Global Public Goods, Global Commons, Fundamental Values and International Investment Law: the Responses of the New Generation of International Economic Law Agreements and Investment Arbitration Proceedings

The group of five articles forming this special section of Brill Open Law is a selection of the papers presented at the Workshop on \u201cGlobal Public Goods, Global Commons, Fundamental Values: the Responses of International Economic Law,\u201d organized by the Interest Group (ig) on International Economic Law (iel) of the European Society of International Law (esil) in Naples on September 6th, 2017. The mission of the esil iel ig is to promote research in the field of International Economic Law, endorsing exchange of views among young and experienced scholars, as well as supporting debate and discussion with practitioners, lawyers and officials from international organizations and national administrations working in the fields of international trade and investments and International Financial Law. The articles appearing in this Section are all devoted to International Investment Law, the first work being the opening speech to the Naples Workshop by Professor Pavel \u160turma on \u201cPublic Goods and International Investment Law: Do the New Generation of iias Better Protect Human Rights?\u201d, while the subsequent four essays are all dedicated to the recent case-law developed in international arbitration proceedings dealing with the right to water and the right to human health. Professor \u160turma provides a synthetic effective reconstruction of the way in which International Investment Law now interacts with International Human Rights Law. Starting from the description of the situation in the first generation of Bilateral Investment Treaties (bits), establishing the rights of investors and the obligations of States, the author then goes on exposing the differences with human rights treaties, and analyzes the significant developments in relation to the new generation of investment treaties. The relevant clauses concerning the exceptions to investment protection, or the right to regulate of the host State, expressed by the new generation of International Investment Agreements (iias), such as the eu-Canada Comprehensive Economic Trade Agreement (ceta), the now-abandoned Transatlantic Trade and Investment Partnership (ttip), or the bit models of Norway, Canada, Austria, or the Czech Republic, are therefore considered, stressing their relevance to guide interpreters and arbitrators when having to combine investment protection with human rights. Due attention is then given to the role of private parties with reference to human rights, underlining the introduction of the concept of Corporate Social Responsibility (csr) in the new iias encouraging economic operators to conduct their business in compliance with the relevant international soft law codes inspired by the principle of sustainable development \u2013 requiring that economic development be constantly combined with environmental protection and social progress. The article also emphasizes the role that the principle of systemic integration in treaty interpretation, as codified in Article 31, para. 3(c) of the Vienna Convention on the Law of Treaties, may play when arbitrators have to combine human rights, environmental protection and bits, illustrating the relevance of the case-law of international investment disputes in order to strike a fair balance between non-economic considerations and investors\u2019 rights. The analysis by Pavel \u160turma opens the door to the subsequent four articles. Professor Ursula Kriebaum, in her work on \u201cThe Right to Water Before Investment Tribunals,\u201d provides a complete overview of the case-law developed in international investment arbitration proceedings with reference to the right to water. She presents the constantly rising relevance that the human right to water has been given by the Arbitral Tribunals while discussing the respect of the investors\u2019 prerogatives enshrined in the various bits invoked by the claimants. Professor Kriebaum thus emphasizes that the Arbitrators never denied that they have an obligation to take into consideration human rights while interpreting bits. On the contrary, international awards concluded that national measures introduced in order to protect the environment against the pollution of water resources, and the termination of concessions as a consequence of inadequate performance of an investment contract on the part of the investor involved in water distribution services cannot be automatically considered as infringements of bits by the States benefitting from the foreign investments. Furthermore, Ursula Kriebaum stressed the highly relevant developments reached by the Arbitral Tribunal in the Urbaser case, where it was held in an obiter that investors have to abstain from acts which may violate the human right to water by endangering access to water. The Urbaser case is at the center of the analysis by Dr Edward Guntrip and Dr Patrick Abel. In his work on \u201cPrivate Actors, Public Goods and Responsibility for the Right to Water in International Investment Law: An Analysis of Urbaser v. Argentina,\u201d Dr Guntrip considers how the Arbitral Tribunal allocated responsibility for compliance with the right to water between the host State and the foreign investor while being asked to settle the dispute over privatized water services in Greater Buenos Aires. The author underlined that the Arbitrators chose to follow the scheme defined by the un Committee on Economic, Social and Cultural Rights (cescr). Pursuant to that, human rights obligations in relation to economic, social and cultural rights, which include the right to water, have to be broken down into obligations to respect, protect and fulfil. Edward Guntrip criticizes the Tribunal\u2019s decision to limit the duties of the investor to the obligation to respect only, i.e. not to interfere with the enjoyment of the right to water. In fact, such a limitation makes the human right to water vulnerable for the right holders trying to hold a foreign investor responsible. Dr Patrick Abel manifests further perplexities on the counterclaim raised by Argentina in relation to the existence of an international investor obligation under the human right to water, for the first time accepted as possible in international investment arbitration proceedings. While stressing the importance of the novelty of the Urbaser award -i.e. the possibility of holding investors accountable for a breach of an international human rights obligation- Patrick Abel highlights the flaws in the legal reasoning of the Tribunal, which he considers unclear in the way it perceives the integration of human rights obligations as a source of international law external to the relevant bit invoked in the investment arbitration. Last but not least, Professor Pei-Kan Yang, in his article on \u201cThe Margin of Appreciation Debate over Novel Cigarette Packaging Regulations in Philipp Morris v. Uruguay,\u201d explores the legal reasoning of the Arbitrators in the case brought by the famous tobacco multinational company against the Latin-American State. The majority of the Tribunal, applying the \u201cmargin of appreciation\u201d doctrine as originally developed by the European Court of Human Rights (ECtHR), found that Uruguay\u2019s tobacco legislation did not violate the Switzerland \u2013 Uruguay bit as the Latin-American State enjoyed a substantial degree of discretion in choosing the regulatory means to achieve its public health objectives among various options of effective measures. Pei-Kan Yang analyzes both the majority conclusions and the dissenting opinion by Gary Born, and identifies lacunae in each of the two approaches, suggesting an adjustment of the concept of the margin of appreciation in order to better accommodate the right to regulate of the host State for public health purposes and balance it against the investor\u2019s private rights. We do hope that the proposed set of articles may represent a welcome perspective of analysis of some recent developments concerning treaties and case-law in the field of International Investment Law. Enjoy the reading

Private actors, public goods and responsibility for the right to water in international investment law: an analysis of Urbaser v. Argentina

International investment law balances public and private interests within the broader framework of international law. Consequently, when water supply services, which constitute a public good, are privatized and operated by foreign investors, questions arise regarding whether foreign investors could be held responsible for the right to water under international law. This article considers how the tribunal in Urbaser v. Argentina allocated responsibility for compliance with the right to water between the host State and the foreign investor when resolving a dispute over privatized water services. It highlights how the tribunal in Urbaser v. Argentina supports different understandings of public and private based on whether the human rights obligation is framed in terms of the duty to respect or protect. It is argued that the tribunal's rationale overcomplicates the process of allocating responsibility for violations of the human right to water when water supply services have been privatized

The contested legitimacy of investment arbitration and the human rights ordeal

As attested by a growing body of literature1 and an increasing number of claims before arbitrators, the human rights ordeal now facing investment arbitration is the result of increasing unease generated by the contemporary quasi-­‐worldwide foreign investment regime (...)

Repensar el requisito de realizar una inversión en concordancia con el derecho doméstico como derecho sustantivo y pretensión accionable para los Estados bajo los BITs

This paper challenges one of the most traditional notions in international investment arbitration, which is that host states don’t have any substantive rights under the BIT’s framework. This work’s thesis is that the current BIT framework actually grants the host state a substantive right, and therefore a cause of action in the investment arbitration system. This right emanates from the requirement that the investment must be in accordance with the host state’s law. The paper explains that there’s a line of both BITs and ICSID cases that hold the requirement of compliance with the host state’s laws as autonomous, and that this autonomy imports a substantive right for the host states grounded solely in the BITs. This idea is also supported by the spirit and objectives of both the ICSID Convention and the BITs.Este artículo desafía una de las nociones más tradicionales del Arbitraje Internacional de Inversiones: que los estados que reciben las inversiones no tienen derechos sustantivos bajo el sistema de los BITs. La tesis de este trabajo es que la actual red de BITs otorga a los Estados receptores un derecho sustantivo y así una pretensión accionable en Arbitraje Internacional de Inversiones. Este derecho emana del requisito consistente en que la inversión debe realizarse conforme al derecho del estado receptor. Existe una línea tanto de BITs como de casos seguidos en ICSID que sostiene que la exigencia de cumplimiento con el derecho del Estado receptor es autónoma, y que esta autonomía confiere un derecho sustantivo para los estados receptores consagrado en los BITs. Esta idea también se apoya en el espíritu y los objetivos tanto de la Convención de ICSID como de los BITs

Alternatives to Investor-State Dispute Settlement

Proponents often explain support for international investment agreements (IIAs) for their ability to: (1) promote investment flows; (2) depoliticize disputes between investors and states; (3) promote the rule of law; and (4) provide compensation for certain harms to investors – objectives of varying degrees of importance to multinational enterprises, home states, host states, and other stakeholders. While each of these objectives may seem desirable, it is important to consider what exactly they mean and whether IIAs are optimally tailored to achieve them. This two-part series aims to consider just that. In the first blog installment, we asked of investor-state dispute settlement: What Are We Trying to Achieve? Does ISDS Get Us There? To follow up, in this Working Paper we’ve considered a number of alternative tools that, when used alone or in combination, might better serve the above objectives as well as the goals of sustainable development more generally