A York University law professor’s recommendations are the first step toward ensuring any multilateral agreement coming out of the Paris climate change negotiations will block oil companies from filing investor-state dispute resolution (ISDS) lawsuits.
Gus Van Harten
Gus Van Harten of Osgoode Hall Law School proposed specific wording to safeguard against ISDS lawsuits by oil companies in his paper, “An ISDS Carve-Out to Support Action on Climate Change”. The European Parliament has used his recommendations to develop its formal position on ISDS lawsuits targeting climate change action by governments.
The resolution passed by the European Parliament calls on the European Commission and member states to ensure that any climate change measure adopted as part of the Paris Agreement (Nov. 30 to Dec. 11) includes wording that precludes investor-state dispute settlement.
“The European Parliament has acted responsibly and proactively to address the risks posed by investor-state dispute settlement to climate change action,” says Van Harten.
The resolution would apply to any measure adopted by a party to the Paris Agreement and relating to efforts to stabilize greenhouse gas emissions.
“Considering the urgency of such action, concerns about the protection of foreign-owned fossil fuel reserves are more appropriately addressed in state-to-state adjudication and the courts, not a lopsided and costly process of foreign investor claims against countries that is based on generous entitlements to public compensation without any actionable responsibilities for major resource companies," says Van Harten.
The wording of the proposed carve-out is intended to be broad enough to cover anticipated and unanticipated state measures, and still avoid squelching regulatory innovation.
Next steps include ensuring the European Commission brings the issue resolution to the international Paris negotiations on climate change, he says.
The paper was published as an Osgoode Hall Law School working paper on the Social Science Research Network.