Samenvatting

The European Union (EU) and the United States of America (US) are currently negotiating the Transatlantic Trade
and Investment Partnership (TTIP). TTIP was launched in 2013. TTIP aims at developing trade rules under
investment protection that encompasses arbitration as the method to resolve disputes that may arise between foreign
investors and host state governments. The EU and US have a preference for including the investor-to-state dispute
settlement (ISDS) mechanism as the procedural rules that govern the arbitration proceedings.
This research deals with the intersection of investment law and human rights. The focus of this research is to
examine and to predict how the ISDS mechanism in the TTIP agreement is going to impact the protection of human
rights in the EU. This thesis aims to answer this research question from a political science perspective, through the
conduct of qualitative desk research.
The literature review provides a critical background to the key topics. With regard to the definitions, the term ISDS
will be used as referring to the investor-state arbitration process, and decisions issued through it. ISDS relates to the
nature of protection to individual foreign investors and their right to sue host state governments before international
arbitration tribunals, outside of domestic courts, for the alleged breach of an investor’s rights under an investment
treaty due to a governmental action. In addition, ISDS relates to the right of private arbitrators to adjudicate disputes
through reviewing governmental actions. Turning to human rights protection, a broad concept of human rights is
utilized. This consists of civil, political, economic, social and cultural rights. In this literature review, the key
concept human rights protection relates to legislative areas of social and environmental laws that protect such rights.
It is used as a surrogate for the notion of states’ human rights duties imposing a positive duty on states to legislate in
order to implement domestic laws and to enforce legislation to safeguard human rights. This relates to what has been
described in this literature review as the right of host state governments to regulate. The next part in this literature
review, “Connection between Human Rights Protection and ISDS” points out that over the years, human rights
issues have been progressively the subject of numerous ISDS cases and investor against state claims are often based
on state decisions, new laws or policy changes that involve matters of vital importance to the public and the state.
This research aimed to gather evidence that would either support or dismiss the claim that an ISDS clause in
international investment agreements (IIAs) places obstacles in the way of achieving human rights protection in a
country by hindering positive rights of host state governments to apply dynamic human rights legislation.
This research produced a number of key findings. Firstly, it was discovered that the commonly accepted principles
of treatment for foreign investors in IIAs do not directly obstruct government’s right to regulate; and the arbitration
tribunals’ verdicts issued through the ISDS process cannot force a government to repeal or change the measures
taken in the public interest. Secondly, it was found that to date investment law and arbitration show inconsistent and
unpredictable tendencies. Thirdly, it became apparent that the enforceable rights the ISDS creates for foreign
investors impinges upon the sovereign state’s decision-making power to produce laws and decisions in the public
interest. Under ISDS, governments face the risk of reduced policymaking space through the threat of arbitration and
its legal costs and compensation awards.
This dissertation came to the conclusion that the inclusion of ISDS in TTIP will likely result to have a negative
impact on the protection of human rights in the EU, as under ISDS, EU Member States governments face the risk of
reduced policy space due to the fear of expensive ISDS proceedings or the actual cost of compensation awards to
foreign investors in ISDS verdicts. This study suggest to exempt ISDS from TTIP negotiations given the
uncertainties surrounding the ISDS system in its current form. In case ISDS will continue to be included in TTIP,
this study suggests to specify investment protection provisions; to mention human rights concerns and public policy
objectives of states as substantial treaty provisions as to narrow interpretation and discretion of arbitration tribunals
in relation to the claims submitted to arbitration tribunals.