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Business and Human Rights in International Investment Law: Empirical Evidence

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Handbook of International Investment Law and Policy

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Abstract

This chapter looks at the interaction between human rights and international investment law, with a particular focus on the extent to which internationally recognized principles of business and human rights have been reflected in international investment law. Namely, the chapter examines how the State duty to protect human rights and the corporate responsibility to respect human rights have been incorporated in recent international investment agreements. The chapter finds that recent international investment agreements reflect a growing willingness on the part of States to address human rights protection in the context of foreign investment, primarily through the inclusion of human rights recommendations and/or obligations that apply to States and investors alike. The chapter further considers the consequences for investors in the event of non-compliance with human rights recommendations and/or obligations in international investment agreements.

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Notes

  1. 1.

    See, for example, the United Nations open-ended intergovernmental working group on a legally binding instrument on transnational corporations and other business enterprises with respect to human rights. https://www.ohchr.org/en/hrbodies/hrc/wgtranscorp/pages/igwgontnc.aspx

  2. 2.

    See, for example, UNCITRAL WG III on Investor-State Dispute Settlement Reform. https://uncitral.un.org/en/working_groups/3/investor-state. See also Chaisse and Donde (2018) The state of investor-state arbitration – a reality check of the issues, trends, and directions in Asia-Pacific. Int Lawyer 51(1):47–67

  3. 3.

    See Chapter [X] by Professor Ernst-Ulrich Petersmann, which provides a comprehensive examination of some important international investment cases involving questions of human rights.

  4. 4.

    UN Human Rights Committee, General Comment No. 31 “The Nature of the General Legal Obligation Imposed on States Parties to the International Covenant on Civil and Political Rights” (2004)

  5. 5.

    UN Human Rights Committee, General Comment No. 31 “The Nature of the General Legal Obligation Imposed on States Parties to the International Covenant on Civil and Political Rights” (2004)

  6. 6.

    See X and Y v. the Netherlands, ECtHR, Judgment, 26 March 1985; SERAC and the CESR v. Nigeria, ACHPR, Decision, 27 May 2002; Velásquez-Rodriguez v. Honduras IACtHR, Judgment, 29 July 1988; Ergi v. Turkey, ECtHR, Judgment, 28 July 1998.

  7. 7.

    UNGPs, Principle 1

  8. 8.

    UNGPs, Principle 2

  9. 9.

    UNGPs, Principle 25

  10. 10.

    United Nations, Office of the High Commissioner for Human Rights (2012) The corporate responsibility to respect human rights – an interpretative guide, p 7

  11. 11.

    Recommendation CM/Rec(2016)3 of the Committee of Minister to Member States on human rights and business. Adopted 2 Mar 2016

  12. 12.

    Office of the High Commissioner of Human Rights, “State national action plans.” http://www.ohchr.org/EN/Issues/Business/Pages/NationalActionPlans.aspx. Accessed 13 Aug 2019

  13. 13.

    For example, the European Parliament passed Regulation (EU) 2017/821 of the European Parliament and of the Council of 17 May 2017 laying down supply chain due diligence obligations for Union importers of tin, tantalum and tungsten, their ores, and gold originating from conflict-affected and high-risk areas

  14. 14.

    Dodd-Frank Wall Street Reform and Consumer Protection Act 2010 (California); Modern Slavery Act 2015 (UK); Loi n° 2017-399 du 27 mars 2017 relative au devoir de vigilance des sociétés mères et des entreprises donneuses d’ordre (France)

  15. 15.

    UN Committee on the Rights of the Child (CRC), General comment No. 16 (2013) on State obligations regarding the impact of the business sector on children’s rights, 17 April 2013, CRC/C/GC/16, para. 62

  16. 16.

    UNGPs, Principles 11 and 17

  17. 17.

    Report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises, A/HRC/11/13, 22 April 2009

  18. 18.

    UNGPs, Principle 13

  19. 19.

    Commentary to the UNGPs, HR/PUB/11/04, p. 15

  20. 20.

    UNGPs, Principle 29

  21. 21.

    See Ford (2015) Business and human rights: bridging the gap. Chatham House research paper, pp 5–6 for an analysis of the impact of the UNGPs.

  22. 22.

    OECD Guidelines for Multinational Enterprises, Chapter on Consumer Interests, para. 3

  23. 23.

    The International Finance Corporation Performance Standards on Environmental and Social Sustainability, 2012; the International Standards Organisations, ISO 26000 – Social Responsibility

  24. 24.

    US-Chile FTA, signed 6 June 2013, entered into force 1 January 2004. Another early IIA to include reference to corporate social responsibility is the 2008 EU-Cariforum Economic Partnership Agreement, signed 15 October 2008, entered into force 1 January 2009.

  25. 25.

    Canada-Colombia FTA, signed 21 November 2008, entered into force 15 August 2011); Canada-Serbia BIT, signed 1 September 2014, entered into force 27 April 2015; Canada-Mongolia BIT, signed 8 September 2016, entered into force 24 February 2017; Canada-Guinea BIT, signed 27 May 2015, entered into force 27 March 2017; Canada-Burkina Faso BIT, signed 20 April 2015, entered into force 11 October 2017; Canada-Cȏte D’Ivoire BIT, signed 30 November 2014, entered into force 14 December 2015; Canada-Mali BIT, signed 28 November 2014, entered into force 8 June 2016; Canada-Benin BIT, signed 9 January 2013, entered into force 12 May 2014; Canada-Cameroon BIT, signed 3 March 2014, entered into force 16 December 2016; Canada-Senegal BIT, signed 27 November 2014, entered into force 5 August 2016.

  26. 26.

    TPP-11, opened for signature 8 March 2018, entered into force for the initial six ratifying States on 31 October 2018. The initial six ratifying States are Mexico, Japan, Singapore, New Zealand, Canada, Australia, and Vietnam.

  27. 27.

    Argentina-Japan BIT, signed 1 December 2018, Article 17

  28. 28.

    Dutch Model BIT, Article 7(2)

  29. 29.

    Dutch Model BIT, Article 7(3)

  30. 30.

    EU-Japan FTA, signed 17 July 2018, entered into force 1 February 2019, Article 16.5

  31. 31.

    EU-Japan FTA, Article 16.3(4)

  32. 32.

    CETA, Article 22.3(2)(b). A similar provision is found in Article 17 of the Argentina-UAE BIT, signed 6 November 2018, not yet entered into force

  33. 33.

    Argentina-UAE BIT, signed 6 November 2018, Article 17

  34. 34.

    See Monebhurrun (2017) Mapping the duties of private companies in international investment law. Braz J Int Law 14:50–71, pp 55–57

  35. 35.

    EU-Japan FTA, Article 16.2(1)

  36. 36.

    CETA, Articles 23.2 and 24.3; SADC Model BIT, Article 22; 2015 Brazil Model Cooperation and Facilitation Investment Agreement Brazil Model BIT, Article 16(2)

  37. 37.

    EU-Japan FTA Article 16.2(2); CETA, Articles 23.4 and 24.5; Dutch Model BIT, Article 6(2) and 6(4)

  38. 38.

    See, for example, Canada-Slovak Republic BIT, signed 20 July 2010, entered into force 14 March 2012

  39. 39.

    ECOWAS Supplementary Act A/SA.3/12/08 Adopting Community Rules on Investment and the Modalities for their Implementation (ECOWAS Investment Act), signed 19 December 2008, entered into force 19 January 2009. ECOWAS Act on Investments, Articles 21(1), 21(2) 21(4)

  40. 40.

    Morocco-Nigeria BIT, Article 15(6)

  41. 41.

    Morocco-Nigeria BIT, Article 15(5) (emphasis added)

  42. 42.

    ECOWAS Investment Act, Article 20; Morocco-Nigeria BIT, Article 15(3)

  43. 43.

    ECOWAS Investment Act, Article 21(3)

  44. 44.

    ECOWAS Investment Act, Article 21(5); Morocco-Nigeria BIT, Article 15(6)

  45. 45.

    ICSID Convention, Article 25

  46. 46.

    Morocco-Nigeria BIT, Article 20

  47. 47.

    Dutch Model BIT, Article 7(4)

  48. 48.

    SADC Model BIT, Article 17.1

  49. 49.

    UN Working Group, Revised Draft of Legally Binding Instrument, in International Human Rights Law, the Activities of Transnational Corporations and other Business Enterprises, 16 July 2019, Article 7

  50. 50.

    ECOWAS, Investment Act, Article 29

  51. 51.

    SADC Model BIT, Article 17.2

  52. 52.

    See Monebhurrun (2017) Mapping the duties of private companies in international investment law. Braz J Int Law 14:50–71, pp 57–59

  53. 53.

    Qatar-Argentina BIT, Article 12

  54. 54.

    India-Belarus BIT, signed 24 September 2018, Article 12

  55. 55.

    Morocco-Nigeria BIT, Article 24(1)

  56. 56.

    Morocco-Nigeria BIT, Article 24(2)

  57. 57.

    Morocco-Nigeria BIT, Article 24(3)

  58. 58.

    Brazil Model BIT, Article 14(1)

  59. 59.

    Brazil Model BIT, Article 14(2)

  60. 60.

    Brazil-UAE BIT, signed 15 March 2019; Brazil-Guyana BIT, signed 13 December 2018

  61. 61.

    The ICJ has recognized that the United Nations is a subject of international law that is “capable of possessing international rights and duties, and that it has capacity to maintain its rights by bringing international claims.” Reparation for Injuries Suffered in the Service of the United Nations, Advisory Opinion: I.C.J Reports 1949, p. 179. See also Interpretation of the Agreement of 25 March 1951 between the WHO and Egypt, Advisory Opinion of 20 December 1980, I.C.J. Reports 1980, p. 73, in which the ICJ recognized that international organizations were subject to international law obligations; see also Article 5 of the Rome Statute of the International Criminal Court 1998, which grants jurisdiction in certain circumstances over individuals for genocide, crimes against humanity, war crimes, and the crime of aggression.

  62. 62.

    See Higgins (1994) Problems and process: international law and how we use it. Clarendon Press, New York, p 50; Zerk (2006) Multinationals and corporate social responsibility: limitations and opportunities in international law. CUP, Cambridge, p 74; McCorquodale (2006) Beyond state sovereignty: the international legal system and non-state participants. Rev Colomb Derecho Int 8:103–159, p 124; Alvarez (2011) Are corporations ‘subjects’ of international law. Santa Clara J Int Law 9:1–35, pp 8–9; see also Clapham (2006) Human rights obligations of non-state actors. OUP, Oxford, p 82 in which he considers that corporations have limited legal personality.

  63. 63.

    The International Chamber of Commerce was granted observer status by the General Assembly on 13 December 2016.

  64. 64.

    1948 Universal Declaration of Human Rights, Preamble

  65. 65.

    Henkin (1999) The Universal Declaration at 50 and the challenge of global markets. Brooklyn J Int Law 25:17–26, p 25

  66. 66.

    See, for example, the 2003 UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with Regard to Human Rights.

  67. 67.

    Urbaser S.A. and Consorcio de Aguas Bilbao Bizkaia, Bilbao Biskaia Ur Partzuergoa v. The Argentine Republic (Urbaser v. Argentina), ICSID Case No. ARB/07/26

  68. 68.

    Urbaser v. Argentina, Award, para. 1156. For a detailed analysis of this award, see Qian (2018) Challenges of water governance (and privatization) in China-Traps, Gaps, and Law. Georgia J Int Comp Law 47(1):49–91

  69. 69.

    Urbaser v. Argentina, Award, para. 1206

  70. 70.

    Urbaser v. Argentina, Award, para. 1212

  71. 71.

    Urbaser v. Argentina, Award, para. 1206

  72. 72.

    Urbaser v. Argentina, Award, para. 1210

  73. 73.

    ECOWAS Investment Act, Article 11(1)

  74. 74.

    SADC Model BIT, Article 11

  75. 75.

    Dutch Model BIT, Article 7(1)

  76. 76.

    Intra-MERCOSUR Cooperation and Facilitation Investment Protocol, signed 7 April 2017

  77. 77.

    PAIC, Article 22(2) and 22(3)

  78. 78.

    PAIC, Article 23(1) and 23(2)

  79. 79.

    ECOWAS Investment Act, Article 12(1)

  80. 80.

    ECOWAS Investment Act, Article 12(2)

  81. 81.

    ECOWAS Investment Act, Article 14(4) and 16(1)

  82. 82.

    ECOWAS Investment Act, Article 14

  83. 83.

    SADC Model BIT, Articles 14 and 15

  84. 84.

    ECOWAS, Article 14(2).

  85. 85.

    SADC Model BIT Commentary, p. 36

  86. 86.

    See, for example, Copper Mesa Mining Corporation v. Republic of Ecuador, PCA No. 2012-2, Award, 15 March 2016, para. 5.65.

  87. 87.

    See, for example, Middle East Cement Shipping and Handling Co. S.A. v. Arab Republic of Egypt, ICSID Case No. ARB/99/6, Award, 12 August 2002, para. 167.

  88. 88.

    The ECOWAS Investment Act, however, does not provide for ISDS – see Article 8(6).

  89. 89.

    Pan-African Investment Code, Article 43(1) (in the context of a counter-claim); SADC Model BIT, Article 19.1.

  90. 90.

    For example, the ECOWAS Investment Act, Article 11(1); SADC Model BIT, Article 11; Dutch Model BIT, Article 7(1); Intra-MERCOSUR Cooperation and Facilitation Investment Protocol; PAIC, Article 22(2)

  91. 91.

    See de Brabandere (2018) Human rights and international investment law. Grotius Centre working paper series, vol 75, pp 1–23 who considers that reference to domestic law in the IIA incorporates that law into the treaty and thereby makes it applicable in an investment dispute, p. 12.

  92. 92.

    See, for example, Hesham Talaat M. Al-Warraq v. Indonesia, UNCITRAL, Final Award, 15 December 2014, paras 645–646: Niko Resources (Bangladesh) Ltd. v. People’s Republic of Bangladesh et al., ICSID Case No. ARB/10/11 and ICSID Case No. ARB/10/18, Decision on Jurisdiction, 19 August 2013, para. 477; Glencore Finance (Bermuda) Limited v. Plurinational State of Bolivia, PCA Case No. 2016-39, Procedural Order No. 2.

  93. 93.

    Phoenix Action, Ltd. v. Czech Republic, ICSID Case No. ARB/06/5, Award, 15 April 2009, para. 78. For a detailed commentary on this award, see Chaisse (2015) The issue of treaty shopping in international law of foreign investment – structuring (and restructuring) of investments to gain access to investment agreements. Hast Bus Law Rev 11(2):225–306

  94. 94.

    Less extreme cases of improper conduct, such as obtaining investments through fraud, have also been considered inadmissible as a matter of public policy. See Churchill Mining PLC and Planet Mining Pty Ltd v. Republic of Indonesia, ICSID Case No. ARB/12/14 and 12/40, Award, 6 December 2016, para. 528.

  95. 95.

    See, for example, Bernhard von Pezold and others v. Republic of Zimbabwe, ICSID Case No. ARB/10/15, Award, 28 July 2015, para. 420; Gustav F W Hamester GmbH & Co KG v. Republic of Ghana, ICSID Case No. ARB/07/24, Award, 18 June 2010, para. 127; Vladislav Kim and others v. Republic of Uzbekistan, ICSID Case No. ARB/13/6, Decision on Jurisdiction, 8 March 2017, paras 374-377.

  96. 96.

    Tribunals have also considered the legality of an investment in the absence of an explicit provision. See Plama Consortium Ltd. v. Republic of Bulgaria., ICSID Case No. ARB/03/24, Award, 27 August 2008, para. 138; Phoenix Action, Ltd. v. Czech Republic, ICSID Case No. ARB/06/5, Award, 15 April 2009, para. 101; Gustav F W Hamester GmbH & Co KG v. Republic of Ghana, ICSID Case No. ARB/07/24, Award, 18 June 2010, para. 124.

  97. 97.

    See Gustav F W Hamester GmbH & Co KG v. Republic of Ghana, ICSID Case No. ARB/07/24, Award, 18 June 2010, para. 124.

  98. 98.

    This conclusion is largely based on the tribunal’s reasoning in Churchill Mining PLC and Planet Mining Pty Ltd v. Republic of Indonesia, ICSID Case No. ARB/12/14 and 12/40, Award, 6 December 2016, para. 494.

  99. 99.

    See Baltag (2018) Human rights and environmental disputes in international arbitration. Kluwer Arbitration Blog. http://arbitrationblog.kluwerarbitration.com/2018/07/24/human-rights-and-environmental-disputes-in-international-arbitration; Kriebaum (2018) Human rights and international investment law. In: Radi Y (ed) Research handbook on human rights and investment. Edward Elgar, Cheltenham, pp 13–40; de Brabandere (2018) Human rights counterclaims in investment treaty arbitration. Grotius Centre working paper series, vol 78, pp 1–16

  100. 100.

    ECOWAS Investment Act, Article 18(5); TPP-11, Article 9.19(2); SADC Model BIT, Article 19.2; PAIC, Article 43

  101. 101.

    Urbaser v. Argentina, Award, para. 1143 (emphasis added)

  102. 102.

    Spyridon Roussalis v. Romania, ICSID Case No. ARB/06/1, ICSID Case No ARB/06/1, Award, 7 December 2011, para. 869

  103. 103.

    Biloune and Marine Drive Complex Ltd. v. Ghana Investments Centre and the Government of Ghana, UNCITRAL, Award on Jurisdiction and Liability, 27 October 1989, p. 202

  104. 104.

    Urbaser v. Argentina, Award, para. 1143

  105. 105.

    ICSID Convention, Articles 25 and 46

  106. 106.

    UNCITRAL Rules, Article 21(3)

  107. 107.

    See section above “Investor Obligations”.

  108. 108.

    Burlington Resources Inc. v. Republic of Ecuador, ICSID Case No. ARB/08/5 (formerly Burlington Resources Inc. and others v. Republic of Ecuador and Empresa Estatal Petróleos del Ecuador (PetroEcuador), Decision on Counterclaims, 7 February 2017, para. 74

  109. 109.

    See de Brabandere (2018) Human rights and international investment law. Grotius Centre working paper series, vol 75, pp 1–23 who considers that reference to domestic law in the IIA incorporates that law into the treaty and thereby makes it applicable in an investment dispute, p. 12.

  110. 110.

    Bernhard von Pezold and Others v. Republic of Zimbabwe, ICSID Case No. ARB/10/15, Procedural Order No. 2, 26 June 2012, para. 57

  111. 111.

    The Morocco-Nigeria BIT (which has been signed, but is not yet in force) and the SADC Model BIT

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  1. Université de Paris 1 (Panthéon-Sorbonne), Hong Kong, Hong Kong

    Isabella Seif

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  1. Isabella Seif
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Correspondence to Isabella Seif .

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Editors and Affiliations

  1. Faculty of Law, The Chinese University of Hong Kong, Shatin, Hong Kong

    Julien Chaisse

  2. Professor of International Law; and Director of the Research and Innovation Theme in Democratic Citizenship, University of Portsmouth, Portsmouth, UK

    Leïla Choukroune

  3. Institute of Malaysia and International Studies, National University of Malaysia, Bangi, Selangor, Malaysia

    Sufian Jusoh

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Seif, I. (2020). Business and Human Rights in International Investment Law: Empirical Evidence. In: Chaisse, J., Choukroune, L., Jusoh, S. (eds) Handbook of International Investment Law and Policy. Springer, Singapore. https://doi.org/10.1007/978-981-13-5744-2_26-1

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