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open precautionary principle

  • In the EU the precautionary principle is in force. Firms must prove the security measures of their products before putting them on the market. Should the proof not be scientifically effective, such products are banned.
  • In the USA the scientific principle is in force. Any product can be put on the market and only after the scientific consensus of it being harmful can it be withdrawn. Naturally it is the public administration which must prove it with enormous costs and the numerous technical and scientific apparatus it needs to deal with and check one by one the thousands of new substances produced every year.

With a recent Law concerning GMO, the EU transferred to each single nation the choice whether to admit or not each GMO. What may seem a democratic principle actually sets the multinational companies not anymore to face the EU but the single nations which do not always have the technical and scientific apparatus and the necessary resources to study all the GMOs on the market. In absence of the precautionary principle, this "devolution" would allow the multinational companies to be the absolute owners of our health.

See on Wikipedia the definition of precautionary principle.

open umbrella clause

Practical LAW di Thomson Reuters defines the Umbrella clause as follows:

In the context of a bilateral investment treaty (BIT), a clause that obliges the host state to observe speci fic undertakings towards its foreign investors. An umbrella clause protects investments by bringing obligations or commitments that the host state entered into in connection wi th a foreign investment under the protective "umbrella" of the BIT. Investors often rely on an umbrella clause as a catch-all provision to pursue claims when a host state's act ions do not otherwise breach the BIT. Umbrella clauses are usually broadly written to cover every conceivable obligation of the host state.

Practically speaking, an umb rella clause can elevate a contract claim to the level of a treaty claim. Usually, violating a contract does not invoke treaty protection under international law. However, addi ng an umbrella clause to a BIT:

  • Effectively circumvents that customary restriction by expressly stating that a violation of an investment contract is deemed a vio lation of the BIT.

  • Removes the need for investors to rely on the dispute resolution clauses in an investment contract (which may, for example, give exclusive jur isdiction to local courts).

  • Allows an investor to bring the claim before an international arbitral body, such as the International Centre for Settlement of Investment Disputes (ICSID). Investors typically prefer ICSID awards over court-ordered awards, as the host state is more likely to comply with an ICSID award. This is true because ICSID is part of the World Bank Group, and the host state’s fail ure to comply with the award may jeopardize the state’s access to World Bank funding or international credit in general.

For more information, see Practice Notes, Umbrella Clauses and Investment treaty arbitration: legal issues: Umbrella clauses.