Investment Treaty Arbitration in Latin America

Abstract

This study analyzes variations in the incidence of state involvement in investment treaty arbitration in Latin America and the Caribbean over the 1987–2014 period. Its main contributions are fourfold. First, by focusing on the balance of incentives and opportunities facing political leaders and foreign investors, the study establishes a new basis for understanding the reasons actors opt for the risks and uncertainties of international arbitration instead of resolving international investment disputes via alternative means. Second, by restricting the focus of research to the Latin American region, the study is able to move beyond the analysis of relatively time-invariant structural and institutional conditions and crude indicators to address the role played by the preferences of political actors. Third, by disaggregating disputes by sector of investment, the analysis documents the variable role of ideology and electoral incentives in investment treaty arbitration. Finally, by underlining the distinctiveness of the Latin American experience with investment treaty arbitration, the study offers new insights into the global backlash against investment treaty arbitration, which has gone farther in the region than anywhere else. Overall, the results underline the potential payoffs of breaking down the international experience with investment treaty arbitration into regional patterns to obtain a deeper and more granular understanding of the political economy of investor-state dispute settlement.

TD 2671 - As relações Brasil-África e o regime internacional de investimentos: uma análise do ACFI do Brasil com Angola e Moçambique

“…Esse aspecto é particularmente claro no que tange à solução de controvérsias entre investidor e Estado, em que o investidor estrangeiro pode recorrer ao Ciadi e escapar aos foros nacionais (Morosini e Ratton, 2018, p. 3;Morosini e Xavier Junior, 2015, p. 426). Segundo Remmer (2019), a arbitragem sobre tratados internacionais só pode ser iniciada pelo investidor, e Estados não podem legalmente declinar a participação em uma arbitragem. Dessa forma, investidores recorrem à arbitragem para desafiar medidas governamentais que ameaçam suas expectativas de lucro, em muitos casos, visando prevenir mudanças políticas, desestimular outros Estados a adotar medidas similares (Remmer, 2019, p. 796).…”

“…Nos casos concluídos até 2019 (61 casos), os países africanos foram obrigados pelos árbitros -ou como resultado de uma conciliação -a pagar aos investidores US$ 4,6 bilhões até aquele 13. Para Remmer (2019), o alto envolvimento de países da América Latina e Caribe em disputas com investidores reflete a natureza dos investimentos estrangeiros na região, que foram fortemente canalizados para a extração de recursos naturais, particularmente petróleo, gás e mineração, bem como serviços públicos e outros investimentos em infraestrutura, nos quais os riscos financeiros (e também sociais e ambientais) dos conflitos são geralmente altos. Por sua vez, o Leste Asiático, onde o investimento estrangeiro foi direcionado principalmente para a produção industrial de cadeias de valor globais, tem experimentado relações muito mais harmoniosas entre investidores estrangeiros e atores estatais (Ibid, p. 79).…”

Developing Human Right Norms for Investor-State Arbitration: The Needed Panacea for Environmental Injustice?

“…4 The flip side is that, sometimes, in an attempt to protect foreign investments, municipal government policies 5 and citizens' human rights are thereby sacrificed. 6 This state of affairs has prompted States and other stakeholders to engage in concerted efforts at looking for alternatives to ISA in all directions -including the use of local remedies only 7 and diplomatic protection, 8 which both have severe pitfalls. 9 Diplomatic protection, as innocent as it sounds, did result to war in extreme cases, making it most undesirable.…”

“…It is important to note, however, that ISDS is wider in scope than ISA and that ISA is actually subset under ISDS. 3 Karen L. Remmer, 'Investment Treaty Arbitration in Latin America' (2019) 54(4) Latin American Research Rev 795, 796; see also Anna Joubin-Bret, 'UNCITRAL ISDS Reform: Mandate, Process and Reform Solutions' (27 April 2021) <https://afaa.ngo/page-18097/10368672> accessed 6 June 2021 4 Remmer (n 3) 796 citing Todd Weiler, 'Philip Morrison vs. Uruguay: An Analysis of Tobacco Control Measures in the Context of International Investment Law' (2010) 5 Joubin-Bret (n 3) 6 See 'Mandates of the Working Group on the Issue of Human rights and Transnational Corporations and other Businesses' (7 March 2019) 4 7 See, for example, the South African Protection of Investment Act 2015, s 13 8 will hamper foreign direct investment (FDI) inflows required for economic development. 1 Although some approaches by States in pursuing the ISDS reform agenda (use of local remedy only and diplomatic protection) are unsuitable for international investment disputes as mentioned above, the agitation for reform has scored a high point in awakening the need to take public interest into account in ISA proceedings, which has already resulted so far 2 3 Similarly, there is a developing jurisprudence premised on the argument that ISA arbitral tribunals should act as agents not only for the parties that appointed them but also for the global community at large.…”

“…4 In pursuing the argument that ISA tribunals should also act as agents for the larger community, human right norms have steadily been creeping into ISA. 5 The main objective of this work, therefore, is to examine the connection between human rights and ISA, 6 especially those that are treaty-based, with particular focus on how these evolving human right norms in ISA would produce the needed panacea for environmental injustice.…”