Luke Eric Peterson
Chapter 2: Exploring the Relationship between Human Rights and Investment Treaties
Human rights and international law
Even as an architecture of treaties has been developed to protect foreign investment, a separate series of international treaties have been concluded in response to the mandate set out in the Charter of the United Nations.36 The Charter empowered the UN to promote “higher standards of living, full employment, and conditions of economic and social progress and development”, as well as “universal respect for, and observance of, human rights and fundamental freedoms for all without distinction as to race, sex, language, or religion.” Indeed, the Charter obliges UN member-states to “take joint and separate action” in cooperation with the UN to promote human rights.
As in the realm of foreign investment law, not all legal obligations are treaty-based; some are rooted in customary international law which is premised upon the long-standing practice of states and whose strictures bind all states regardless of their consent. As Robert Howse and Makau Mutua observe:
The scope and content of the customary international law of human rights, as indeed of all customary law is a work in progress. While there are certain human rights whose status as custom is generally agreed upon, that list is not necessarily complete or closed. But it is clear from existent international law that a “state violates international law if, as a matter of state policy, it practices, encourages or condones” the following conduct: genocide; slavery or slave trade; the murder or causing the disappearance of individuals; detention; systematic racial discrimination such as apartheid; and consistent patterns of gross violations of internationally recognized human rights.37
Supplementing these customary obligations are a growing array of human rights treaties, many of which have been negotiated under the auspices of the UN—such as the International Covenants on Civil and Political Rights and on Economic, Social and Cultural Rights—while others are strictly regional conventions such as those developed in Europe, America and Africa. This extensive (and growing) catalogue of treaties concluded by governments, overlays the customary obligations described above so as to impose significant and meaningful obligations for governments in the area of human rights.
Given that governments have extensive binding international human rights obligations, as well as the above-described obligations to foreign investors, are there instances where the two sets of obligations interact with one another? The next sections explore this question by looking at the legal disputes known to have arisen between foreign investors and host governments under investment treaties.
Is human rights law being raised in investment treaty lawsuits?
Generally speaking, arbitrators in investment treaty disputes are not empowered to find that human rights obligations have been breached. As tribunals with limited jurisdiction, arbitrators are usually limited to determining whether a particular investment treaty protection has been breached. However, this does not mean that human rights law might not form part of the backdrop against which investment treaty obligations are read and applied. It has long been recognized that the law applicable to investment arbitrations typically encompasses international law (rather than simply the given investment protection treaty), and that this could include other non-economic forms of international law.38
Indeed, as far back as the 1980s, an investment arbitration tribunal acknowledged that obligations imposed by other international treaties ratified by a host state may be relevant in defending its treatment of a given foreign investor. In the case in question, SPP v. Egypt, a panel of ICSID arbitrators took seriously the argument that a host state might be bound by certain obligations flowing from the UN Educational, Scientific and Cultural Organization (UNESCO) Convention concerning the Protection of the World Cultural and Natural Heritage.39 On the facts of the case, the accession by Egypt to the UNESCO Convention did not excuse its cancellation of an investment contract that had been earlier issued for the construction of a tourist development adjacent to a cultural site. However, arbitrators did view the Convention as having relevance to the dispute. In particular, the arbitrators declined to award future lost profits to the investors on the reasoning that they could not be compensated for activities which would be in violation of international law once the UNESCO Convention came into force for Egypt and was applied to the project site in question.40 More recently, various other cases have been identified wherein non-investment forms of international law (be they environmental or cultural) have been recognized by tribunals as relevant to the resolution of alleged breaches by a state of its investment obligations.41
“Turning to the body of disputes which have been submitted to arbitration under investment treaties, it becomes clear that human rights law has in fact, already been raised in a number of instances. However, there appear to be two distinct scenarios.”
Under the international rules of treaty interpretation, as spelled out in Article 31.3 (c) of the Vienna Convention on the Law of Treaties, arbitrators may interpret treaty obligations in the light of “relevant rules of international law applicable in the relations between the parties.” Even if arbitrators have not tended to rely on this particular Article, it is abundantly clear that they may do so.42 Of course, arguments will arise as to what rules of international law are relevant in a given context. While jus cogens norms against slavery or racial discrimination or the human rights obligations contained in the UN Charter will be relatively uncontroversial, views differ as to other international law norms, such as those contained in human rights treaties. Nevertheless, a wide path is open for arbitrators to consider human rights and other international law obligations of states in the course of interpreting the obligations contained in investment protection treaties.
Turning to the body of disputes which have been submitted to arbitration under investment treaties, it becomes clear that human rights law has in fact, already been raised in a number of instances. However, there appear to be two distinct scenarios. First, there are instances where human rights obligations owing to business actors (the right to property or due process) are used to help define the investment treaty protections owed to investors. Second, there is an emerging trend whereby human rights obligations owed by the host state to non-parties to the arbitration proceeding (individuals or groups under the state’s jurisdiction) are coming into the picture. Recently, governments and sometimes non-governmental organizations, have referred to these human rights obligations in an effort to justify or defend certain government actions or measures that may have had negative impacts on foreign investors.
Human rights analogies used to define protections owed to investors
While most investment treaties are silent on human rights, this does not mean that human rights issues are irrelevant to disputes that arise between investors and their host governments. Indeed, there are several ways in which human rights may be relevant to investment treaty disputes between governments. A review of known investment treaty arbitrations undertaken as part of this research paper found that human rights have come up in a small number of investment treaty arbitrations, at least on the basis of publicly-available information. These examples are typically the final rulings (or awards) rather than the legal pleadings which are generally not public. Some examples are profiled in this section.
More often, at least to date, these instances where human rights law arises in investment treaty arbitrations are those where such legal obligations are invoked on behalf of the investor or used by arbitrators to help elucidate BIT obligations. While this may come as a surprise to some observers, it is the case that corporations and individual business persons may be entitled to certain human rights protections.43 Whereas individuals may enjoy protections under the whole gamut of regional and international human rights treaties, corporations also enjoy some human rights protections, at least under the European Convention on Human Rights. Indeed, in light of this reality, investors (both corporate and individual businesspersons) sometimes mount human rights claims before the European Court of Human Rights in lieu of, or in addition to, investment treaty claims initiated against a host government.44
Thus, perhaps not surprisingly, in several investment treaty arbitrations between foreign investors and their host governments, arbitrators (and/or counsel for investors) have referred to human rights jurisprudence in the course of interpreting and applying the protections owed to investors under investment treaties. Typically this has been done without much theoretical explanation for the resort to human rights jurisprudence; rather, as occurred in the Mondev v. United States case, the tribunals seem to have held that human rights cases might help to illuminate—by way of analogy—how certain investment treaty provisions might be construed.45
In the Mondev v. United States case under NAFTA, the tribunal faced a claim by a Canadian real estate developer objecting to its treatment at the hands of US courts. In the course of ruling on Mondev’s claim that it had not received “treatment in accordance with international law”, the tribunal examined the case-law of the European Court of Human Rights with respect to Article 6(1) which provides among other things a right to a court hearing.46 In other arbitration cases, including the Tecmed v. Mexico case, arbitrators have looked to human rights case-law for assistance in interpreting the BIT obligations owed to investors in relation to expropriations of property.47 Thus, for example, the jurisprudence of the European Court of Human Rights on the “peaceful enjoyment of possessions” has been referred to by arbitrators seeking to interpret investment treaty protections against expropriation or nationalization. In the Azurix v. Argentina case, an ICSID tribunal endorsed the approach taken in the Tecmed v. Mexico case (described above) whereby a judgment of the European Court of Human Rights was deemed to provide “useful guidance” to the interpretation of the expropriation clause of the US-Argentina bilateral investment treaty.48
“…it is clear that arbitrators—and some investors—have drawn upon human rights jurisprudence, in an effort to buttress or inform certain interpretations of protections owed to investors.”
Another instance where arbitrators have referenced human rights jurisprudence in order to buttress interpretation of protections owed to investors occurs in a 2008 ruling in a dispute between a Dutch-incorporated energy company and the Government of Romania.49 Although Romania had asked the tribunal to decline jurisdiction over the dispute on the grounds that the Dutch company was, in fact, controlled by Romanian nationals, the tribunal declined to do so Rather, the tribunal noted that the terms of the Netherlands Romania investment treaty were clearly capacious enough that Romanian citizens could create corporate entities in the Netherlands and use those for purposes of owning investments made in Romania. By doing this, Romanian citizens would obviously benefit indirectly from the international treaty protections owed by Romania to Dutch companies. In the course of defending this particular reading of the Romania-Netherlands investment treaty, the arbitrators observed that it is not controversial for states to negotiate international treaties that apply to their own citizens:
The classic instance is that characteristic feature of our period, human rights, but there is no reason why identical policy considerations should not animate States in trade, environmental or other fields; and indeed, as one knows from practical experience, important elements connected with property, assets and economic activity enter into the heart of human rights regimes.50
In other words, these examples, including treaties on human rights, assisted the tribunal in holding that Romania might have willingly negotiated an international treaty which protected its own citizens provided that they incorporated in another territory and then invoked the treaty in the guise of foreign investors.
In a recent BIT arbitration, arbitrators were asked in another case involving Romania, to look skeptically on a foreign investor claim by a pair of Swedish nationals, who were Romanian-born and retained extensive ties with Romania. In the course of dismissing certain jurisdictional objections by Romania, the tribunal explored whether the claimants were indeed nationals under Swedish law and thus entitled to sue Romania under the Sweden-Romania BIT. In so doing, the tribunal noted that it “will be mindful of Article 15 of the Universal Declaration of Human Rights according to which everyone has the right to a nationality, and that no one shall be arbitrarily deprived of this nationality nor denied the right to change his nationality.”51 The tribunal did not reference this right further, but its invocation appears to have colored the tribunal’s approach to Romania’s objections to the claimants’ standing in the case. Indeed, the tribunal observed that a state wishing to second-guess another state’s conferment of nationality upon an individual faces a steep burden of proof.52
Yet another instance where arbitrators have referenced human rights law on behalf of foreign investors can be seen in the arbitration between the US-based energy company CMS Gas Transmission and the Government of Argentina. In a 2005 ruling, arbitrators dismissed objections raised by Argentina to the effect that the social and economic impacts of its recent financial crisis compromised human rights, and thereby raised questions as to the applicability of investment treaties and the protections owed to foreign investors investing in Argentina’s public utilities. Notably, the arbitrators took the view, without elaborating, that fundamental human rights were not affected; moreover, the arbitrators added that Argentina’s Constitution and international human rights treaties provide protection for property rights, thus minimizing the likelihood that the former agreements were in collision with investment treaty provisions protecting property.53
Another especially notable instance where human rights obligations were raised in the context of an investment treaty dispute occurred in the Trinh Vinh Binh v. Vietnam arbitration under the Netherlands-Vietnam bilateral investment treaty. As noted earlier in this paper, no rulings were issued in this UNCITRAL arbitration. Moreover, the pleadings in the case remain confidential. However, an investigation for Rights & Democracy finds that human rights arguments were raised by the claimant, a Dutch-Vietnamese dual national. Specifically, it was alleged that Mr. Trinh—who made millions of dollars in investments in Vietnam—was detained by authorities for an excessive period of time prior to trial (18 months) and subjected to “torture” and “inhumane treatment” while in the custody of authorities. The claimant argued that conduct by the Vietnamese police and security forces that was patently illegal and corrupt and seriously deviated from international norms of due process and human rights should serve to violate the “full protection and security” and “fair and equitable treatment” obligations in the Vietnam-Netherlands treaty.
Finally in a still-ongoing arbitration, which has yet to see a ruling by arbitrators, a group of Canadian First Nations individuals are suing the US Government, alleging interferences with their tobacco business. They object, in particular to the terms of a major settlement struck between most US states and the 4 major tobacco companies—and the impact of this settlement upon their own business in the United States. The claimants argue that the US has breached a provision of the NAFTA which obliges governments to treat investors “(i)n accordance with international law, including fair and equitable treatment and full protection and security.”54 However, the claimants argue that the interpretation of that NAFTA obligation must be in accordance with the wider body of international law, including international human rights law, and particularly those obligations owed to indigenous peoples. Among these latter obligations, according to the investors, is an obligation to respect the rights of indigenous peoples to occupy and enjoy their traditional territories, including for purposes of carrying out traditional commercial activities, as well as an obligation to “take pro-active steps to engage in good faith consultations with indigenous peoples before imposing a measure that impairs individual or group property rights and/or indigenous economic activities”.55
In essence, the claimants argue that arbitrators should take into account these human rights obligations owed to indigenous peoples when interpreting and construing what it means to treat the investors “fairly and equitably”. A decision in the case may not be forthcoming until 2009 or 2010.
Based upon the above examples, it is clear that arbitrators —and some investors—have drawn upon human rights jurisprudence, in an effort to buttress or inform certain interpretations of protections owed to investors. It must be recalled that arbitrators in investment treaty disputes lack the jurisdiction to hold states liable for breach of their human rights obligations. Rather, under the terms of the investment treaties, the arbitrators are generally limited to determining if the protections in the investment treaty have been breached. As part of such an interpretive exercise, arbitrators can (and sometimes do) look to human rights law for analogies or as an aid in constructing the meaning of the investment treaty obligations.
Thus, investment treaties may be useful for foreign investors (both individuals and corporations) seeking to advance certain narrow ranges of human rights. Apart from using investment treaties to challenge state taking of property, individuals who have suffered mistreatment (lengthy pretrial detention, inhumane treatment, or other more egregious abuses) also may be able to hold governments to account via the means of an investment treaty arbitration.56 Also, foreign-owned media companies or individual publishers might be able to bring claims against governments which seek to censor or silence a free press. For example, in one notable case, an ICSID tribunal indicated that a government would breach an investment treaty if it punished a foreign-owned publisher for publishing campaign materials for an opposition political party.57 Although this claim does not appear to have been couched in express human rights terms, the investor argued that political retaliation against the corporate publisher of opposition materials should be considered “unfair” and “inequitable” treatment contrary to an investment treaty.58 It should be observed that this particular dispute might have given rise to a claim under the freedom of expression clause of the European Convention on Human Rights, rather than under a bilateral investment treaty. Thus, to some extent, regional human rights agreements and bilateral investment treaties confer somewhat overlapping forms of protection; it may fall to claimants to decide which channel they will use to pursue their claims.
While the scope for investment treaties to advance certain human rights objectives should not be overlooked, neither should it be overstated. Ultimately, those wishing to claim under a treaty must be able to demonstrate an investment. As noted earlier, these investment treaties protect a much narrower range of aliens than an earlier generation of international treaties which protected all aliens (irrespective of their being involved in cross-border investments).
Apart from those cases where foreign investors use investment treaties in an effort to advance certain narrow human rights arguments—there is another type of scenario that may arise under the foreign investment protection regime: where legal disputes between investors and states may have knock-on implications for the human rights of other persons living under the jurisdiction of the host country. It is these human rights impacts, which were the central focus of the earlier Rights & Democracy human rights impact assessment case-studies, and which are the focus of the next sections.
Relevance of a state’s human rights obligations towards non-investors
“…legal disputes between investors and states may have knock-on implications for the human rights of other persons living under the jurisdiction of the host country.”
Where international arbitrations arise between a foreign investor and its host-state, a key question is whether the human rights of non-parties to the arbitration (eg. communities or individuals living under the state’s jurisdiction) may be relevant to the resolution of such disputes. In some circumstances, a state may act so as to further its human rights law obligations towards local members of a community, yet this could have adverse effects on a foreign investor (eg. by imposing some cost or burden). If the foreign investor sues the state for alleged breach of an investment treaty, will the broader human rights dimensions of the case be considered by arbitrators? In theory, there is substantial scope for governments to raise human rights law obligations in the course of defending against allegations of investment treaty breach. But are governments actually raising human rights arguments in these arbitration cases? As the next section makes clear, governments are beginning to raise human rights law arguments—thus obliging arbitrators to consider their relevance and import.
– The human right to water
One of the most visible circumstances where a government’s human rights obligations to those living within its territory may come into the frame of investment treaty arbitrations is in relation to foreign investments in the water and sanitation sector. Over the last decade, there have been at least a dozen BIT arbitrations brought against governments in relation to disputes in this sector.59 Ten of these cases have been brought against Argentina, whereas the remaining two were brought against Bolivia and Tanzania respectively.60 Others may have been launched without publicity, given that there are no universal requirements for such lawsuits to be publicly disclosed.
United Nations bodies have increasingly emphasized that a right to water can be inferred from several of the rights in the International Covenant on Economic, Social and Cultural Rights, including the right to the highest attainable standard of health, the right to housing, and the right to food; what’s more human rights obligations related to water are explicitly referenced in several other human rights instruments, including the UN Convention on the Rights of the Child, and the UN Convention on the Elimination of all forms of Discrimination against Women.61 At a minimum, states have obligations to progressively realize economic and social rights to the maximum of their available resources. The Committee on Economic Social and Cultural Rights, in its General Comment No.15 —a non-binding, but authoritative interpretation of the ESCR—has set forth a number of steps which governments must pursue, including steps to ensure that third parties entrusted with water delivery are not permitted to compromise “equal, affordable and physical access to sufficient, safe and acceptable water.”62
It has long been conjectured that human rights might be at stake in certain of the disputes which gave rise to these investor-state arbitrations in the water sector.63 New research conducted for Rights & Democracy finds clear evidence that human rights arguments have been raised by the respondent host-government in at least one of these ongoing international arbitrations arising out of the Aguas Argentinas concession.64 As will be described below, the tabling of these human rights arguments in the Aguas Argentinas case places the onus squarely upon the arbitration tribunal to address such arguments and to consider their relevance to the legal dispute. Indeed, the tribunal hearing the dispute acknowledged at an early stage of the proceedings that the case “may raise a variety of complex public and international law questions, including human rights considerations.”65 A ruling in that arbitration could emerge in 2009.
The particular dispute in question arises out of a major investment in the water utility of the municipality of Buenos Aires by a consortium of foreign investors, including Suez, Vivendi, Anglian Water Group and Aguas Barcelona. Together with local investors, the foreign firms created a local entity, Aguas Argentinas S.A. which entered into a 30 year contract to manage the water and sewage concession. Over the course of the investment, the investors would quarrel with local authorities about a host of issues. Later, as Argentina’s financial crisis deepened, the investor grappled with the government over the freezing of water-prices charged to consumers. The investor argued that it was contractually entitled to modifications of tariff-rates in the event of inflation or currency devaluation, so as to maintain the “economic equilibrium” of the project over its lifetime. The Government of Argentina countered that Aguas Argentinas (a local company) was party to the concession contracts and that the foreign investors—who were not themselves signatory to such contracts—should not be able to bring an arbitration case which depends upon the alleged breach of those contractual commitments. Rather, it would be for the local company to pursue the matter in the local courts. Moreover, the Government countered that Aguas Argentinas has failed to live up to its contractual obligations—including in relation to water quality and supply.
In March of 2006, the Argentine Government terminated the concession, alleging technical failures by Aguas Argentinas. By this time, the foreign investors had long since resorted to international arbitration, alleging that various Argentine actions violated protections in BITs signed by Argentina with the investors’ home countries: France, Spain and the United Kingdom. By August of 2006 an arbitration tribunal had ruled that it had jurisdiction to examine the investor allegations on their merits.66 At the crux of the claims by the foreign investors is an argument that Argentina has breached its contractual undertakings —leading to a knock-on breach of its BIT obligations to protect foreign investments. Notably, in legal filings in this ICSID proceeding, Argentina has made human rights a major part of its defense.
– Argentina argues for relevance of human rights law in BIT arbitrations
Argentina has insisted that its BIT obligations must not be interpreted in a vacuum divorced from the rest of international law. In particular, Argentina stresses that the BIT “must be construed in a manner which does not affect the fulfillment of other international obligations between the states signatory of such BITs.”67 According to Argentina, such an approach would ensure that BIT obligations would be read in light of other rules of international law linking Argentina, the United Kingdom, France and Spain, including “any treaty on human rights contemplating the human right to water”.68
Second, after arguing for the applicability of human rights law, Argentina insists that its treatment of the claimants in the Aguas Argentinas arbitration was motivated by various business failings on the part of Aguas Argentinas, coupled with an overriding obligation on Argentina’s part to protect the population’s right to water.69 In Argentina’s view, these shortcomings by Aguas Argentinas compelled the Argentine authorities to intercede so as to ensure that the right to water was not undermined by third parties.70
– Reading the expropriation obligation in light of human rights
Human rights obligations are invoked by Argentina in an effort to rebut several specific allegations of treaty breach. For instance, in response to claims that Argentina indirectly expropriated the Aguas Argentinas concession, the Government has argued that any measures taken were motivated by obligations, binding in international law, to address those breaches by the concessionaire “which engaged fundamental human rights issues”.71 In particular, Argentina cites General Comment No.15 on the “Right to Water”, in support of its “overriding responsibility to ensure the availability of water to all members of society.72 In view of such compelling motives, Argentina maintains that its actions were a legitimate and proportionate response—rather than an act of indirect expropriation contrary to the BITs at issue.73
For their part, the claimant water companies retort that the human right to water is “irrelevant” to the arbitration.74 On this view, the motives of a government are irrelevant to a determination as to whether an expropriation has occurred; rather the claimants lay their emphasis squarely on the effect of Argentina’s measures, and rely on those earlier arbitral rulings which deem irrelevant the purpose or motive underlying a government’s conduct.75 Of particular note, the claimants insist that they had “specific representations” or promises from the Argentine Government—in the form of tariff adjustment mechanisms—which distinguish its allegations of expropriation from those other cases where investors had no such promises or representations from government.
– Reading the fair and equitable treatment obligation in view of human rights
Apart from seeking to defend against a claim of expropriation by invoking its human rights obligations, Argentina has also mounted a human rights inspired defense to allegations that it failed to extend “fair and equitable treatment” to the claimants. On this argument, the BIT obligation must be interpreted so that Argentina’s conduct is viewed in its broader context—including the extraordinarysocial and economic crisis befalling the country, as well as “other relevant international norms,” including the right to water.76 Again, Argentina refers to General Comment No.15 in support of its “overriding responsibility” to ensure water-availability to all.77
According to the investors in the Aguas Argentinas consortium, the fair and equitable treatment clause should be interpreted so as to provide a stable and predictable investment environment which ensures that an investor’s legitimate and reasonable expectations are met. The Argentine Government disagrees with the “legitimate expectations” lens, characterizing the investors’ reading as unrealistically “broad”. However, the Government adds that any attempt by the tribunal to examine the investors’ “legitimate and reasonable expectations” should also take account of the broader context in which Argentina operated.78
– The state of necessity and human rights obligations
A third way in which human rights figure prominently in Argentina’s defense in the Aguas Argentinas arbitration is the Government’s last-ditch defense of necessity. Under this argument, any bilateral investment treaty breaches would be excused by the state of necessity which Argentina operated under from the onset of the financial crisis. The defense of necessity has been particularly contentious, with arbitration tribunals in other cases reaching divergent views as to its applicability to the Argentine financial crisis.79 In the Aguas Argentinas case, the Government argues that, by virtue of a sustained state of emergency arising in December 2001, Argentina meets the strict conditions imposed by customary international law in order to be excused from liability for any treaty breaches. A key part of Argentina’s necessity defense is the identification of a number of human rights obligations under the UN Charter, various human rights treaties, and domestic law which obliged the Government to act so as to protect and uphold rights to life, health and sanitation. Acknowledging the central role of water to such rights, the Government noted that it was incumbent to take emergency measures designed to ensure continued and expanding access to water and sanitation during the financial crisis.80
“Argentina’s defense of necessity (in an effort to excuse emergency measures harming foreign investment) has engendered sharp disagreement amongst arbitrators in other arbitrations — as has the invocation by Argentina of its obligation to protect the human rights of Argentine citizens.”
In response to these arguments, the claimant water companies argue that Argentina had other alternatives short of an outright abandonment of the earlier-agreed water regulation framework and commitments made to foreign water companies. In particular, the companies contend that Argentina could have established “systems of cross-subsidies to ensure that the poorest categories of consumers were shielded from increases in water prices during the crisis period, whilst the wealthier consumers and industry (which continues to export in dollar terms) would have seen increases in line with the inflation of other basic products.”81
Argentina’s defense of necessity (in an effort to excuse emergency measures harming foreign investment) has engendered sharp disagreement amongst arbitrators in other arbitrations—as has the invocation by Argentina of its obligation to protect the human rights of Argentine citizens. As earlier noted, the tribunal in the CMS v. Argentina case quite peremptorily dismissed Argentina’s human rights arguments. Subsequent tribunals, however, have given greater attention to a more generalized human rights defense raised by Argentina. According to this defense, the emergency measures taken in the face of the financial crisis were necessary to uphold Argentina’s constitutional order and basic rights and liberties of the Argentine public. However, when faced with such a generalized human rights defense, tribunals are reaching sharply divergent conclusions.
For instance, in the 2007 ruling in the Sempra v. Argentina arbitration, an ICSID tribunal revealed that an expert witness for the US gas company had conceded that Argentina would have been compelled by the American Convention on Human Rights to have maintained its constitutional order in the face of its 2001-02 financial crisis.82 The arbitrators took the view that the constitutional order (and survival of the state) were not imperiled by the crisis and that various policy measures were available to Argentina. This precluded Argentina from relying on a defense of necessity in relation to the emergency measures taken during that crisis.83
Taking a starkly different view, another ICSID tribunal, in a 2008 ruling in the Continental Casualty v. Argentina case has held that the extreme social and economic hardship and dislocation suffered by Argentina clearly led the government to act out of a state of necessity.84 Indeed, the tribunal pointedly noted that arbitrators should accord a significant margin of appreciation to states acting in times of such grave crisis, and not seek to second-guess the policy choices of governments.85 Moreover, the arbitrators gave serious weight to the need for states to act proactively to protect constitutional guarantees and fundamental liberties rather than wait until it is too late to protect such liberties in the face of looming catastrophe.86
In previously unseen briefs filed in that arbitration by Argentina, the Government argued that it had an obligation to ensure basic human rights and human dignity in the face of a dire financial crisis and that these rights are of a higher order than those contained in investment treaties.87 Invoking the Inter-American Court of Human Rights, Argentina maintained that no investment treaty obligation could oppose the Government’s obligation to guarantee the “free and full exercise of the rights of all persons under (its) jurisdiction”.88
– NGOs also raise human rights law arguments in Argentine water cases
In several investment treaty arbitrations, arbitrators have confirmed their ability to accept legal arguments submitted by outside actors—although strict confidentiality limits can sometimes make it difficult for such would-be-interveners to know what is taking place in the arbitration proceeding. In addition to the human rights arguments tabled by Argentina in the Aguas Argentinas arbitration, similar arguments have been made by a group of non-governmental organizations intervening in the case.89
In a legal brief submitted several months after Argentina filed the above-discussed human rights defenses (which were themselves confidential), these NGOs presented arguments for consideration of the tribunal. The NGOs stressed that Argentina has international law obligations related to the right to water and that such obligations will be germane to the arbitration, both as part of the applicable law of the dispute, and as a “lens” through which the BIT obligations should be interpreted and applied.90 Indeed, the NGOs seemingly express some optimism that arbitrators can reach a harmonious interpretation of investment treaty obligations and human rights obligations, provided that the latter are taken seriously.
The NGO brief notes that human rights law requires that Argentina adopt measures to ensure access to water to the population, including physical and economic access. On this view, the freezing of the tariff levels amidst an economic crisis allowed the population to have access to water and sanitation, and thus the measures complied with Argentina’s requirements under human rights law. With respect to the “fair and equitable treatment” standard, the NGOs argue that no investor could have a “legitimate expectation” that a Government would permit water-prices to increase three-fold following the devaluation of the Argentine Peso. Accordingly, a foreign investor could not claim that the breach of such expectations amounted to unfair or inequitable treatment by Argentina. The NGOs also argue that the foreign investors should not be permitted to rely upon any apparent commitments by Argentina—for example in concession contracts— to the effect that it would refrain from taking certain human rights-protecting measures in the event of an economic crisis. The NGOs argue that it would be a violation of “public order” for arbitrators to interpret BIT protections, such as the “fair and equitable treatment” standard, in a manner that legitimizes any attempt by a government to “contract out” of its human rights obligations.
– Thorny questions remain unresolved
Together, the arguments of Argentina and the amicus curiae NGOs, along with the responses of the water companies, invite the presiding tribunal to resolve the dispute in a wider frame—one which takes account not merely of Argentina’s legal obligations to foreign investors, but the wider constellation of human rights obligations also applicable to Argentina. Here, there are no easy and ready-made answers as to what human rights obligations are required of Argentina in the specific circumstances of the financial crisis. The arbitrators will need to assess those human rights obligations, and how they should be reconciled with Argentina’s investment treaty obligations. Even if arbitrators determine that human rights law obligations are relevant to the determination of the dispute, this may not excuse any and all actions taken by Argentina against foreign investors. Indeed, arbitrators face a difficult and novel task in determining how international human rights and economic law obligations are to be juggled by states.
“From a human rights perspective, great sensitivity is called for in such situations where protestors are objecting to a foreign investor’s activities, as there is ample evidence of overzealous use of force by police and security forces in relation to the protection of foreign investments in the developing world.”
With a ruling expected early in 2009, this case could mark the first known instance where arbitrators devote extensive discussion to a human rights defense raised by a government in an investment treaty arbitration. Notably, in the case of another recently-resolved investment treaty arbitration between a UK water services company, Biwater Gauff Tanzania Ltd., and the Republic of Tanzania, the Government did not cast its defense in strict human rights terms, nor did the arbitral tribunal explore the human rights obligations of Tanzania.91 The final award in the Biwater case, issued in July of 2008, suggests that Tanzania artfully sidestepped the question of whether it was under a human rights obligation in relation to water: “Water and sanitation services are vitally important, and the Republic was more than right to protect such services in case of a crisis: it has a moral and perhaps even a legal obligation to do so.”92
By contrast, the centrality of right to water arguments in Argentina’s ongoing arbitration with the Aguas Argentinas consortium will likely compel the tribunal to grapple with human rights issues in any ruling in that case. It will be important for human rights actors to monitor and analyze the resolution of the dispute by the tribunal. When the ruling is issued, the website of the ICSID will indicate that a decision has been handed down—although it can sometimes take months for the parties to give their consent to ICSID to publish that decision. In rare cases, parties do not jointly consent to the release of an award, but either of the two parties may elect to release or circulate the decision themselves.
– Human rights to assembly and free expression
States have various international human rights law obligations to protect the right of citizens to assemble peacefully, express themselves, and to take part in non-violent protests. The International Covenant on Civil and Political Rights contains such obligations, as do regional human rights conventions.93 Furthermore, under some circumstances, states may need to take certain “positive” or “proactive” measures to ensure the effectiveness of such rights. For example, the European Court of Human Rights has held that governments have an obligation to provide a degree of police protection at public protests which might be targeted by disruption or violence.94 These particular rights are especially germane in any discussion of foreign investment, as some FDI projects can be controversial and subject to opposition.
Just as states have clear human rights obligations in relation to freedom of expression and assembly, governments may undertake in their international investment treaties to provide foreign investors and/ or investments with “full protection and security”. At a minimum, this obligation requires that states provide a baseline of police protection for foreign-owned projects; this is not a strict liability obligation, but it does mandate a certain level of due diligence on the part of the host country. For instance, in a 1990s-era FDI dispute between an American corporation and (then) Zaire, the Government was found by arbitrators to have breached the “full protection and security” obligation because it had taken no steps whatsoever to prevent the ransacking and looting of privately-owned manufacturing facilities by the state’s armed forces. This legal obligation on states to exercise due diligence in protecting foreign-owned investment also extends to the actions of non-state actors (e.g. citizens, other businesses, criminals, etc.)95 Further muddying the picture, some investment treaty arbitrators have taken the view that the “protection and security” standard includes not only the physical protection of foreign-owned investments, but also security from other forms of “harassment” which pose no physical threat to assets or threat of violence.96 While a disputed interpretation, it is conceivable that activist campaigns, even when unaccompanied by physical efforts to blockade or picket an investment, might be construed as forms of “harassment”.97
It should also be stressed that host governments may take on even more extensive physical protection and security obligations in individual contracts or host-government agreements with a particular foreign investor. For example, a host state may agree to provide 24-hour-a-day police protection for particular facilities, or commit particular resources (such as helicopters, police vehicles, etc.), or pledge to prevent any “interferences” by outside actors with an investor’s operations.98 Such obligations go beyond the standards found in international treaties, and are beyond the purview of this paper. However, they may impose more stringent legal obligations—whose relationship with human rights will be even more friction-generating—even as such contract obligations remain hidden from public view by virtue of being buried in confidential business arrangements concluded with foreign investors.99
At the best of times, governments may walk a tight-rope in balancing legitimate rights of protest, while offering basic police protection to FDI projects. From a human rights perspective, great sensitivity is called for in such situations where protestors are objecting to a foreign investor’s activities, as there is ample evidence of overzealous use of force by police and security forces in relation to the protection of foreign investments in the developing world.100 Indeed, there is some anecdotal evidence to suggest that governments feel under varying degrees of legal compulsion to smooth the path for FDI projects. For example, the government of Guatemala has professed to being torn between its duties to provide security for a highly controversial foreign-owned gold and silver mine in the country’s western region and the government’s obligations to uphold the rights of citizens and indigenous groups to assemble and protest the mining operation. As has been widely reported in the mainstream news media, public opposition to the project ultimately tipped over into violence as locals and security forces clashed over efforts by protestors to blockade roadways and impede further mining activity at the mining site.101 Media coverage of these events has alluded to the government’s feeling under legal duties to ensure that protests do not derail the investment in question. In April of 2005, the Associated Press noted that “(t)he government said it had to honor the mining concession, or risk a huge lawsuit by the company.”102
By and large however, investment protection treaties are typically silent on the obligations of states to respect human rights to expression and assembly, much less the complex challenges inherent in balancing and reconciling such human rights obligations with the policing and provision of security of FDI projects. For instance, exactly what degree of disruption of business activities must be borne by foreign investors facing citizen protests? Protestors might blockade roadways or facilities for a period of hours in order to conduct a protest march. Conversely, protest activities might shut down business activity for a period of weeks or even months. Similarly, labour unrest could lead to losses or disruption on the part of foreign-owned businesses, either through picketing, sit-ins or other activities. However, investment treaties offer no guidance to arbitrators as to how to reconcile—in concrete circumstances—a state’s human rights obligations and its security obligations to foreign investors.
“Ultimately, arbitrators might need to judge at what stage police or security forces became duty-bound by virtue of treaty obligations to minimize, or even dismantle, such citizen activities or incur financial liability to foreign investors for treaty breach. ”
A review of known investment treaty arbitration disputes finds that in several legal disputes, foreign investors have sued states and alleged that citizen or worker protests lead to a breach of the host state’s “protection and security” obligations towards the affected investor. The available record is silent in these cases as to whether the states raised explicit human rights defenses, for example by referring to human rights law obligations. In each case, arbitrators ruled that the alleged disruptions suffered by the investors did not rise to the level where the host state failed to provide for basic security and protection. In fact, as will be seen, these particular cases provide some grounds for cautious optimism that the particular treaty obligation (full protection and security) is of limited reach and that tribunals are also attentive to the delicate balancing acts faced by states needing to protect foreign investment and the democratic rights of citizens. Still, it should be reiterated that arbitrators are under no strict duty to follow the path set by earlier tribunals; as such there is no guarantee that future tribunals will approach doctrinal questions in similar ways.
– Arbitrators find that facts do not support “failure to provide security” arguments in key cases
In a high-profile investment treaty arbitration involving a Spanish firm and the Government of Mexico, the investor accused state authorities of having breached its “full protection and security” obligation by not preventing “adverse social demonstrations” which had dogged the investor’s controversial hazardous waste treatment facility.103 In a 2003 arbitration ruling in that case, the tribunal determined that there was “not sufficient evidence supporting the allegation that the Mexican authorities, whether municipal, state or federal, have not reacted reasonably, in accordance with the parameters inherent in a democratic state, to the direct action movements conducted by those who were against the landfill.”104 However, had the investor presented “sufficient evidence” regarding the conduct of the Mexican authorities, it seems clear that the tribunal would have had to wrestle with the balance to be struck between the right to public protest and the obligation to provide protection and security for foreign investment projects.
In another investment treaty arbitration, a foreign investor argued unsuccessfully that the state of Romania had failed to quell labor unrest, to the detriment of the investor’s industrial operations in that country.105 For its part, the Romanian Government had countered that the labor unrest was occasioned by a failure of the foreign firm to pay wages owed to workers, and that the organizers of these protests conducted them in an “orderly manner and after notice had been given to the Prefect’s office.” The presiding tribunal was inclined to agree, and noted that there was no evidence that the state authorities had failed to meet the relatively minimal obligations flowing from that particular treaty provision.
In a third investor-state dispute resolved in August of 2008, the investor had complained that it was subjected to “worker riots” and that the failure of Bulgarian authorities to curtail these riots constituted a breach of the state’s obligation to provide full protection and security to the foreign investor.106 Bulgaria countered that the so-called “riots” were, in fact, peaceful protests by workers who had been denied their wages, and that adequate police presence had been devoted to policing these demonstrations. Notably, the tribunal was unable to determine which of the conflicting factual accounts was more accurate. With the onus on the investor to make its case, the claim for breach of the protection and security obligation failed.
Based on this trio of notable cases, it appears arbitrators have tended to adopt relatively restrained readings of the “full protection and security” treaty standard— viewing it as a due diligence standard, rather than a strict liability standard. In the cases surveyed, there has been a general failure of the claimants to provide “sufficient evidence” of a state’s failing to meet this standard in cases where policing of citizen or worker protests were at issue. Based on the facts of these particular arbitrations, it would appear that these claims were not especially difficult ones for arbitrators to grapple with. Much thornier fact-scenarios could easily arise where citizen mobilizations or protests lead to more significant disruption of a foreign-owned business’s activities. Ultimately, arbitrators might need to judge at what stage police or security forces became duty-bound by virtue of treaty obligations to minimize, or even dismantle, such citizen activities or incur financial liability to foreign investors for treaty breach. While there is no public record of an investment treaty arbitration dealing with these thornier questions it is very conceivable that one might arise in future. Indeed, adjudicators in the trade realm have grappled with some cases where citizen blockades have come into collision with the imperatives of free trade and transit.107
Certainly, there is significant potential for arbitrators to grapple in future with the balance between investor security and citizen rights of protest or assembly. Moreover, some future disputes may also implicate questions of squatters’ rights and longer-term “interferences” by local citizens or groups. One pending arbitration claim which has come to light under the US-Central America Free Trade Agreement (CAFTA) could provide a more difficult test-case for arbitrators. The case in question involves allegations by a US investor that the Government of Guatemala has failed to provide protection for its railway business. In a 2007 document offering a preliminary sketch of its legal claims, the investor claimed to have “faced public interference from locals who have vandalized the tracks, stolen railroad materials for personal use and set up living quarters as squatters along the tracks, in some cases in collaboration with local authorities.”108
While the prospect of investment arbitration tribunals grappling with such issues may discomfit human rights practitioners, neither can they shrink from the reality that such cases are arising. Even where arbitrators acknowledge the need to consider a state’s human rights obligations, it would help for investment treaties to set forth how tribunals should reconcile the security obligations owed to foreign investors with these human rights obligations owed to citizens of the host country. Governments might wish to clarify that the duty of host states to provide “full protection and security” to foreign investors and/ or investments must not infringe upon the democratic rights of citizens, as embodied in various international and national human rights treaties, to assemble and express themselves peaceably. What’s more, investment treaties might state expressly that they should be read in conformity with human rights norms. Perhaps more helpful, treaty negotiators might seize the more difficult task of setting out specific tests to help guide adjudicators as to the appropriate balance to be struck in concrete situations. For example, what level of inconvenience or disruption must be borne by foreign investors before their treaty rights are violated in order to ensure that the democratic rights of citizens have been exercised?
Regrettably, some governments need little excuse to trample upon the rights and liberties of local citizens —particularly where signature economic projects are at stake with large financial and political significance. In the absence of more definitive statements as to the full protection and security standard and its relationship to the human rights of citizens, certain investors or governments might bluff or over-state the demands of the “full protection and security” obligation. It is certainly commonplace for foreign investors to send threatening letters to governments urging that they reconsider certain policy actions or postures, lest they face arbitration claims for damages. Because such correspondence tends to be private, it is impossible to assess how foreign investors may characterize (or perhaps exaggerate) the obligations of host governments when it comes to matters of policing and security. Thus, human rights actors would be advised to monitor and publicize those arbitral rulings which strike a balance between investor security and the rights of persons living in the particular community. Greater awareness on the part of governments—particularly those with little or no experience of investment treaty arbitrations —could ensure that policymakers are not goaded into taking misguided actions to the detriment of the basic democratic rights of citizens.
– The human rights of indigenous peoples
To date, at least two known investment treaty arbitrations have seen clear arguments as to the relationship of investment obligations and human rights owed to indigenous peoples. The Grand River Enterprises case currently pending under NAFTA was discussed earlier in this paper, and involves arguments that First Nations investors in the United States have not been treated fairly and equitably—with a particular emphasis laid upon the alleged failure of the US Government to meet certain human rights obligations to indigenous persons.
Meanwhile, a different scenario has arisen in a NAFTA arbitration, between the Canadian mining company Glamis Gold Ltd. and the United States Government. In the Glamis case, human rights obligations have been raised not in support of an investor’s claim, but rather in opposition to it. The Glamis case involves a claim by the Canadian company that California state mining regulations violate protections contained in the NAFTA. In particular, Glamis objects to requirements for back-filling and re-grading of open pit mine sites which are in close proximity to Native American sacred sites. The Canadian firm mounted its claim in 2003, and in 2005 a US indigenous group (the Quechan) applied to the tribunal for leave to intervene as amicus curiae in the case. At the same time, the Quechan community tabled a legal brief which it sought to have considered by the tribunal. Among the arguments raised in that brief is one which encourages the tribunal “to construe the text of an international agreement in a manner that ensures consistency between and among all applicable international obligations.”109 In this instance, the Quechan encourage the tribunal to interpret Glamis’s treaty protections “in a manner consistent with the (USA)’s conventional and customary international law obligations to preserve and protect indigenous peoples’ rights to land and its resources.”110
“While clearly allowing expropriation of foreign-owned land, the compensation standards provided under these BITs may complicate the efforts of developing country governments that are contemplating land redistribution policies.”
At the time of writing, an award had yet to be rendered in the Glamis arbitration, although one may be forthcoming in early 2009. However, in parallel with that arbitration, it should be observed that human rights courts have also had occasion to grapple, in their own way, with the relationship between indigenous rights and the legal protections owed to foreign investors. In Paraguay, which boasts an extremely stratified pattern of land-ownership, claims have been brought to the Inter-American Court of Human Rights by indigenous groups laying claim to ancestral lands. In the Sawhoyamaxa case, the Court held that various rights of the Sawhoyamaxa community under the American Convention on Human Rights had been violated by Paraguay, following a more than a decade-long struggle by the community to gain title to certain ancestral lands.111 Among these rights were the community’s right to property, as well as its right to judicial protection and a fair trial (which were deemed to have been violated by a wholly ineffective domestic land claims process).
For its part, the Paraguayan Government had protested that the lands in question were privately-owned by German citizens and were being exploited productively. However, the Court held that this did not absolve the state of its duty to ensure restitution of the Sawhoyamaxa’s property. While declining to dictate how the state should strike the balance between the community’s property rights and those of the private-owners, the Court observed that, if the state could not “on objective and reasoned grounds” return the traditional lands to their previous owners, then the state “must surrender alternative lands of equal extension and quality, which will be chosen by agreement with the members of the indigenous peoples ….”112 Having done neither of these, the state was held to have violated the Sawhoyamaxa’s property rights under the American Convention on Human Rights.
Of particular interest, Paraguay had attempted to justify its failure to act in the Sawhoyamaxa case by reference to a bilateral investment treaty which protects German investments in Paraguay. According to the authorities, this treaty prohibited the Paraguayan authorities from expropriating the German-owned properties in question. However, the Inter-American Court rejected this line of argument, observing that the treaty permitted property to be expropriated for “public purposes”. Moreover, the Court noted that compliance with commercial treaties should always be compatible with the American Convention on Human Rights, “which is a multilateral treaty on human rights that stands in a class of its own and that generates rights for individual human beings and does not depend entirely on reciprocity among states.”113
The Court rightly observes that investment treaties typically do not prohibit expropriation or nationalization of property that is for a public purpose. This is important to recall given that the German Government has reportedly referred to the Germany-Paraguay treaty in efforts to deter the Paraguayan Government from expropriating German-owned lands.114 However, scrutiny of Article 4 of the Germany-Paraguay treaty clearly indicates that expropriations are permitted provided that they are accompanied by compensation for the affected property-owner.115
While clearly allowing expropriation of foreign-owned land, the compensation standards provided under these BITs may complicate the efforts of developing country governments that are contemplating land redistribution policies. As the next section makes clear, there are a number of live legal cases where foreign investors are objecting to land reform activities. The factual circumstances of such disputes can differ widely— with some governments appearing to follow carefully-prescribed legal procedures and safeguards, while others appear to make capricious land-grabs. One major recurring issue in these disputes will be the actual amount or level of compensation owing for breach of BITs in cases of land reform.
Land reform and compensation
Generally speaking, BITs do not prohibit governments from expropriating foreign-owned land or resources. However, BITs typically mandate that compensation must be paid in such circumstances, and while the terms differ from treaty to treaty, this compensation is often expressly pegged to the fair market-value of the assets in question.116 Thus, there may be important divergences between domestic law and BITs on the question of compensation. For example, the domestic laws of some countries may permit less-than-marketvalue-level compensation to be paid to affected property-owners in cases where expropriations have been undertaken for particularly important reasons. In South Africa, for instance, less than market value might be owing in case of expropriations taken for purposes of racial redress or land reform.117
“…there may be a divergence between the amounts that arbitration tribunals will pay to foreign investors for land expropriations and what human rights courts might award.”
Conversely, BITs may be construed as providing for market-value levels of compensation, leading to a potential obligation for the expropriating state to pay higher levels of compensation and perhaps complicating or hindering land reform or other redistributionist initiatives. In one oft-cited ruling not arising out of a BIT but which is often cited in BIT arbitration discussions, an arbitral tribunal held that the Government of Costa Rica was obliged to pay market-value compensation for the expropriation of a tract of land which was designated for use as a nature preserve.118 While the tribunal conceded that there was disagreement as to what standard of compensation was owed as a matter of international law—full, adequate, appropriate, fair, or reasonable—it added that, in the case before it, the members of the tribunal and the two parties had agreed that the standard was one which demanded “fair market value”.119
It is important however, to stress that arbitration tribunals have yet to grapple in an exhaustive way with the particular level of compensation owing in cases where land reform initiatives are alleged to violate investment treaty provisions. Even though investment treaties tend to spell out compensation standards, these are still subject to interpretation and debate. This is particularly the case where the treaties are ambiguous (providing for “just”, “fair” or “appropriate” compensation rather than full market-value compensation). For example, one arbitrator, Prof. Ian Brownlie, in an arbitration not related to land reform but involving a broadcasting enterprise, has ruled that a treaty provision that guarantees “just compensation” further defined in the relevant treaty as reflecting the “genuine value” of investments, does not require that full market-value compensation be paid.120 Brownlie’s decision also cited the work of Professor Oscar Schacter to the effect that “Large-scale expropriation such as general land reform often raises questions as to ability of the state to pay full compensation. In such examples, a good case can be made that ‘less than full value would be just compensation’ when the state would otherwise have an ‘overwhelming financial burden’.”121
Others have argued that BIT compensation standards should be interpreted flexibly as is the case under regional human rights conventions so as to accommodate certain overriding social interests or purposes.122 Indeed, commentators sometimes point to the practice of the European Court of Human Rights, which has stated that “Article 1 does not guarantee a right to full compensation in all circumstances, since legitimate objectives of ‘public interest’ may call for less than reimbursement of the full market value.”123 Indeed, in an effort to explicitly yoke the BIT compensation standard to that used in regional human rights law systems, the Government of Norway recently developed a draft model investment treaty which would adopt the approach used in the European Human Rights Convention with respect to questions of expropriation.124 This human rights approach might lead to less than market-value compensation being awarded in some investment treaty arbitrations, depending upon the circumstances motivating a given expropriation, for example where a government is pursuing bona fide land reform measures in favour of indigenous people.
It should be stressed, however, that such positions are contested ones—with investors and governments likely to differ sharply in the absence of crystal-clear treaty provisions. What is clear, is that these questions are not hypothetical; as the next section makes clear, a number of land-reform measures are currently being challenged by investors as potential breaches of investment treaty obligations.
– Land reform adjudications where investment treaty obligations are raised
While arbitration tribunals have yet to deal squarely with the question of whether full market-value compensation should be ordered in cases where land reform measures are governed by investment treaties, they will inevitably be asked to do so. Indeed, land expropriation claims have been threatened or initiated against a handful of developing countries already by European-based investors. Other cases may have been launched, or even fully adjudicated, without any publicity. Of the known cases, a UK investor brought a suit against the Venezuelan Government in 2005 after a state agency authorized the seizure of a number of UK-owned landholdings and designated these lands for redistribution to landless Venezuelans.125 Elsewhere, the Government of Namibia has faced the threat of similar lawsuits. Following the proposed expropriation of German-owned agricultural properties as part of Namibia’s land redistribution program, German citizens threatened Namibia with lawsuits under the Germany-Namibia bilateral investment treaty.126 Some have turned, in the first instance, to Namibia’s courts. The Namibian High Court, in a March 2008 ruling involving three German nationals, affirmed that the relevant Minister in charge of land reform is obliged to act in accordance with the Germany-Namibia Bilateral Investment Treaty.127 However, the court did not explore in further detail the demands of the treaty; rather the court simply indicated that the Ministry had failed to consider the treaty, as well as a number of other domestic legal requirements. Without commenting further on the BIT, the Court held that the Government’s move to expropriate the German nationals was in violation of Namibia’s own laws and constitution.
The South African Government has also faced a BIT lawsuit which was not publicized for several years, but about which some information has since come to light in the autumn of 2008.128 A Swiss investor successfully sued the South African government for failing to provide his South African land-holdings with the level of police protection mandated by the South Africa-Switzerland bilateral investment treaty. The investor also sought to sue South Africa for expropriation (and full compensation) as a result of his property having been claimed by several native South Africans as part of an ongoing domestic land-claims process. On the facts of the case, the arbitral tribunal rejected the Swiss investor’s expropriation claim because the South African land claims process was still ongoing. The tribunal therefore deemed any expropriation claim by the Swiss investor to be premature. Nevertheless, it is possible that other foreign investors will follow suit and seek to invoke their BIT protections in the face of any moves by the South African Government to expropriate land-holdings.
Of course, more abusive efforts by governments to redistribute land will also come in for challenge under investment treaties. A group of Dutch farmers filed a BIT claim against Zimbabwe in 2003, following the forcible and violent seizure of foreign-owned farms in Zimbabwe. The Dutch claimants allege that the Government, “by legislative acts and extra-legal means implemented a program to acquire land and improvements in Zimbabwe owned by Claimants and others for redistribution to certain of its citizens.”129
Ultimately, the human rights community needs to recognize that investment treaty arbitration represents the primary international channel through which land reform is likely to be challenged in developing (and even developed) countries by foreign investors. These treaties open a path for foreign investors to challenge land reform and other redistributionist policy initiatives, including those designed to benefit indigenous communities, and to do so outside of the domestic courts and constitutional systems of the countries where the reforms are undertaken.
Stepping back from the arbitration field and examining how such questions are handled in other international legal forums, it is worth stressing that there may be a divergence between the amounts that arbitration tribunals will pay to foreign investors for land expropriations and what human rights courts might award. Such a divergence serves to highlight the need to consider more squarely how different international adjudicative bodies are handling similar-type disputes.
It will be imperative for human rights actors to monitor developments in this emerging area of international law. It is not sufficient simply to track human rights processes and to push for declarations and norms which promote domestic policies of land and resource redistribution, without also taking note of key developments in the field of foreign investment protection which may harbour significant implications for land reform and redistributionist policy initiatives. Indeed, it may be necessary for investment treaties to offer much clearer guidance as to how the investor protections are to be squared with indigenous rights, land reform initiatives, and the level of compensation to be paid to affected foreign landowners.
– Policies targeting disadvantaged persons or groups
Often governments may introduce policy measures or preferences which are designed to boost the prospects of certain marginalized or disadvantaged persons or groups whether they be indigenous persons, ethnic minorities (or majorities), women, or others. On the face of it, such policies could come into friction with investment treaty protections accorded to foreign investors, particularly where certain duties or obligations are to be borne by foreign investors or foreign-owned companies, or where certain benefits or preferences are denied to foreign investors. Nonetheless, it is unusual for governments to make reservations or exceptions to investment treaty protections in this context. On rare occasions, some treaties include exceptions to ensure that positive discrimination measures taken in favor of designated groups cannot be challenged by foreign investors as a violation of the investment treaty guarantees of nondiscrimination (or national treatment).130
In other words, where special programs or policies are put in place to provide benefits or preferences to a targeted group or minority, a foreign investor would not be able to invoke his own entitlement to “national treatment” in an effort to obtain the same preferences or benefits meted out to these groups. However, such exception clauses do not appear in all treaties. Moreover, where they are seen, they may only apply to certain provisions of investment treaties, rather than the entire treaty. So, for instance, the exception may apply to the national treatment clause of a treaty, but not to other provisions which promise investors “fair and equitable treatment” or other protections.
It is exceedingly rare for a government to insert a general exception into an investment agreement so that none of the investment protection provisions may be invoked in an effort to challenge special preferences or policies for historically disadvantaged groups. Notably, the New Zealand Government in an agreement with Thailand includes such a sweeping general exception, thus making clear that none of the investor protections will override the government’s capacity to accord special or more favorable treatment to the indigenous Maori people.131
Such matters are not of mere hypothetical interest. For years, controversy has swirled around the Black Economic Empowerment (BEE) policies being developed by the South African Government in an effort to ameliorate the lingering effects of the Apartheid system.132 BEE policies include a range of measures targeted at Historically Disadvantaged South Africans (HDSAs), including employment equity schemes, preferential access to government contracts and licenses, and divestment policies which oblige businesses to sell shareholdings to HDSA partners. While well-intended, the policies have attracted criticism both from those who say that the policies impose too great a burden on business, as well as those who complain that the BEE policies benefit only a layer of well-connected wealthier HDSAs.133 In response to such criticisms, the South African Government has adapted its BEE policies over time—both as an effort to water down proposals for larger scale share divestments, as well as to ensure that the benefits of such policies are “broad-based” and beneficial for poorer, disadvantaged persons.
Some foreign businesses have responded warily to BEE, with the policies widely viewed as having contributed to the deadlock of major trade negotiations between South Africa and the United States. Meanwhile, some countries with whom South Africa has concluded economic agreements have expressed the view that the imposition of BEE measures on foreign enterprises may contravene South Africa’s international economic commitments.134
Recently, a group of European investors in the South African mining sector took the unprecedented move of filing a legal claim against South Africa, alleging that various BEE requirements violate the terms of investment protection treaties with Italy and Luxembourg. The investors own several South African mining companies, and held various mining rights which were subject to a mandatory “conversion” process, whereby all South African mineral resources are to be brought under state control and re-licensed to miners for fixed periods of time. As part of this conversion process, companies are assessed on their progress towards social, labour, and development objectives, including the hiring of HDSA managers and provision of special programs and benefits for HDSA workers. In the view of the investors, these BEE-inspired policies impose significant costs on company operations and amount to an “expropriation” of the companies’ preexisting mining rights, as well as “unfair” and “inequitable” treatment, contrary to the terms of South Africa’s investment protection treaties.
In their request for arbitration filed in 2006—which was still confidential at the time of this writing— the investors allege that they may suffer upwards of $350 million (US) in damages, depending upon the final effects of the BEE mandates introduced by the South African Government. In 2007, an arbitration panel was convened to hear the dispute, however progress to date has been slow; written arguments in the case will play out over 2008 and 2009, with hearings expected to be held later in 2009.
At this stage, any legal arguments tabled in the case remain confidential. However, already, it is clear that human rights policies are implicated in the dispute. A central question for the arbitrators will be the extent to which investment treaty obligations, including those related to expropriation and fair and equitable treatment, will yield to human rights policy objectives or be interpreted in light of those latter objectives. Here it should be noted that the specific treaties in question, with Italy and Belgium-Luxembourg, are silent as to wider human rights or social goals, and contain no express guidance for arbitrators seeking to determine if South Africa’s BEE policies are in conformity with the treaty protections accorded to foreign investors.135 In fact, the treaties with Italy and Belgium-Luxembourg stand in stark contrast with the South African Constitution which sets forth a long list of overarching goals and objectives, including to heal divisions of the past and to promote democratic values, social justice and fundamental human rights. Thus, much is in the hands of the parties to argue how the treaties ought to be interpreted—whether in a vacuum, or in light of the wider social context, and/or national and international laws on human rights— and for the arbitrators to ultimately pass judgment on such arguments.
Some have argued that the arbitrators should read these particular investment treaties narrowly, in light of relevant international law related to investment but not in light of broader human rights obligations which South Africa may have.136 On this view, only “that part of international law that relates to international investments as well as, in limited cases, rules of international law that are closely connected to the investment/activity forming the subject of the dispute” would be relevant to the interpretation of the investment treaty’s norms.137 The South African Government and some human rights groups might be expected to raise human rights arguments to counter this approach, arguing for a much broader interpretation of the investment treaty provisions in light of wider human rights concerns.
The South Africa arbitration has been brewing for years and unless settled will likely provide a testing ground for the relationship between BIT obligations and human rights obligations of the state. However, the major difficulty for those wishing to monitor or seeking to influence the handling of this particular dispute is that there is no guarantee (at least at the time of this writing) that the process will be open to public scrutiny. The arguments and the oral hearings themselves are playing out behind closed doors in sharp contrast with typical court proceedings. Indeed, even where NGOs might intervene in the case, this may not succeed in bringing greater transparency to the actual workings and resolution of the dispute. As more and more investor-state lawsuits are seen to touch upon human rights issues, the question of transparency comes increasingly to the fore.
– Issues of transparency and the right to receive information
Even where observers are convinced that important human rights issues may be implicated in the international legal system which protects foreign direct investment, it is not always straightforward for such interested parties to monitor—much less have a stake or influence in—this system. The procedures for resolving investment treaty disputes do not provide for the same levels of transparency seen in other areas of international law, particularly those in the human rights system.
Even dedicated investigation and reporting will only bring a certain degree of information to light. Some arbitrations remain confidential because the parties wish to keep it this way, or because they are forbidden from speaking publicly about the cases. There are two factors which accommodate this confidentiality. First, the treaties themselves rarely stipulate that investor-state arbitrations be open to public scrutiny. Although Canada and the United States have embraced a move towards openness in their recent investment treaties, many other governments have not followed suit. Thus, it often falls to the given procedural rules that govern a given dispute—for example, the World Bank’s ICSID rules or the United Nation’s ad-hoc UNCITRAL rules —to stipulate how open the proceedings shall be. To a considerable degree, these procedural rules have not been designed with transparency or openness in mind. Indeed, in the case of the UNCITRAL rules, and the rules of certain Chambers of Commerce, these rules were tailored to private commercial arbitration between two parties, where confidentiality has long been a major consideration. Although the ICSID system offers the greatest level of transparency thanks to a public docket listing all cases being arbitrated at the Centre, ICSID proceedings are themselves closed to the public unless both parties desire openness. What’s more, a move several years ago to bring greater transparency to ICSID proceedings was watered down in the face of objections from many ICSID stakeholders.
To the extent that governments continue to negotiate investment treaties which draw upon procedural rules that provide for scant levels of transparency, the resolution of investor-state disputes will continue to take place (to varying degrees) in the shadows.
Beyond any changes to future investment treaties or arbitration rules in favor of more transparency, there is also the potential for concerned citizens to challenge the confidentiality of arbitration proceedings through access to information laws or human rights mechanisms. For example, Margarete Stevens, a former Acting General Counsel at the ICSID, observed at a 2007 conference that a recent ruling of the Inter-American Court of Human Rights might be a harbinger of future efforts to force governments to reveal more about any foreign investor lawsuits which they may be facing.138 Stevens noted that the Republic of Chile was held in violation of Article 13 of the American Convention on Human Rights by virtue of its failure to provide the Chilean public with fuller information about a major forestry development project in that country, including contracts concluded with foreign investors. Indeed, in that case, Claude-Reyes et al. v. Chile, the Inter-American Court affirmed that the right to freedom of information encompasses a right to seek and receive information.139 Moreover, the Court noted the importance of information-disclosure to the functioning of democracy:
In this regard, the State’s action should be governed by the principles of disclosure and transparency in public administration that enable all persons subject to its jurisdiction to exercise the democratic control of those actions, and so that they can question, investigate and consider whether public functions are being performed adequately.140
In holding that Chile was not justified in withholding information from members of the public, the Court also noted that this failure to disclose information hindered the public’s ability to exert democratic supervision or “control” over the actions of the state.
“…claims might be presented to human rights fora, including regional human rights courts, in an effort to construe the lack of transparency surrounding investor-state arbitration as a violation of a state’s human rights obligations.”
As Margarete Stevens has suggested, it is easy to envision alleged human rights violations which might be raised by media organizations, non-governmental organizations, or concerned citizens, in relation to the non-disclosure by a given government of relevant information about foreign investor arbitrations mounted against that government. This might take the form of requests made of governments for disclosure of any and all arbitrations (including those whose existence is unknown to the public). Indeed, in the North American context there have been some uses of access-to-information laws in order to access information about investor-state lawsuits whose existence was known, but whose details were confidential. In the Loewen v. United States case, a NAFTA tribunal acknowledged that governments may have legal obligations to release documents related to arbitral proceedings. This acknowledgement came after the US Government approached the tribunal following a Freedom-of-Information request filed by US non-governmental organizations.141 Additionally, claims might be presented to human rights fora, including regional human rights courts, in an effort to construe the lack of transparency surrounding investor-state arbitration as a violation of a state’s human rights obligations.
At the same time, as interested parties make demands of governments—including through access to information laws or human rights complaint channels—they may also continue to petition arbitrators directly for greater access to information about a pending case. These requests may be couched in express human rights terms, thus inviting arbitrators themselves to rule on the meaning and relevance of such human rights norms.
36- This section draws extensively from an earlier Rights & Democracy publication, Robert Howse and Makau Mutua, Protecting Human Rights in a Global Economy: Challenges for the World Trade Organization (2000: International Centre for Human Rights and Democratic Development), pp. 8-10, available at www.dd-rd.ca/site/_PDF/publications/globalization.
37- Howse and Mutua, p. 9.
38- See Peterson and Grey, 2003.
39- Southern Pacific Properties (Middle East) Limited v. Egypt, ICSID Case no. ARB/84/3, Award of May 20, 1992, 32 I.L.M. 933 (1993), par. 154.
40- Ibid., par. 190-191.
41- See for example, Howard Mann, “International Investment Agreements, Business and Human Rights: Key issues and opportunities,” International Institute for Sustainable Development, 2008, pp. 25-29.
42- See Moshe Hirsch, “Interactions between investment and non-investment obligations in international investment law,” in Schreuer, Christoph, Muchlinski, Peter, Ortino, Federico,eds., Oxford Handbook of International Investment Law (Oxford University Press, 2008), pp. 154-181.
43- Marius Emberland, The Human Rights of Companies: Exploring the Structure of ECHR Protection (Oxford University Press), 2006.
44- See for example, the legal tack of investors in the Russian oil company, Yukos, who have pursued investment treaty claims, as well as claims before the European Court of Human Rights. In another instance, in the Limited Liability Company AMTO v. Ukraine arbitration, the arbitrators make clear in their final award that the claimants also mounted a case against the Ukraine at the European Court of Human Rights. See the Amto award at ita.law.uvic.ca/documents/AmtoAward.pdf.
45- Mondev International Ltd. v. USA, ICSID Case no. ARB/(AF)/99/2, Award of Oct 11, 2002, par. 144, available on-line at ita.law.uvic.ca/documents/Mondev-Final.pdf.
46- Mondev Award, par. 141-144.
47- Técnicas Medioambientales Tecmed, S.A. v. United Mexican States (Case no. ARB(AF)/00/2), Award of May 29, 2003, at par. 116-122, available on-line at ita.law. uvic.ca/documents/Tecnicas_001.pdf.
48- Azurix Corp. v. Argentina, ICSID Case no. ARB/01/12, Award of July 14, 2006, par. 311-12, available on-line at ita.law.uvic.ca/documents/AzurixAwardJuly2006.pdf.
49- The Rompetrol Group N.V. v Romania, Decision on Respondent’s Preliminary Objections on Jurisdiction and Admissibility, April 18, 2008, available on-line at ita.law.uvic.ca/documents/RomPetrol.pdf.
50- Rompetrol v. Romania, Decision of April 18, 2008, par. 109.
51- Ioan Michula and Others v. Romania, ICSID Case no. ARB/05/20, Decision on Jurisdiction and Admissibility, September 24, 2008, par. 88.
52- Ibid., par. 87.
53- CMS Gas Transmission Company v. Argentina, ICSID Case No. ARB/01/8, Award of May 12, 2005, paras. 114-121. (This cursory discussion is perplexing insofar as the tribunal seems to dismiss concerns raised as to the impact of the Argentine financial crisis on the human rights of Argentine citizens by means of the following syllogism: property is a human right; investment treaties protect property; therefore, investment treaties are treaties which protect rather than harm human rights.)
54- Grand River Enterprises v. United States of America, Claimant’s Memorial, July 10, 2008, available on-line at www.state.gov/documents/organization/107684.pdf.
56- Even some not-for-profit organizations arguably enjoy some protection—at least in relation to overseas activities which are focused on economic development and arguably “investments”—under these investment treaties. Thus, for example, if a human rights organization were to finance and operate an overseas project designed to further women’s social and economic livelihoods, these activities might be protected from interference by state authorities. On the potential (and limits) for not-for-profit organizations to benefit from investment treaty protections, see Luke Eric Peterson and Nick Gallus, “International Investment Treaty Protection of Not-for-Profit Organizations,” International Center for Not-for-Profit Law Working Paper, May 2008, available on-line at www.icnl.org/knowledge/pubs/BITNPOProtection2.pdf.
57- Tokios Tokeles v. Ukraine, ICSID Case no. ARB/02/18, Award of July 26, 2007 par. 123. On the facts of the case, the arbitrators were not convinced that Ukraine had conspired to punish a Lithuanian-owned publisher for political reasons. However, the tribunal stated unequivocally that such behaviours, if proven, would breach the treaty.
58- For further analysis see: Memo on freedom of expression and investment treaties, prepared for Vale-Columbia Center for Sustainable Investment, on file with author.
59- Compañía de Aguas del Aconquija S.A. and Vivendi Universal v. Argentine Republic (ICSID Case no. ARB/97/3); Aguas Provinciales de Santa Fe, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Interagua Servicios Integrales de Agua, S.A. v. Argentine Republic (Case no. ARB/03/17); Aguas Cordobesas, S.A., Suez, and Sociedad General de Aguas de Barcelona, S.A. v. Argentine Republic (Case no. ARB/03/18); Aguas Argentinas, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. v. Argentine Republic (Case no. ARB/03/19); Azurix Corp. v. Argentine Republic (ICSID Case no. ARB/01/12); Aguas del Tunari S.A. v. Republic of Bolivia (ICSID Case no. ARB/02/3); Azurix Corp. v. Argentine Republic (ICSID Case no. ARB/03/30); SAUR International v. Argentine Republic (ICSID Case no. ARB/04/4); Anglian Water Group v. Argentine Republic, UNCITRAL arbitration filed in 2003; Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania (ICSID Case no. ARB/05/22); Impregilo S.p.A. v. Argentine Republic (ICSID Case no. ARB/07/17); Urbaser S.A. and Consorcio de Aguas Bilbao Biskaia, Bilbao Biskaia Ur Partzuergoa v. Argentine Republic (ICSID Case no. ARB/07/26).
60- Op. cit.
61- General Comment no. 15, (2002), January 20, 2003; the Committee on Economic, Social and Cultural Rights held in its General Comment that a right to water is implicit in Articles 11 and 12 of the ICESCR and explicit in Article 14(2) of the Convention on the Elimination of Discrimination Against Women and Article 24(2) of the Convention on the Rights of the Child.
62- General Comment no. 15, par. 24
63- See for example the discussion raised in Peterson and Gray.
64- Suez, Socieded General de Aguas de Barcelona S.A., and Vivendi Universal S.A. v. Argentine Republic, ICSID Case No. ARB/03/19 and Anglian Water Group v. Argentine Republic (UNCITRAL arbitration proceeding). Ultimately, human rights considerations may be relevant to a number of the known water services arbitrations, however particular focus was devoted to the Aguas Argentinas arbitration as this dispute was examined in volume one of the Rights & Democracy Investing in Human Rights project.
65- Suez, et al. v. Argentina, ICSID Case no. ARB/03/19, Order in response to a petition for transparency and participation as amicus curiae, May 19, 2005, available on-line at: ita.law.uvic.ca/documents/suezMay19EN.pdf
66- Suez, Sociedad General de Aguas de Barcelona S.A., and Vivendi Universal S.A. v. Argentine Republic, ICSID Case no. ARB/03/19, Decision on Jurisdiction, August 3, 2006.
67- Counter-Memorial of Argentine Republic in ICSID Case No. ARB/03/19, December 8, 2006, paragraph 794, on file with author.
68- Ibid., par. 796.
69- Ibid., par. 800.
70- Ibid.; (no view is taken in this paper as to the competing factual allegations of Argentina and the foreign investors).
71- Ibid., 842-43.
72- Rejoinder of the Argentine Republic in ICSID Case No. ARB/03/19, August 17, 2007, par. 1003-5, on file with author.
74- Reply of Suez, et al., in ICSID Case no. ARB/03/19, par. 321, on file with author.
75- Reply of Suez, et al., par. 387-403.
76- Counter-Memorial of Argentine Republic in ICSID Case No. ARB/03/19, par. 864.
77- Ibid., par. 893-94.
78- Counter-Memorial of Argentine Republic, op. cit., at par. 892-93.
79- For background see: “Argentina prevails in large part in financial crisis dispute with insurance company,” by Luke Eric Peterson, Investment Arbitration Reporter, Sept.8, 2008, available on-line at www.iareporter.com/Archive/IAR-09-08-08.pdf.
80- Counter-Memorial of the Argentine Republic, paras 1011-25 and 1059-61.
81- Reply of Suez et al., par. 508.
82- Sempra v. Argentina, ICSID Case No. ARB/02/16, Award of September 28, 2007, par. 331.
83- Ibid., par. 332.
84- Continental Casualty Company v. Argentina, ICSID Case No. ARB/03/9, Award of Sept.5, 2008, par. 180-81.
85- Op. cit., par. 181.
86- Op. cit., par. 180.
87- Counter-Memorial of Argentine Republic in Continental Casualty v. Argentine Republic, ICSID Case no. ARB/03/9, par. 851, on file with author, paras 568-69.
88- Counter-Memorial of Argentine Republic in Continental Casualty v. Argentine Republic, ICSID Case no. ARB/03/9, par. 851, on file with author.
89- Centro de Estudios Legales y Sociales (CELS), Asociación Civil por la Igualdad y la Justicia (ACIJ), Consumidores Libres Cooperativa Ltda. De Provision de Servicios de Acción Comunitaria, Unión de Usarios y Consumidores, and Center for International Environmental Law (CIEL).
90- Amicus Curiae Submission in ICSID Case no. ARB/03/19, April 4, 2007, available at www.ciel.org/Tae/ICSID_Amicus_5Apr07.html. Indeed, some of the research for that brief was undertaken by two of the NGOs during their work on a human rights impact assessment of the project, supported by Rights & Democracy.
91- Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania, ICSID Case no. ARB/05/22, Award of July 24, 2008, available online at ita.law.uvic.ca/ documents/Biwateraward.pdf.
92- At par. 434.
93- This section draws on a previously unpublished memo prepared for Rights & Democracy on some of the potential human rights implications of the Canada-China bilateral investment treaty negotiations.
94- See for example the case of Platform Artze fur das Leben v. Austria, May 25 1988, Application No. 10126/82, European Court of Human Rights, in particular see the discussion of this case by Article 19 at www.article19.org.
95- UNCTAD, Bilateral Investment Treaties in the Mid-1990s (United Nations: New York and Geneva, 1998), p. 55.
96- See Compañía de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic, ICSID Case no. ARB/97/3, Award of August 20, 2007, par. 7.4.13 – 7.4.17.
97- For a narrower reading of the “full protection and security” standard see BG Group Plc v. Argentine Republic, (UNCITRAL arbitration proceeding), Award of Dec. 24, 2007, par. 326, available on-line at ita.law.uvic.ca/documents/BG-award_000.pdf.
98- See for example the stringent terms of investor-state contracts concluded in relation to the Chad-Cameroon pipeline project, in Amnesty International UK, Contracting Out of Human Rights: The Chad-Cameroon pipeline project, pp. 25-26.
99- For more on investor-state contracts generally, see Andrea Shemberg, “Stabilization clauses and human rights,” Draft of March 11, 2008, available on-line at: www.reports-and-materials.org; as well as IIED, Lifting the lid on foreign investment contracts: the real deal for sustainable development, October 2005.
100- See Rights & Democracy, “Mining a Sacred Mountain: Protecting the Human Rights of Indigenous Communities,” 2006 Case Study in Human Rights Impact Assessment Project, available online at www.dd-rd.ca/site/_PDF/publications/globalization/hria/Philippines%20-REPORT.pdf; see also Amnesty International, Policing to Protect Human Rights: A Survey of Police Practice in Countries of the Southern African Development Community, 1997-2002, Amnesty International Publications 2002; for a notable example of an investment project where serious breaches have occurred see: Amnesty International, India: The ‘Enron project’ in Maharashtra – Protests Suppressed in the Name of Development, July 17 1997, ASA 20/031/1997, available on-line at www.amnesty.org/library/Index/engASA200311997.
101- Wendy Stueck, “Clashes reported in Guatemala over Glamis mining project,” The Globe and Mail, January 13, 2005.
102- Mark Stevenson, “Gold Rush runs into opposition over mines, cyanide,” The Associated Press, April 12, 2005.
103- Tecmed v. Mexico, Award of May 29, 2003, op. cit., par. 175.
104- Tecmed v. Mexico Award, par. 177.
105- Noble Ventures Inc. v. Romania, ICSID Case no. ARB/01/11, Award of October 12, 2005, par. 160-67, available on-line at ita.law.uvic.ca/documents/Noble.pdf.
106- Plama Consortium Limited v. Republic of Bulgaria, ICSID Case no. ARB/03/24, Award of August 27, 2008.
107- Arthur Appleton and Bernd U. Graf, “Freedom of Speech and Assembly Versus Trade and Transit Rights: Roadblocks to EU and MERCOSUR Integration,” 34 Legal Issues of Economic Integration, no. 3, pp. 255-81, 2007.
108- Notice of Intent to Submit a Claim to Arbitration, Railroad Development Corporation v. The Republic of Guatemala, March 13, 2007, available on-line at dace.mineco.gob.gt/dacepdf/doc1exp16dace07.pdf.
109- Non-Party Submission, Glamis Gold Ltd. v. United States of America, Submission of the Quechan Indian Nation, p. 9.
110- Op. cit. pp. 9-10.
111- Case of the Sawhoyamaxa Indigenous Community v. Paraguay, Judgment of March 29, 2006
112- Sawhoyamaxa Judgment, par. 135.
113- Ibid., par. 140.
114- See the report of the FIAN, et al., Globalizing Economic and Social Rights by strengthening extraterritorial state obligations, February 2005, available on-line at www.eed.de/fix/files/doc/eed_fian_bfdw_case_studies_human_rights_05_eng.pdf.
115- A number of Paraguay’s investment treaties can be viewed on UNCTAD’s website (www.unctad.org/iia).
116- For some examples, see the South Africa-Korea BIT which speaks of “market value”; or the Germany-Namibia BIT which speaks of the value of an investment immediately prior to the expropriation; or the UK-Paraguay BIT which speaks of the market value immediately before the expropriation took place.
117- See discussion in Luke Eric Peterson, “South Africa’s Bilateral Investment Treaties: Implications for Development and Human Rights,” South African Institute for International Affairs briefing paper, published in Frederich Ebert Stiftung Dialogue on Globalization Occasional Papers series, no. 26, November 2006, pp. 25-27.
118- CDSE v. Costa Rica, Award of February 17, 2000, ICSID Case no. ARB/96/1, par. 69-71 available on-line at ita.law.uvic.ca.
120- CME v. Czech Republic, Separate Opinion On the Issues at the Quantum Phase, Ian Brownlie, March 14, 2003, available on-line at ita.law.uvic.ca.
121- Ibid., par. 31
122- See Prof. Zachary Douglas’s remarks at a conference on Investment Law Arbitration and Human Rights, March 21, 2007, at American University, webcast available on-line at www.wcl.american.edu/arbitration/webcasts.cfm.
123- Holy Monastaries v. Greece, Judgment of December 9, 1994, Series A, No. 301-A (1995) 20 EHRR 1m as quoted in Clare Ovey and Robin C.A. White, Jacobs & White: The European Convention on Human Rights, Fourth Edition, Oxford University Press, 2006, p. 363.
124- An English language commentary on the draft model investment treaty, wherein the endorsement of the ECHR approach, was available on-line as of June 10, 2008, at www.regjeringen.no/nb/dep/nhd/dok/Horinger.
125- “UK farm group settles BIT claim over Venezuelan land seizures and invasions,” Investment Treaty News, April 11, 2006, available on-line at www.iisd.org.
126- “Absentee landlords to challenge Namibian Government over Expropriation,” BBC Monitoring International Reports, Dec. 2, 2005; “Namibian President to make landmark visit to Germany,” Agence France Presse, By Brigitte Weidlich, Nov. 26, 2005; “German Farmers Challenge Namibia Land Reform, International Arbitration Considered,” Investment Treaty News, May 31, 2006, available on-line at www.iisd.org.
127- Gunther Kessl, et al. v. Ministry of Lands and Resettlement, et al., Judgment of March 6, 2008, par. 106-07.
128- “Swiss investor prevailed in 2003 in confidential BIT arbitration over South Africa land dispute”, Investment Arbitration Reporter, Oct. 22, 2008, available on-line at www.iareporter.com/Archive/IAR-10-22-08.pdf.
129- Bernadus Henricus Funnekotter and others v. Republic of Zimbabwe, Request for Arbitration submitted to International Centre for Settlement of Investment Disputes, May 30, 2003, p.14 (on file with author).
130- Compare, for example, the treaty practice of Canada or the United States with that of the United Kingdom or the Netherlands. By and large, the former countries include exceptions which limit the obligation to provide favourable treatment to foreigners in relation to special programs or policies targeted at disadvantaged persons or groups.
131- See Article 15.8 of the New Zealand-Thailand Closer Economic Partnership Agreement of 2005, available on-line at www.mfat.govt.nz/Trade-and-Economic-Relations.
132- The Economist, “South African Mining: the Diggers are Restless,” June 22-28, 2002
133- Time Magazine, Welcome to the Club, May 29, 2005, available on-line at www.time.com/time/europe/html/050606/africa/story.html.
134- Luke Eric Peterson, South Africa’s Bilateral Investment Treaties: Implications for Development and Human Rights, Frederich Ebert Stiftung Occasional Papers Series, no. 26, November 2006, available on-line at library.fes.de/pdf-files/iez/global/04137.pdf.
135- Some South African investment treaties do contain (slender) human rights exceptions—preventing foreign investors from claiming that they have been treated less favourably than HDSA persons.
136- “South Africa’s bilateral investment treaties, Black Economic Empowerment and mining: a fragmented meeting?”, Matthew Coleman and Kevin Williams, Business Law International, vol. 9, no. 1, pp. 56-94.
137- Ibid., par. 11.19.
138- Remarks at a conference on Investment Law Arbitration and Human Rights, March 21, 2007, at American University, webcast available on-line at www.wcl.american.edu/arbitration/webcasts.cfm.
139- Claude-Reyes, et al. v. Chile, Judgment of September 19, 2006, Inter-American Court of Human Rights; the NGO CELS, which contributed a human rights impact assessment to an earlier phase of the Rights & Democracy project on Investing in Human Rights submitted an amicus curiae brief in the Claude-Reyes case.
140- Par. 86.
141- For more information on this episode see OECD Investment Committee, Transparency and Third Party Participation in Investor-State Dispute Settlement Procedures, pp 6-7, available on-line at www.oecd.org/dataoecd/25/3/34786913.pdf.