Local resistance: at the margins of investment law

ABSTRACT

If states all over the world have signed on to investment treaty obligations, they often have done so without knowledge or interest in resolving tensions existing between local communities and foreign investors. In cases where those relations have turned toxic, proximity can turn out to be a matter of life and death. International investment law, as presently organized, is not disposed to hear the voices of those who experience environmental or economic degradation at the hands of foreign investors who disregard local impacts. The venues in which investment laws are constructed turn out to be uninviting spaces for local communities and their allies. This essay argues that, rather than engaging in international legal arenas where such voices are unwelcome, it may be more worthwhile to work in alliance with local and transnational civil society actors to steer state power to reverse the dangers arising from the overprotection of investors.

KEYWORDS:

• Investment law
• local communities
• resistance

Acknowledgements

I am grateful to Nicolás Perrone for introducing me to local community activists and to both he and to anonymous reviewers for helpful comments.

Disclosure statement

No potential conflict of interest was reported by the author(s).

Notes

1 Pohl (2018:, p. 19) summarizes the state of the empirical evidence and concludes that ‘the vast majority of the existing studies do not offer a satisfying answer to the question whether IIAs influence capital allocation in treaty partners.’

2 Maldesarrollo (bad development) fails to improve basic human needs and diminishes economic livelihoods (Unceta, 2014).

3 On how investment law reproduces old forms and effects associated with colonialism and imperialism, see Schneiderman (2022).

4 According to an OECD study (2014] at 10), mention of sustainable development or to ‘responsible business conduct’ has risen to more than 75 per cent of the BITs signed between 2008-2013.

5 For example, see the evidence gathered in Grisel (2020).

6 Highly influential has been scholarship by Perrone (2016) and Perrone (2019). See also Cotula and Schröder (2017) and Cotula and Perrone (2020).

7 There is a minority stream of critical scholarship that proves the exception to dominant trendlines. See, for example, books by Sornarajah (2015), Van Harten (2020), Sattorova (2018), Perrone (2021).

8 This is the principal argument made in Schneiderman (2013).

9 Generally, see Mair (2013), discussed further in Schneiderman (2018) at 553-557.

10 On the ambiguous role of states in Schneiderman (2013) at 12-13.

11 Many scholars either provide legal support to, or seek to join the ranks of, lawyers and arbitrators. On the close relationship between these three constituencies see Puig (2014) and Hirsch (2020).

12 On the negligible contribution of investment treaties to the economic development of host countries, see the empirical evidence summarized in Bellak (2015); Brada et al. (2021); Danzman (2019); and Pohl (2018) in fn. 1.

13 The Colombian government is described as ‘very supportive of foreign investment’ having ‘the best investor protection in Latin America’ at http://www.grancolombiagold.com/operations-and-projects/colombia/default.aspx (last accessed 1 February 2021). In January 2021, the Colombian mining agency approved a 30-year extension of Marmato’s mining licence. See ‘Caldas Gold Receives Technical Approval for Marmato Mining Title Extension’ (18 January 2021) at https://www.caldasgold.ca/news-and-investors/press-releases/press-release-details/2021/Caldas-Gold-Receives-Technical-Approval-for-Marmato-Mining-Title-Extension/default.aspx (last accessed 1 February 2021).

14 Statements by community representatives at the ‘Local Communities and Extractive Industries Workshop,’ Externado University, Bogotá, Colombia (1 August 2018).

15 http://www.grancolombiagold.com/operations-and-projects/colombia/default.aspx (last accessed 1 February 2021). On the intellectual origin of this workshop see Perrone (2016).

16 Statements by community representatives at the ‘Local Communities and Extractive Industries Workshop,’ Externado University, Bogotá, Colombia (1 August 2018).

17 ‘World Bank Divests from Eco Oro Minerals and Mining in Colombian Páramos’ (20 December 2016) at https://miningwatch.ca/news/2016/12/20/world-bank-divests-eco-oro-minerals-and-mining-colombian-p-ramos (last accessed 27 February 2021).

18 Eco Oro Minerals Corp. v. Republic of Colombia, Request for Arbitration, ICSID Case No. ARB/16/41 (8 December 2016) https://www.italaw.com/sites/default/files/case-documents/italaw9443.pdf (last accessed 31 July 2020); Galway Gold Inc. v. Republic of Colombia, Solicitud de Arbitraje, ICSID Case No. ARB/18/13 (21 March 2018) at http://icsidfiles.worldbank.org/icsid/ICSIDBLOBS/OnlineAwards/C7149/DS13353_Sp.pdf (last accessed 31 July 2020); Red Eagle v. Colombia, Request for Arbitration, ICSID Case No. ARB/18/12 (21 March 2018) https://www.italaw.com/sites/default/files/case-documents/italaw10949.pdf (last accessed 31 July 2020). These disputes were prompted by the Colombian Constitutional Court ruling C-035/16 (Galway Gold and Eco Oro) and T-361/17 (Red Eagle).

19 As Born and Forrest (2019) at 639 put it, ‘parties cannot be compelled to arbitrate with strangers, with whom they have not agreed to arbitrate their disputes.’

20 See the representative interventions discussed in Schadendorf (2015).

21 This, admittedly, is an anecdotal observation.

22 See the workplan at UNCITRAL (2021a) and the revised workplan, which purports to consider ‘cross-cutting issues’ (e.g., exhaustion of local remedies, calculation of damages, third-party participation, and regulatory chill) in UNCITRAL (2021b). The revised workplan has been described by Sachs et al. (2021) as revealing ‘an unwillingness to seriously and fully deal with concerns about how ISDS may negatively impact domestic law and institutions, chill or unduly raise or shift the cost of public interest regulation or undermine the rights of non-parties.’

23 Again, see Grisel (2020).

24 This section draws on Schneiderman (2008).

25 The groups seeking non-disputing party status, most of whom were involved in the petition for divestment by the World Bank’s IFC (mentioned above), were: Comité para la Defensa del Agua y el Páramo de Santurbán, the Center for International Environmental Law (CIEL), the Asociación Interamericana para la Defensa del Ambiente (AIDA), MiningWatch Canada, Institute for Policy Studies (IPS) - Global Economy Project, and the Centre for Research on Multinational Corporations (SOMO).

26 In Art. 2201(3), ensuring that ‘nothing in this Agreement shall be construed to prevent a Party from adopting or enforcing measures necessary [e.g.] … For the conservation of living or non-living exhaustible natural resources.’

27 Amplifying the tribunal decision in Santa Elena (2000: para. 72): ‘no matter how laudable and beneficial to society as a whole … where property is expropriated, even for environmental purposes, whether domestic or international, the state’s obligation to pay compensation remains.’’

28 Lazzarato (2012) at 46. This is an argument developed at length in in Schneiderman (2022), c. 4.

29 ‘[I]nvestment treaties provide sanctions for non-compliance in individual cases but, and perhaps more importantly, they provide a signal for the domestic policy discussion on how economic governance should be’ admits Wälde (2007:, p. 80).

30 Jessop (2002:, p. 213) writes that ‘[u]nless or until supranational political organization acquires not only governmental powers but also some measure of popular-democratic legitimacy, the national state will remain a key political factor as the highest instance of formal democratic political accountability.’

31 South Africa, Protection of Investment Act, Act No. 22 of 2015 and Carim (2016).

32 For instance, in Bear Creek it only was the dissent of Phillipe Sands that took into account the harms caused to the local community by the foreign investor, having the effect of reducing damages owed. See Bear Creek (2017) ‘Partial Dissenting Opinion’ at para. 39.

33 Brazil, for instance, was the largest magnet for inward foreign investment in Latin America from 1993–2012 but had no investment treaty with investor-state dispute settlement in force. See Fernades de Andrade and Justino de Oliveira (2013, p. 87).

Additional information

Notes on contributors

David Schneiderman

David Schneiderman is Professor of Law and Political Science (courtesy) at the University of Toronto where he teaches and writes in the areas of constitutional law and international investment law. He has been visiting Professor of Law at Gothenburg University, University of Stockholm, Tel Aviv University, Hebrew University of Jerusalem, Georgetown University, Columbia University and the New School for Social Research. He is the author of over 80 articles and book chapters and also the author or editor of 12 books, including Constitutionalizing Economic Globalization: Investment Rules and Democracy's Promise (2008), Resisting Economic Globalization: Critical Theory and International Investment Law (2013) and Red, White and Kind of Blue? The Conservatives and the Americanization of Canadian Constitutional Culture (2015). His next book is entitled Investment Law’s Alibis: Colonialism, Imperialism, Debt and Development and is forthcoming with Cambridge University Press.