March 28, 2013
Recap of International Law Journal Panel: Environmental, Human Rights, and Development Issues in International Investment Arbitration
Posted by Cara Solomon
A few weeks ago, as part of the 2013 Harvard International Law Journal symposium, Tyler moderated a panel entitled “Addressing Environmental, Human Rights and Development Issues in International Investment Arbitration.” Cecilia Vogel wrote a recap of the panel, which ILJ recently posted on its site. Thanks to ILJ for letting us repost it here:
ILJ’s 2013 symposium wrapped up with a lively discussion about the role of environmental and human rights in international investment arbitration. Tyler Giannini, Clinical Professor of Law for the Human Rights Program and International Human Rights Clinic at HLS, moderated the panel in the form of a question and answer session. The panelists, hailing from across the globe and with experience as counsel, arbitrators, advisers, and academics, represented a variety of international viewpoints on the topic.
Professor Giannini began the conversation by asking panelists to address how the international investment regime relates to or differs from the human rights regime. Professor Joost Pauwelyn explained that protections for international investors and human rights do share a common root, although investment protection began first. Both regimes seek the protection of rights against abuse. However, Professor Pauwelyn drew the distinction that the investment regime’s purpose—to facilitate investment—is more utilitarian. The investment regime only protects certain classes of people, i.e. alien investors of certain nationalities, while we are all born into human rights. Unlike the rights of international investors, human rights are enforced in a court system and their enforcement internationally first requires exhaustion of domestic remedies. Professor Pauwelyn also asked: With an eye to determining who can waive investor rights, are investor rights individual rights, like human rights, or are they derivative rights from the state? Finally, Professor Pauwelyn expressed his concern that small investors cannot adequately access protection in the costly investment regime and that this may negatively impact the system’s credibility.
Panelists next addressed the role of human rights and environmental law in the current investment regime. Professor Attila Tanzi explained that respondent states have been reluctant to raise environmental law and human rights arguments out of the concern that they might enhance the position of potential claimants before domestic courts. According to Professor Tanzi, the current trend in international investment arbitrations with respect to human rights and environmental law is “compatibility in separation,” meaning it is the obligation of the state to carry out both. Professor Tanzi hopes that investment arbitrations can move toward “compatibility in integration.” Mr. Gómez-Pinzón responded that, as an arbitrator, he would apply environmental or human rights law if it was applicable to the case. On the other hand, professor Boisson de Chazournes called for political elites negotiating investment treaties to take a greater role in incorporating human rights and environmental law because arbitrators have little opportunity to maneuver to include those areas of law in the current regime. Professor Pauwelyn responded that avenues to incorporate more human rights and environmental law in the investment regime already exist, such as Article 42 of the ICSID Convention (referring “to such rules of international law as may be applicable”) but that arbitrators need greater expertise in this area of law.
Addressing the role of soft law human rights and environmental law instruments in foreign private investment, Professor Boisson de Chazournes questioned the legal standing and role of these instruments in the interpretation of customary international law, given they do not reflect state practice but private corporate practice. She suggested that they can perhaps be complementary tools to assist filling in international law gaps. Professor Pauwelyn looked to arbitrators current references to the International Bar Association guidelines as a potential model for the incorporation of human rights and environmental law soft law instruments into the investment regime.
Finally, commenting on the future of investment law’s relationship to environmental and human rights, Mr. Gómez-Pinzón predicted that the evolution would be slow and cautious, with the lead taken by states negotiating bilateral investment treaties. There has already been a greater tendency for transparency and amicus participation in arbitrations, but private companies will likely resist increasing transparency. Judge Brower, the symposium’s keynote speaker, with the last word, cautioned the panel against engaging in a theoretical discussion of a problem that no one has found to yet exist. Noting that the international investment regime has been evolving for years, he encouraged adopting a long view of the system and emphasized that if anything, loss of investor confidence, would be the ruin of the system.