.

These different possibilities raise important and complex issues. It is important to make sure that a government does not pay more than the correct compensation. It is also important to ensure consistency between rulings.

Approach in most existing investment agreements

Existing investment agreements generally do not regulate or address the relationship with domestic courts or other ISDS tribunals. Some agreements require that the investor choses between domestic courts and ISDS tribunals. This is often referred to as "fork in the road" clause.

The EU’s objectives and approach

As a matter of principle, the EU’s approach favours domestic courts. The EU aims to provide incentives for investors to pursue claims in domestic courts or to seek amicable solutions – such as mediation. The EU will suggest different instruments to do this. One is to prolong the relevant time limits if an investor goes to domestic courts or mediation on the same matter, so as not to discourage an investor from pursuing these avenues.  Another important element is to make sure that investors cannot bring claims on the same matter at the same time in front of an ISDS tribunal and domestic courts. The EU will also ensure that companies affiliated with the investor cannot bring claims in front of an ISDS tribunal and domestic courts on the same matter and at the same time. If there are other relevant or related cases, ISDS tribunals must take these into account. This is done to avoid any risk that the investor is over-compensated and helps to ensure consistency by excluding the possibility for parallel claims.

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Taking into account the above explanation and the text provided in annex as a reference, please provide your views on the effectiveness of this approach for balancing access to ISDS with possible recourse to domestic courts and for avoiding conflicts between domestic remedies and ISDS in relation to the TTIP. Please indicate any further steps that can be taken. Please provide comments on the usefulness of mediation as a means to settle disputes.

No comment, see general statement

Explanation of the issue

There is concern that arbitrators on ISDS tribunals do not always act in an independent and impartial manner. Because the individuals in question may not only act as arbitrators, but also as lawyers for companies or governments, concerns have been expressed as to potential bias or conflicts of interest.

Some have also expressed concerns about the qualifications of arbitrators and that they may not have the necessary qualifications on matters of public interest or on matters that require a balancing between investment protection and e.g. environment, health or consumer protection.

Approach in existing investment agreements

  Most existing investment agreements do not address the issue of the conduct or behaviour of arbitrators. International rules on arbitration address the issue by allowing the responding government or the investor to challenge the choice of arbitrator because of concerns of suitability.

Most agreements allow the investor and the responding state to select arbitrators but do not establish rules on the qualifications or a list of approved, qualified arbitrators to draw from.

  The EU’s objective and approach

The EU aims to establish clear rules to ensure that arbitrators are independent and act ethically. The EU will introduce specific requirements in the TTIP on the ethical conduct of arbitrators, including a code of conduct. This code of conduct will be binding on arbitrators in ISDS tribunals set up under TTIP.  The code of conduct also establishes procedures to identify and deal with any conflicts of interest.  Failure to abide by these ethical rules will result in the removal of the arbitrator from the tribunal. For example, if a responding state considers that the arbitrator chosen by the investor does not have the necessary qualifications or that he has a conflict of interest, the responding state can challenge the appointment. If the arbitrator is in breach of the Code of Conduct, he/she will be removed from the tribunal. In case the ISDS tribunal has already rendered its award and a breach of the code of conduct is found, the responding state or the investor can request a reversal of that ISDS finding.

In the text provided as reference (the draft EU-Canada Agreement), the Parties (i.e. the EU and Canada) have agreed for the first time in an investment agreement to include rules on the conduct of arbitrators, and have included the possibility to improve them further if necessary. In the context of TTIP these would be directly included in the agreement.

As regards the qualifications of ISDS arbitrators, the EU aims to set down detailed requirements for the arbitrators who act in ISDS tribunals under TTIP. They must be independent and impartial, with expertise in international law and international investment law and, if possible, experience in international trade law and international dispute resolution. Among those best qualified and who have undertaken such tasks will be retired judges, who generally have experience in ruling on issues that touch upon both trade and investment and on societal and public policy issues. The EU also aims to set up a roster, i.e. a list of qualified individuals from which the Chairperson for the ISDS tribunal is drawn, if the investor or the responding state cannot otherwise agree to a Chairperson. The purpose of such a roster is to ensure that the EU and the US have agreed to and vetted the arbitrators to ensure their abilities and independence.  In this way the responding state chooses one arbitrator and has vetted the third arbitrator.

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Taking into account the above explanation and the text provided in annex as a reference, please provide your views on these procedures and in particular on the Code of Conduct and the requirements for the qualifications for arbitrators in relation to the TTIP agreement. Do they improve the existing system and can further improvements be envisaged?

No comment, see general statement

Explanation of the issue

As in all legal systems, cases are brought that have little or no chance of succeeding (so-called “frivolous claims”). Despite eventually being rejected by the tribunals, such cases take up time and money for the responding state. There have been concerns that protracted and frequent litigation in ISDS could have an effect on the policy choices made by states. This is why it is important to ensure that there are mechanisms in place to weed out frivolous disputes as early as possible.

Another issue is the cost of ISDS proceedings. In many ISDS cases, even if the responding state is successful in defending its measures in front of the ISDS tribunal, it may have to pay substantial amounts to cover its own defence.

Approach in most existing investment agreements:

Under existing investment agreements, there are generally no rules dealing with frivolous claims. Some arbitration rules however do have provisions on frivolous claims. As a result, there is a risk that frivolous or clearly unfounded claims are allowed to proceed. Even though the investor would lose such claims, the long proceedings and the implied questions surrounding policy can be problematic.

The issue of who bears the cost is also not addressed in most existing investment agreements. Some international arbitration rules have provisions that address the issue of costs in very general terms. In practice, ISDS tribunals have often decided that the investor and responding state pay their own legal costs, regardless of who wins or loses.

The EU’s objectives and approach

The EU will introduce several instruments in TTIP to quickly dismiss frivolous claims.

ISDS tribunals will be required to dismiss claims that are obviously without legal merit or legally unfounded. For example, this would be cases where the investor is not established in the US or the EU, or cases where the ISDS tribunal can quickly establish that there is in fact no discrimination between domestic and foreign investors. This provides an early and effective filtering mechanism for frivolous claims thereby avoiding a lengthy litigation process.

To further discourage unfounded claims, the EU is proposing that the losing party should bear all costs of the proceedings. So if investors take a chance at bringing certain claims and fail, they have to pay the full financial costs of this attempt.

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Taking into account the above explanation and the text provided in annex as a reference, please provide your views on these mechanisms for the avoidance of frivolous or unfounded claims and the removal of incentives in relation to the TTIP agreement. Please also indicate any other means to limit frivolous or unfounded claims.

No comment, see general statement

Explanation of the issue

Recently, concerns have been expressed in relation to several ISDS claims brought by investors under existing investment agreements, relating to measures taken by states affecting the financial sector, notably those taken in times of crisis in order to protect consumers or to maintain the stability and integrity of the financial system.

To address these concerns, some investment agreements have introduced mechanisms which grant the regulators of the Parties to the agreement the possibility to intervene (through a so-called “filter” to ISDS) in particular ISDS cases that involve measures ostensibly taken for prudential reasons. The mechanism enables the Parties to decide whether a measure is indeed taken for prudential reasons, and thus if the impact on the investor concerned is justified. On this basis, the Parties may therefore agree that a claim should not proceed.

Approach in most existing investment agreements

The majority of existing investment agreements privilege the original intention of such agreements, which was to avoid the politicisation of disputes, and therefore do not contain provisions or mechanisms which allow the Parties the possibility to intervene under particular circumstances in ISDS cases.

The EU’s objectives and approach

The EU like many other states considers it important to protect the right to regulate in the financial sector and, more broadly, the overriding need to maintain the overall stability and integrity of the financial system, while also recognizing the speed needed for government action in case of financial crisis.

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Some investment agreements include filter mechanisms whereby the Parties to the agreement (here the EU and the US) may intervene in ISDS cases where an investor seeks to challenge measures adopted pursuant to prudential rules for financial stability. In such cases the Parties may decide jointly that a claim should not proceed any further. Taking into account the above explanation and the text provided in annex as a reference, what are your views on the use and scope of such filter mechanisms in the TTIP agreement?

No comment, see general statement

Explanation of the Issue

When countries negotiate an agreement, they have a common understanding of what they want the agreement to mean. However, there is a risk that any tribunal, including ISDS tribunals interprets the agreement in a different way, upsetting the balance that the countries in question had achieved in negotiations – for example, between investment protection and the right to regulate. This is the case if the agreement leaves room for interpretation. It is therefore necessary to have mechanisms which will allow the Parties (the EU and the US) to clarify their intentions on how the agreement should be interpreted.

Approach in existing investment agreements

Most existing investment agreements do not permit the countries who signed the agreement in question to take part in proceedings nor to give directions to the ISDS tribunal on issues of interpretation.

The EU’s objectives and approach 

The EU will make it possible for the non-disputing Party (i.e. the EU or the US) to intervene in ISDS proceedings between an investor and the other Party. This means that in each case, the Parties can explain to the arbitrators and to the Appellate Body how they would want the relevant provisions to be interpreted.  Where both Parties agree on the interpretation, such interpretation is a very powerful statement, which ISDS tribunals would have to respect.

The EU would also provide for the Parties (i.e. the EU and the US) to adopt binding interpretations on issues of law, so as to correct or avoid interpretations by tribunals which might be considered to be against the common intentions of the EU and the US. Given the EU’s intention to give clarity and precision to the investment protection obligations of the agreement, the scope for undesirable interpretations by ISDS tribunals is very limited. However, this provision is an additional safety-valve for the Parties.

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Taking into account the above explanation and the text provided in annex as a reference, please provide your views on this approach to ensure uniformity and predictability in the interpretation of the agreement to correct the balance? Are these elements desirable, and if so, do you consider them to be sufficient?

No comment, see general statement

Explanation of the issue

In existing investment agreements, the decision by an ISDS tribunal is final. There is no possibility for the responding state, for example, to appeal to a higher instance to challenge the level of compensation or other aspects of the ISDS decision except on very limited procedural grounds. There are concerns that this can lead to different or even contradictory interpretations of the provisions of international investment agreements. There have been calls by stakeholders for a mechanism to allow for appeal to increase legitimacy of the system and to ensure uniformity of interpretation.

  

Approach in most existing investment agreements

No existing international investment agreements provide for an appeal on legal issues. International arbitration rules allow for annulment of ISDS rulings under certain very restrictive conditions relating to procedural issues. 

The EU’s objectives and approach 

The EU aims to establish an appellate mechanism in TTIP so as to allow for review of ISDS rulings. It will help ensure consistency in the interpretation of TTIP and provide both the government and the investor with the opportunity to appeal against awards and to correct errors. This legal review is an additional check on the work of the arbitrators who have examined the case in the first place.

In agreements under negotiation by the EU, the possibility of creating an appellate mechanism in the future is envisaged. However, in TTIP the EU intends to go further and create a bilateral appellate mechanism immediately through the agreement.

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Question 12. Taking into account the above explanation and the text provided in annex as a reference, please provide your views on the creation of an appellate mechanism in TTIP as a means to ensure uniformity and predictability in the interpretation of the agreement.

No comment, see general statement

C. General assessment

General assessment
  • What is your overall assessment of the proposed approach on substantive standards of protection and ISDS as a basis for investment negotiations between the EU and US?
  • Do you see other ways for the EU to improve the investment system?
  • Are there any other issues related to the topics covered by the questionnaire that you would like to address?

Health Action International (HAI) Europe, the Commons Network, Knowledge Ecology International (KEI) Europe, Health GAP (Global Access Project), Salud por Derecho, the International Society of Drug Bulletins (ISDB), the Medicines in Europe Forum (MiEF) and Universities Allied for Essential Medicines (UAEM) welcome the opportunity to submit a response to this consultation. We believe, however, that this consultation, which aims to improve ISDS, is asking the wrong questions. ISDS cannot be improved. The real question is whether ISDS should be included in TTIP at all. The answer, very simply, is no. Our key concern is that ISDS will have a negative impact on public health, especially for long-term, sustainable access to medicines in Europe and, in turn, low-and middle-income countries. By default, the inclusion of ISDS in TTIP will set a new global standard for other trade agreements. Despite our view that this flawed consultation is not asking the right questions, we offer commentary on several sections to illustrate the problems that ISDS presents for public health and demonstrate that the proposed adjustments do not adequately address these concerns. Moreover, this consultation does not eliminate our concerns about TTIP, in general, and the undemocratic nature by which this agreement is being developed and negotiated. We think that ISDS is neither needed, nor justified, in TTIP. According to the European Commission’s definition, ISDS is a procedural mechanism in international agreements on investment that allow an investor from one country to bring a case directly against the country in which they have invested before an arbitration tribunal. ISDS therefore allows companies to challenge legislative and administrative measures—even judicial decisions taken by EU Member States to safeguard public health and other public interest concerns. By using ISDS, companies are allowed to seek compensation for the benefits that they cannot make due to these public interest protection measures. In short, companies can ask to receive financial compensation because of anticipated harms to speculative expectations to future profits. ISDS fundamentally changes the power balance between companies and states. The ISDS mechanism elevates companies and investors to a higher legal standing than states, since states are not permitted to take investors to arbitration. In contrast, foreign investors may challenge states before private arbiters. Moreover, the system does not allow a judicial oversight since decisions on the interpretation of ISDS and potential conflicting principles of law are taken by three arbitrators outside the judicial system. This process is especially threatening for the democratic legal system as there is no prospect of judicial review by an independent court since decisions are final and binding on countries. In short, ISDS fundamentally changes the power balance between companies and states. The dynamics of ISDS create pressure on policy space and human rights, and there is a serious risk of a one-sided decision-making process that leads to inequitable outcomes with no legislative feedback loop, leaving the system without corrective, majoritarian input. We therefore strongly oppose the position that ISDS should be part of TTIP, or any other trade agreement, as have numerous multi-sectorial stakeholders from around the world, including trade unions and academics. We also request the exclusion of vague concepts such as ‘expectation of gain or profit’ and ‘the assumption of risks’ from the scope of the definition. Furthermore, the EU and US have well-developed administrative and judicial systems and there is no evidence of systemic deficiencies in either system that would justify the need for ISDS. Moreover, international commitments by the US to EU investors can be enforced in US courts and even confer a right of action to individuals . In addition, academic evidence suggests that the inclusion of ISDS would, on balance, not be advantageous for the EU . There is indeed significant potential for harm in allowing foreign investors to bypass domestic courts, including their appeal systems, and in allowing them to assert rights and seek remedies beyond those allowed in national law, including those enshrined in national constitutions. Treaty-based arbitration rights extend rights to foreign investors well beyond the rights of competing domestic investors . According to a study from the London School of Economics, “The content of international investment law remains contested and uncertain, and it is possible that an ISDS tribunal formed under an EU-US investment chapter would grant a US investor significant damages for conduct that would normally be actionable under domestic law.” At the European level, the European Parliament has passed a resolution calling for reforms to the investment dispute settlement process, including a requirement that foreign investors exhaust domestic legal remedies before bringing an investor-state claim. This recommendation, however, is not in the Commission’s proposal. Lessons should be learned from experience in third countries. Numerous EU and third countries, including Germany, France, Indonesia, Australia, Japan, South Africa, Brazil, as well as many countries in South America, have already expressed their opposition to ISDS . These objections are based on experience gained about the use of this mechanism by companies that have been particularly detrimental in the field of public health. Several countries, such as Bolivia, Ecuador, Venezuela and South Africa, have gone so far as to withdraw from existing ISDS investment agreements. Including ISDS in TTIP is unnecessary and unjustified. Its clauses pose an enormous risk to public health objectives and, in particular, to ensuring access to affordable medicines. ISDS can, in fact: - Force the development of an unnecessary and potentially abusive arbitration system lacking democratic control when well-developed legal and court systems already exist in both the EU and US. - Further strengthen the level of IP protection enjoyed by the pharmaceutical industry by providing a means for them to challenge EU Member States’ or regulatory bodies’ use of legitimate TRIPS flexibilities (e.g., patent reform, compulsory licensing). - Provide the pharmaceutical industry with a means to challenge EU Member States’ marketing authorisation, pricing and reimbursement and procurement policies. This will jeopardise the freedom of Member States to tailor these policies to ensure long-term, sustainable access to affordable medicines for their citizens. - Potentially lose public policy space that governments need for addressing increasing domestic and global health threats. - Have a chilling effect on the possibility of adopting measures necessary to protect public health and ensure affordable access to medicines without fearing costly legal battles. We therefore strongly oppose the inclusion of ISDS provisions in the TTIP and urge the European Commission to refrain from leading the EU down this dangerous path, which will jeopardise public health. We also request that IP be completely excluded from the definition of ‘investment’ in TTIP and any trade agreement.