Skip to main content

Advertisement

Log in

International Investment Agreements and the Escalation of Private Power in the Global Agri-Food System

  • Original Paper
  • Published:
Journal of Business Ethics Aims and scope Submit manuscript

Abstract

Using food regime analysis, this paper critically analyzes how corporate actors amass, secure and apply power in the global agrifood system through International Investment Agreements (IIAs). IIAs are a key enabler of increasing corporate power in the agrifood system. We focus on three sets of investment provisions in IIAs: (a) the stringent enforceability mechanism of the investor-state dispute settlement (ISDS) system, (b) the expansion of the concept of expropriation, and (c) limitations or prohibitions on host countries to impose performance requirements on foreign investors. We argue that these provisions compromise fairness in the international economic system. Attracted by promises of technology transfer, economic growth and employment, host states often prioritize policies that favor foreign investors even if such policies compromise domestic policy space. We provide analysis and examples of escalating corporate power at different stages of the industrial and transgenic model of agriculture.

This is a preview of subscription content, log in via an institution to check access.

Access this article

Price excludes VAT (USA)
Tax calculation will be finalised during checkout.

Instant access to the full article PDF.

Institutional subscriptions

Similar content being viewed by others

Notes

  1. Note the terminology “International Investment Agreements” is used to refer to bilateral investment treaties and international economic agreements with investment provisions, including free trade agreements as per the definition used by the United Nations Conference on Trade and Development (UNCTAD 2019).

  2. National Treatment refers to non-discrimination between domestic and imported goods. Most Favored Nation refers to non-discrimination between parties to a trade agreement.

  3. Friedmann disputes the full-scale emergence of the third food regime.

  4. The standard four exemptions are that the property has to be taken for a public purpose, on a non-discriminatory basis, in accordance with due process of law and accompanied by compensation.

Abbreviations

BIT:

Bilateral Investment Treaty

CETA:

EU-Canada Comprehensive Economic and Trade Agreement

CPTPP:

Comprehensive and Progressive Agreement for Trans-Pacific Partnership

EU:

European Union

FAO:

Food and Agriculture Organization of the United Nations

FDI:

Foreign direct investment

FTA:

Free Trade Agreement

GATT:

General Agreement on Tariffs and Trade

GM:

Genetically modified

ICSID:

International Center for the Settlement of Investment Disputes

IIA:

International Investment Agreement

ISDS:

Investor-state dispute settlement

NAFTA:

North American Free Trade Agreement

TNC:

Transnational corporation

TRIMs:

Trade and Investment Related Measures

TRIPS:

Trade-Related Aspects of Intellectual Property Rights

UK:

United Kingdom

UN:

United Nations

UNCITRAL:

United Nations Commission on International Trade Law

UNCTAD:

United Nations Conference on Trade and Development

US:

United States of America

USMCA:

United States-Mexico-Canada Agreement

WTO:

World Trade Organization

References

  • Allen, P., & Guthman, J. (2006). From “old school” to “farm-to-school”. Neoliberalization from the ground up. Agriculture and Human Values, 23(4), 401–415.

    Article  Google Scholar 

  • Bernasconi-Osterwalder, N., & Smaller, C. (2017). Farmland investments are finding their way to international arbitration. International Institute for Sustainable Development. Accessed February 19, 2019, from https://www.iisd.org/blog/farmland-investments-are-finding-their-way-international-arbitration.

  • Bernstein, H. (2016). Agrarian political economy and modern world capitalism: The contribution of food regime analysis. The Journal of Peasant Studies, 43(3), 611–647.

    Article  Google Scholar 

  • Bowen, G. A. (2009). Document analysis as a qualitative research method. Qualitative Research Journal, 9(2), 27–40.

    Article  Google Scholar 

  • Broad, R. (2015). Corporate bias in the World Bank Group’s International Centre for settlement of investment disputes: A case study of a global mining corporation suing El Salvador. University of Pennsylvania Journal of International Law, 36(4), 851–874.

    Google Scholar 

  • CCSI, IIED and IISD. (2018). Agricultural investments under international investment law. Columbia Center on Sustainable Development, International Institute for Environment and Development & International Institute for Sustainable Development. Accessed November 24, 2018, from http://ccsi.columbia.edu/files/2018/10/CCSI-IIED-IISD_Agricultural-Investments-under-IIL.pdf.

  • Chang, H. J. (2002). Kicking away the ladder: Development strategy in historical perspective. London: Anthem Press.

    Google Scholar 

  • Choudry, A. (2006). Bilateral free trade and investment agreements and the US Corporate Biotech Agenda. A publication of Pesticide Action Network Asia Pacific (PANAP) and People’s Coalition on Food Sovereignty (PCFS) Special Release.

  • Clapp, J., & Fuchs, D. (2009). Agrifood corporations, global governance, and sustainability: A framework for analysis. In J. Clapp & D. Fuchs (Eds.), Corporate power in global agrifood governance. Cambridge, MA: The MIT Press.

    Chapter  Google Scholar 

  • Collins, D. (2015). Performance requirements and investment incentives under international economic law. Cheltenham: Edward Elgar.

    Book  Google Scholar 

  • Corbin, J., & Strauss, A. (2008). Basics of qualitative research: Techniques and procedures for developing grounded theory (3rd ed.). Thousand Oaks, CA: Sage.

    Book  Google Scholar 

  • Correa, C. (2004). Bilateral investment agreements: Agents of new global standards for the protection of intellectual property rights? GRAIN. Accessed February 20, 2019, from https://www.grain.org/article/entries/125-bilateral-investment-agreements-agents-of-new-global-standards-for-the-protection-of-intellectual-property-rights.

  • Cotula, L., Vermeulen, S., Leonard, R., & Cotula, J. K. (2009). Land grab or development opportunity? Agricultural investment and international land deals in Africa. London: FAO, IIED and IFAD. Accessed February 20, 2019, from http://www.fao.org/3/a-ak241e.pdf.

  • Creswel, J. W. (2009). Research design: Qualitative, quantitative, and mixed methods approaches. Los Angeles: University of Nebraska-Lincoln.

    Google Scholar 

  • Damodaran, H. (2016, May 24). GM technology: Compulsory licensing rules withdrawn after outcry from crop research majors. The Indian Express.

  • De Bres, H. (2014). Risse on justice in trade. Ethics & International Affairs, 28(4), 489–499.

    Article  Google Scholar 

  • De Bres, H. (2016). Justice and international trade. Philosophy. Compass, 11(10), 570–579.

    Article  Google Scholar 

  • De Schutter, O. (2011). How not to think of land-grabbing: Three critiques of large-scale investments in farmland. Journal of Peasant Studies, 38(2), 249–279.

    Article  Google Scholar 

  • Economy Watch. (2010). Industrial agriculture. Economy Watch, Follow the Money. Accessed February 21, 2019, from http://www.economywatch.com/agriculture/types/industrial.html.

  • FAO. (2018). The state of food security and nutrition and the world. Building climate resilience for food security and nutrition. Rome: Food and Agriculture Organization. Accessed February 21, 2019, from http://www.fao.org/3/I9553EN/i9553en.pdf.

  • FAO. (2019). Sustainable development goals. Rome: Food and Agriculture Organization. Accessed February 16, 2019, from http://www.fao.org/sustainable-development-goals/goals/goal-2/en/.

  • Forbes. (2018). Global 2000. Accessed February 22, 2019, from https://www.forbes.com/global2000/#7128a512335d.

  • Friedmann, H. (1987). International regimes of food and agriculture since 1870. In T. Shanin (Ed.), Peasants and peasant societies (pp. 58–276). Oxford: Basil Blackwell.

    Google Scholar 

  • Friedmann, H., & McMichael, P. (1989). Agriculture and the state system: The rise and decline of national agricultures, 1870 to the present. Sociologia Ruralis, 29(2), 93–117.

    Article  Google Scholar 

  • Fuchs, D. (2005). Commanding heights? The strength and fragility of business power in global politics. Journal of International Studies, 33(3), 771–801.

    Google Scholar 

  • Fuchs, D., & Kalfagianni, A. (2010). The causes and consequences of private food governance. Business and Politics, 12(3), 1–34.

    Article  Google Scholar 

  • Fuchs, D., Kalfagianni, A., & Havinga, T. (2011). Actors in private food governance: the legitimacy of retail standards and multistakeholder initiatives with civil society participation. Agriculture and Human Values, 28(3), 353–367.

    Article  Google Scholar 

  • Ganguly, S. (1999). The Investor-State Dispute Mechanism (ISDM) and a sovereign’s power to protect public health. Columbia Journal of Transnational Law, 38, 113–168.

    Google Scholar 

  • GATT. (1947). The General Agreement on Tariffs and Trade. Accessed November 7, 2019 from https://www.wto.org/english/docs_e/legal_e/gatt47_01_e.htm

  • GATT. (1989). Submission by India, negotiating group on trade-related investment measures, Group of Negotiations on Goods, General Agreement on Tariffs and Trade, Document # MTN.GNG/NG12/W/18.

  • Gaukrodger, D., & Gordon, K. (2012). Investor-state dispute settlement: A scoping paper for the investment policy community. 2012/03 OECD Working Papers on International Investment, Paris.

  • Genest, A. (2017). Performance requirement prohibitions in international investment law. Ph.D. Dissertation, Faculty of Law, University of Ottawa and Faculty of Law Leiden University.

  • Gómez, K. F. (2011). Latin America and ICSID: David versus Goliath? Law and Business Review of the Americas, 17(2), 195–230.

    Google Scholar 

  • Gwynn, M. A. (2016). Power in the international investment framework. London: Palgrave Macmillan.

    Book  Google Scholar 

  • Hart-Landsberg, M. (2011). Korea–US Free Trade Agreement: The Investment Chapter. Accessed November 24, 2018, from https://economicfront.wordpress.com/2011/01/26/korea-us-free-trade-agreement-the-investment-chapter/Reports from the Economic Front.

  • ICSID. (2005a). Bernardus Henricus Funnekotter and others v. Republic of Zimbabwe. International Centre for Settlement of Investment Disputes: Case No. ARB/05/6. Accessed February 21, 2019, from https://investmentpolicyhub.unctad.org/ISDS/Details/216.

  • ICSID. (2005b). Ioan Micula, Viorel Micula and others v. Romania (I). International Centre for Settlement of Investment Disputes Case No. ARB/05/20. Accessed February 20, 2019, from https://investmentpolicyhub.unctad.org/ISDS/Details/180.

  • ICSID. (2017). Agro EcoEnergy Tanzania Limited, Bagamoyo EcoEnergy Limited, EcoDevelopment in Europe AB, EcoEnergy Africa AB v. United Republic of Tanzania, International Centre for Settlement of Investment Disputes Case No. ARB/17/33. Accessed February 20, 2019, from https://investmentpolicyhub.unctad.org/ISDS/Details/846.

  • Jandhyala, S., Henisz, W. J., & Mansfield, E. D. (2011). Three waves of BITs: The global diffusion of foreign investment policy. Journal of Conflict Resolution, 55(6), 1047–1073.

    Article  Google Scholar 

  • Jha, V., & Bernasconi-Osterwalder, N. (2011). Drafting provisions on the definition of expropriation, performance requirements, and the free movement of capital. Presented at the fifth annual forum of developing country investment negotiators—Investment and Sustainable Development: Developing Country Choices for a Better Future, Kampala, 17–19 October 2011.

  • Jones, R. C. (2002). NAFTA Chapter 11 investor-to-state dispute resolution: A shield to be embraced or a sword to be feared? Brigham Young University Law Review, 2, 527–559.

    Google Scholar 

  • Kapstein, E. B. (2004). Models of international economic justice. Ethics & International Affairs, 18(2), 79–92.

    Article  Google Scholar 

  • Kaur, R. (2012). Nation’s two bodies: rethinking the idea of ‘new’ India and its other. Third World Quarterly, 33(4), 603–621.

    Article  Google Scholar 

  • Kniess, J. (2018). Must we protect foreign investors? Moral Philosophy and Politics, 5(2), 205–225.

    Article  Google Scholar 

  • Landau, A. (2005). Analyzing international economic negotiations: Towards a synthesis of approaches. International Negotiation, 5(1), 1–19.

    Google Scholar 

  • Maffettone, P. (2009). The WTO and the limits of distributive justice. Philosophy & Social Criticism, 35(3), 243–267.

    Article  Google Scholar 

  • Marlles, J. R. (2007). Public purpose, private losses: Regulatory expropriation and environmental regulation in international investment law. Journal of Transnational Law and Policy, 16(2), 275–336.

    Google Scholar 

  • McCarthy, J., & Prudham, S. (2004). Neoliberal nature and the nature of neoliberalism. Geoforum, 35(3), 257–283.

    Google Scholar 

  • McMichael, P. (2004). Global development and the corporate food regime. Institute for Agriculture and Trade Policy. Accessed February 24, 2019, from http://www.iatp.org/documents/global-development-and-the-corporate-foodregime.

  • McMichael, P. (2005). Global development and the corporate food regime. In F. H. Buttel & P. McMichael (Eds.), New directions in the sociology of global development (Research in Rural Sociology and Development) (Vol. 11, pp. 265–299). Bingley: Emerald Group Publishing.

    Chapter  Google Scholar 

  • McMichael, P. (2009). A food regime genealogy. The Journal of Peasant Studies, 36(1), 139–169.

    Article  Google Scholar 

  • McMichael, P. (2012). The land grab and corporate food regime restructuring. Journal of Peasant Studies, 39(3–4), 681–701.

    Article  Google Scholar 

  • Nguyen, A. P. (2009). Viet Nam: The emergence of a rapidly growing industry. Food and Agriculture Organization of the United Nations. Accessed February 21, 2019, from http://www.fao.org/3/I0588E11.htm.

  • Oxfam Australia. (2016). Still banking on land grabs. Australia’s big four banks and Land Grabs. Accessed February 20, 2019, from http://resources.oxfam.org.au/pages/view.php?ref=1734&k=a99ea07b2b.

  • Peck, J. (2004). Geography and public policy: Constructions of neoliberalism. Progress in Human Geography, 28(3), 392–405.

    Article  Google Scholar 

  • Rawls, J. (1971). A theory of justice. Cambridge, MA: Belknap Press of Harvard University Press.

    Google Scholar 

  • Reddie, A. (2017). Power in international trade politics: Is ISDS a solution in search of a problem? Business and Politics, 19(4), 738–757.

    Article  Google Scholar 

  • Royalty, K. W., & Ross, D. (2007). NAFTA Chapter 11: “Tantamount to expropriation”: Tantamount to explosive. The International Trade Journal, 21(3), 299–327.

    Article  Google Scholar 

  • Samuel, W. (1999). Small island economies in the new international environment. Social and Economic Studies, 48(1/2), 155–189.

    Google Scholar 

  • Sands, C. (2019). Unpacking the USMCA for congressional approval in 2019. Centre for Strategic & International Studies. Accessed February 7, 2019, from https://www.csis.org/analysis/unpacking-usmca-congressional-approval-2019.

  • Stiglitz, J. E. (2007). Multinational corporations: balancing rights and responsibilities. In Proceedings of the American Society of International Law (ASIL) annual meeting (Vol. 101, pp. 3–60).

  • Stiglitz, J. E., & Charlton, A. (2004). Common values for the development round. World Trade Review, 3(3), 495–506.

    Article  Google Scholar 

  • Thrasher, R., Bevilacqua, D., & Capaldo, J. (2015). Trade agreements and the land: Investment agreements and their potential impacts on land governance. Global Development and Environment Background Paper # 15–01, Medford.

  • UNCTAD. (2003). Foreign direct investment and performance requirements: New evidence from selected countries. New York: United Nations Conference on Trade and Development.

  • UNCTAD. (2012). ExpropriationUNCTAD series on issues in International Investment Agreements II. UN Doc: UNCTAD/DIAE/IA/2011/7. New York: United Nations Conference on Trade and Development.

  • UNCTAD. (2018). Investorstate dispute settlement: Review of developments in 2017. IIA Issues Note Issue 2/2018. New York: United Nations Conference on Trade and Development. Accessed February 22, 2019, from https://investmentpolicyhub.unctad.org/Publications/Details/1188.

  • UNCTAD. (2019). Investment dispute settlement navigator. New York: United Nations Conference on Trade and Development. Accessed August 16, 2019, from https://investmentpolicyhub.unctad.org/ISDS.

  • USTR. (2018). The President’s 2018 Trade Policy Agenda. United States Trade Representative. Accessed February 14, 2019, from https://ustr.gov/sites/default/files/files/Press/Reports/2018/AR/2018%20Annual%20Report%20I.pdf.

  • Van Harten, G., & Malysheuski, P. (2016). Who has benefited financially from investment treaty arbitration? An evaluation of the size and wealth of claimants. Osgoode Legal Studies Research Paper # No. 14/2016.

  • Vervest, P., & Feodoroff, T. (2015). Licensed to grab: How international investment rules undermine Agrarian justice. Transnational Institute (TNI). Accessed February 10, 2019, from https://www.tni.org/files/download/licensed_to_grab.pdf.

  • WTO. (2019). Regional trade agreements. The World Trade Organization (WTO). Accessed August 31, 2019, from https://www.wto.org/english/tratop_e/region_e/region_e.htm.

Download references

Author information

Authors and Affiliations

Authors

Corresponding author

Correspondence to Jagjit Plahe.

Additional information

Publisher's Note

Springer Nature remains neutral with regard to jurisdictional claims in published maps and institutional affiliations.

Rights and permissions

Reprints and permissions

About this article

Check for updates. Verify currency and authenticity via CrossMark

Cite this article

Bull, A.C., Plahe, J. & Gregory, L. International Investment Agreements and the Escalation of Private Power in the Global Agri-Food System. J Bus Ethics 170, 519–533 (2021). https://doi.org/10.1007/s10551-019-04333-2

Download citation

  • Received:

  • Accepted:

  • Published:

  • Issue Date:

  • DOI: https://doi.org/10.1007/s10551-019-04333-2

Keywords

Navigation