Webinar: Civil Society Submissions in Investor-State Arbitration: Do They Work?

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Written by: Amanda Eller

On February 6th, 2018, the Columbia Center on Sustainable Development partnered with the International Institute for Environment and Development to host a webinar discussing how civil society groups can address human rights issues, environmental issues, and other community concerns in investor-state arbitrations.[1] This webinar was specifically aimed at civil resource projects in low- and middle-income countries.

With over 3,000 investment treaties entered into since the 1990s, International Investment Law has quickly become one of the dominant means of establishing and regulating the relationships between foreign investors and host states, particularly in the Extractive Industries Sector.[2] Investment treaties typically provide standards of treatment that each state must abide by, and parties often consent to dispute resolution through an international arbitral tribunal within the treaty.[3] Investment treaties can limit a host state’s power to enact or enforce laws and policies that may affect the investment’s viability and/or success and thus have been used by foreign investors to challenge host state actions under the premise that these actions negatively affected the investor or investment.[4] In the context of the Extractive Industries Sector, these challenges, or even the threat of a challenge, can limit or curtail entirely host states’ efforts to mitigate the environmental and social harms resulting from natural resource extraction. [5]

Because of the serious implications investment treaties can have for host states, this webinar was aimed at increasing understanding of International Investment Law in order to enable civil society groups to help host states preserve their ability to tackle environmental and social issues that may arise without running afoul of investor-state arbitration rulings or treaty standards. This is a tricky task because there is no system of precedent within the international arbitration procedure used for investment treaty disputes, so tribunals’ interpretations of the law lack consistency. [6] The Webinar emphasized that this is a topical issue because in the extractive industries sector there is a growing number of arbitrations, especially in the mining, petroleum, and, more recently, agribusiness areas.[7] Additionally, there is now a lively and growing debate over potentially reforming the investor-state arbitration process, with the European Union recently proposing a multilateral commission to review the procedures. [8]

Investor-state arbitration proceedings are typically framed around the foreign investor and the host state, but underneath this dispute, there are usually issues between the investor and local groups who have either claimed rights to land in the area or have raised concerns about the impacts of the investment. This webinar focused on this type of secondary dispute through a discussion about a dispute between indigenous Peruvian community groups and a foreign investor, Bear Creek Mining Corporation, over the environmental and social concerns resulting from extraction at the Santa Ana Mine Site.[9] Dr. Carlos Lopez, the senior legal advisor on business and human rights at the International Commission of Jurists, shared his experience of working with the civil society group DHUMA to make a third-party submission in the Bear Creek v. Peru case.[10]

Bear Creek Corp is a Canadian investor that acquired mineral exploration rights from a Peruvian citizen and a subsequent governmental in 2011.[11] This decree was met with strong opposition from community groups that worried about the environmental and social impacts of the mining activity due to the fragility of the soil and the fact that the mine was close to a lake from which many streams that the communities depend on for water originate.[12] These groups expressed their concerns to the community and government, and when they felt ignored, they resorted to a general strike, public demonstrations, and road blockades, which forced the government to cancel the original mining license.[13] As a result, Bear Creek filed a suit to the ICSID Arbitral Tribunal in 2014.[14]

DHUMA was originally approached to testify as witnesses for Peru but preferred to act independently as Amicus Curiae by submitting a brief to the arbitral tribunal. The submission highlighted Bear Creek’s efforts, or, more accurately the lack thereof, to inform and consult local communities about the environmental effects of the extraction; and, it highlighted Bear Creek’s failure to carry out the environmental and social impact assessments required under Peruvian law.[15] The brief application was made to the tribunal in accordance with ISCID procedural rules and was discretionally accepted because it provided a “special and distinct” perspective, which in this case was the communities’ perspectives.[16]

The submission of an Amicus Curiae brief offers a way for third parties to intervene in investor-state disputes and raise environmental and social concerns that are typically ignored in the proceedings. However, third-party groups wishing to make a submission face some challenges. Many third-party groups are unaware that they even have the ability to intervene, and beyond that, there is a lack of clarity about the procedure and requirements necessary for civil society groups (and other third-party groups) to acquire the ability to intervene.[17] Intervention can also be cost prohibitive. For example, the costs of translation here needed to be partially covered by another NGO.[18]

Dr. Lopez offered several lessons he learned from his submission in the Bear Creek case that can help other third-party groups hoping to intervene in a dispute proceeding. He emphasized that local, grassroots organizations with first-hand knowledge of the events and facts relating to the disputed issue have an advantage when it comes to making an impactful submission. This is because Dr. Lopez believes that the best submission is one that presents a “distinct perspective” that the tribunal will consider useful, which is generally derived from the direct and immediate knowledge that the community holds.[19] Additionally, working with another group that has knowledge of the international arbitration system is beneficial when it comes to the procedural elements of the submission.[20]

Dr. Lopez also presented potential reforms to the arbitral process that he believes will facilitate civil society group intervention. The first issue he raised is that an Amicus Curiae brief from a “non-disputing” party is a limited way for community groups to participate, but communities are not really “limited third parties” because their interests and livelihoods are directly impacted by the investment activity. Dr. Lopez believes that the system should allow community groups to intervene as additional non-disputing parties to the proceeding.[21] This would give groups and appropriate platform and allow access to proceeding hearings and documents in real time. Additionally, financial support for community groups that wish to intervene will be necessary, perhaps after certain threshold requirements to demonstrate a legitimate community interest are met.[22] Finally, investment protection agreements should clearly articulate investor obligations with respect to human rights, environmental standards, and the observation of processes relating to community consultation and consent.[23] By making these changes, perhaps civil society groups can begin to adequately address the issues that arise when foreign investors commission natural resource extraction projects in low- and middle-income communities.








[1]Webinar: Civil Society Submissions in Investor-State Arbitration: Do they work? (IIED Legal Tools for Citizen Empowerment Webinar Feb. 6, 2018, 12:00-13:30 GMT).

[2] Lise Johnson & Jesse Coleman, Briefing Notes: International Investment Law and the Extractive Industries Sector, Columbia Center on Sustainable Investment, Jan. 2016, at 1, available at http://ccsi.columbia.edu/files/2016/01/2016-01-12_Investment-Law-and-Extractives_Briefing-Note_1.pdf.

[3] IIED Webinar (2018), supra Note 1.

[4] Johnson & Coleman, supra at 1.

[5] Id.

[6] Id. at 4.

[7] IIED Webinar (2018).

[8] Id.

[9] Id.

[10] Id.

[11] Id.

[12] Id.

[13] Id.

[14] See generally Bear Creek Mining Corporation v. Republic of Peru, ICSID Case No. ARB/14/2

[15] A copy of DHARMA and Dr. Lopez’s submission is available at https://www.italaw.com/sites/default/files/case-documents/italaw7517.pdf.

[16] IIED Webinar (2018).

[17] Id.

[18] Id.

[19] Id.

[20] Id.

[21] Id.

[22] Id.

[23] Id.