Civil Society and Investor–state Dispute Settlement: Assessing the Social Dimensions of Investment Disputes in Latin America

Abstract

Investor-state dispute settlement (ISDS) has come to the forefront of debate over corporate rights in the contemporary era. While proponents laud ISDS as a neutral and efficient means of dispute resolution, critics claim that it shields transnational corporations from the oversight of national legal systems while enhancing their ability to interfere in host state policy matters. Moreover, because dispute settlement is carried out in international tribunals, ISDS is argued to disable citizen-driven politics. Governments have called on arbitration bodies to enhance the transparency of ISDS procedures and open spaces for civil society involvement.This reflects a desire to increase the legitimacy of ISDS in the face of mounting contestation. In this paper, I examine the multiple ways in which civil society actors intervene in investor-state arbitration inside and outside of formal channels. I focus specifically on two disputes involving foreign investors active in the water and hydrocarbons sectors of Argentina and Ecuador respectively. I find that political pressure exerted by civil society actors influenced government decisions to break with investment rules and helped shape government positioning within arbitral processes. Civil society actors must therefore be recognised as important participants in investorstate disputes.

Constraints and incentives in the investment regime: How bargaining power shapes BIT reform

“…3 Unilateral termination of BITs can also send a hostile signal to the partner state, who might interpret the exit as defection from a cooperative equilibrium, damaging the reputation of the state as a reliable partner in international cooperation (Axelrod, 1984;Axelrod & Keohane, 1985;Oye, 1986). Furthermore, the unilateral withdrawal from BITs and ISDS arbitration centers such as the International Centre for Settlement of Investment Disputes (ICSID) became adopted by left-wing governments in Latin America through the 2000s (Calvert, 2018a). Any other states also considering taking unilateral action regarding BITs risk becoming associated with such governments, which used harsh rhetoric against the investment treaty regime, ISDS, and multinational companies (Gray, 2013).…”

“…Governments might also have ideological attitudes towards international regimes which can explain their actions towards BIT commitments, and differ how responsive they are to civil society sentiment as a result (Calvert, 2018a;Montal, 2019). Some states can gain domestic political benefits from taking a strong stand against ISDS, such as in the Ecuador's leftwing leadership through the two Correa governments (Conaghan, 2008;Becker, 2013).…”

Amérique latine, l’ALBA-TCP et l’arbitrage transnational en matière d’investissement: la fondation d’une mosaïque de résistance

“…Durant ces quinze dernières années, l'Amérique latine a été un bassin de résistance vis-à-vis de l'arbitrage transnational, et du CIRDI en particulier (Calvert, 2018). Plusieurs États ont dénoncé le CIRDI et se sont retirés du système d'arbitrage transnational (Gaillard, 2007).…”