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Towards a Republicanisation of International Investment Law?: Conceptualising the Legitimatory Value of Public Participation in the Negotiation and Enforcement of International Investment Agreements

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Private Actors in International Investment Law

Part of the book series: European Yearbook of International Economic Law ((Spec. Issue))

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Abstract

The chapter takes a closer analytical look at one of the central manifestations of the currently changing character of international investment law as a politicised area of law, namely the increasing, and increasingly more formalised, opportunities for an active involvement of interested citizens and other private actors in the preparation, negotiation and subsequent enforcement of international investment agreements. We identify and illustrate practical examples of public participation in the investment treaty-making processes as well as the implementation mechanisms of investment agreements once entering into force. The chapter furthermore illustrates that the options for public participation as increasingly provided for in connection with these treaties are often, and in principle rightly, perceived as valuable means to foster the legitimacy of the regulatory features stipulated therein. Turning to the conceptualisation of this legitimatory value of public participation, it is argued that a closer look at its quasi-constitutional foundations reveals that this approach is most appropriately qualified as an alternative to, or surrogate for, democratic legitimacy that finds its overarching normative basis in the legal principle of republicanism and can thus be considered as a possible sign for a republicanisation of international investment law. Against this background, and adopting a more overarching perspective, we also present some thoughts on the usefulness and validity of a broader claim towards a republicanisation of international investment law as a normative ordering and guiding idea for conceptualising current trends in international investment law-making as well as for the future progressive evolution of this area of international economic law.

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Notes

  1. 1.

    See in particular, Organisation for Economic Co-operation and Development, Multilateral Agreement on Investment, Draft Consolidated Text, DAFFE/MAI(98)7/REV1, 22 April 1998 (following the publicity of the draft in 1997, civil society reacted strongly against the agreement, subsequently resulting in its demise); see also Cohn (2002), pp. 260 et seq.; Muchlinski (2000), pp. 1039–1040 (noting that the leak of a negotiating document “coupled with the relative lack of publicity concerning the negotiations in the media, gave rise to a feeling that the public and interested NGOs were being excluded from the process, notwithstanding the fact that the process had been publicly announced in 1995. The initial lack of attention to public opinion, and to the views of civil society, created an air of hostility to the project that made it hard to justify on a political level”).

  2. 2.

    Marceddu (2018), pp. 681–682.

  3. 3.

    Trebilcock (2015), p. 9.

  4. 4.

    On the perception of an increasingly individualised and human-oriented public international law see, e.g., Peters (2016) and Teitel (2011).

  5. 5.

    On the definition of republicanization see infra under Sect. 4.

  6. 6.

    This thus implies that the public participation had a potentially imbalanced character towards the side of home state, namely the investor’s rights, mirroring a common criticism of the system of investment protection from another angle. See for example, Cai (2018), pp. 218–219; Sornarajah (2015), pp. 62 et seq.

  7. 7.

    Organisation for Economic Co-operation and Development, Multilateral Agreement on Investment, Draft Consolidated Text, DAFFE/MAI(98)7/REV1, 22 April 1998, available at: http://www.oecd.org/daf/mai/pdf/ng/ng987r1e.pdf; see also Wallace-Bruce (2001), pp. 54 et seq.

  8. 8.

    Henderson and Jeydel (2007).

  9. 9.

    See for example, Aguas del Tunari SA v Republic of Bolivia, ICSID Case No. ARB/02/3 (dispute arising out of privatisation of the water sector and violent public protest following an increase in water prices); Suez, Sociedad General de Aguas de Barcelona SA and Vivendi Universal SA v Argentine Republic, ICSID Case No ARB/03/19; see also Bray (2014), p. 477.

  10. 10.

    International Investment Law: A Changing Landscape (Organisation for Economic Cooperation and Development, 2005), available at https://www.oecd-ilibrary.org/finance-and-investment/international-investment-law-a-changing-landscape_9789264011656-en.

  11. 11.

    UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (2014); United Nations Convention on Transparency in Treaty-based Investor-State Arbitration (2015); A/CN.9/935—Report of Working Group III (Investor-State Dispute Settlement Reform) on the work of its thirty-fifth session, para. 17, available at https://undocs.org/en/A/CN.9/935.

  12. 12.

    See thereto Non-Paper of the Commission Services, Feedback and Way Forward on Improving the Implementation and Enforcement of Trade and Sustainable Development Chapters in EU Free Trade Agreements, 26 February 2018, p. 6, available at: http://trade.ec.europa.eu/doclib/docs/2018/february/tradoc_156618.pdf.

  13. 13.

    This initiative is relevant in the context of the EU common commercial policy in general and of investment agreements in particular as it has more recently been subject to an important clarification by the General Court in the case of Efler et al. v. European Commission dealing with the legality of a Commission’s initial refusal to register the proposed European citizens’ initiative “Stop TTIP”. See General Court, Case T-754/14, Michael Efler et al. v. European Commission, Judgement of 10 May 2017, available at: http://curia.europa.eu/juris/document/document.jsf?text=&docid=190563&pageIndex=0&doclang=en&mode=lst&dir=&occ=first&part=1&cid=7362295; see thereto also Wendel (2017), pp. 68 et seq.

  14. 14.

    Sornarajah (2017), Schneiderman (2008) and Collins (2010).

  15. 15.

    Comprehensive and Economic Trade Agreement (provisional entry into force 21 September 2017) Article 8.36(1), available at: https://eur-lex.europa.eu/legal-content/EN/TXT/PDF/?uri=CELEX:22017A0114(01)&from=EN; UNCITRAL Rules on Transparency in Treaty-based Investor-State Arbitration (2014) Article 4, available at https://uncitral.un.org/sites/uncitral.un.org/files/media-documents/uncitral/en/rules-on-transparency-e.pdf; EU-Singapore Investment Protection Agreement (21 November 2019) Article 3 of Annex 8 (“Rules on Public Access to Documents, Hearings and the Possibility of Third Persons to Make Submissions”), available at: http://trade.ec.europa.eu/doclib/press/index.cfm?id=961; see also ICSID Rules of Procedure for Arbitration Proceedings (April 2006) Rule 37(2), available at: https://icsid.worldbank.org/en/Documents/icsiddocs/ICSID%20Convention%20English.pdf: “After consulting both parties, the Tribunal may allow a person or entity that is not a party to the dispute […] to file a written submission with the Tribunal regarding a matter within the scope of the dispute […]”.

  16. 16.

    See for example, Aguas del Tunari S.A. v. Republic of Bolivia, ICSID Case No. ARB/02/3, Decision on Respondent’s Objections to Jurisdiction, 21 October 2005; Methanex Corporation v. United States of America (UNCITRAL), Decision of the Tribunal on Petitions from Third Persons to Intervene as “amici curiae”, 15 January 2001, paras 26, 29, 49 (relying on the discretion of the tribunal and recognising the requirements for “procedural equality and fairness towards the Disputing Parties”, further indicating that third parties possess no legal rights under the relevant legal instruments, and resting its discourse on the public interest arising from the subject matter).

  17. 17.

    Salazar (2013), p. 199 (proposing an “expansive view of amici curiae for public interest groups in light of the potential of the latter to counter the influence corporate interest groups and to contribute to both minimise NAFTA Chapter 11 inconsistencies and strike a more realistic balance between the public interest and foreign investors’ interest”).

  18. 18.

    On this issue see, e.g., Ohler (2017), pp. 227 et seq.; Sornarajah (2015), pp. 16 et seq.; von Bogdandy and Venzke (2014), pp. 156 et seq.; Schill (2018), pp. 33 et seq.; Cotula (2017), pp. 351 et seq.; Kulick (2015), pp. 441 et seq., each with further references.

  19. 19.

    Schill (2017), p. 1.

  20. 20.

    See generally with regard to modern governance structures of international regimes on this issue for example Peters (2001), pp. 645 et seq.; Tietje (2003), pp. 1094 et seq.; Ladeur (2004), p. 113; Kingsbury et al. (2005), pp. 48 et seq.; Delbrück (2003), pp. 36 et seq.

  21. 21.

    Generally on the approach of decreasing the demand for democratic legitimacy as a possible strategy in international governance see, e.g., Krajewski (2019), para. 24.

  22. 22.

    Scharpf (1972), pp. 21 et seq.

  23. 23.

    See for example Held (1995), pp. 221 et seq.

  24. 24.

    McGrew (2003), p. 503.

  25. 25.

    On this perception see, e.g., Zürn and Leibfried (2005), p. 22; Delbrück (2003), p. 40; Bodansky (1999), p. 600; Elsig (2007), p. 91.

  26. 26.

    See, e.g., Peters (2001), pp. 580 et seq.; Tietje (2003), p. 1095.

  27. 27.

    Generally thereto for example Schliesky (2004), pp. 588 et seq.; Delbrück (2003), pp. 40 et seq.; Krisch (2006), pp. 247 et seq., each with further references.

  28. 28.

    See thereto for example Wendel (2017), pp. 61 et seq.; Sattorova (2018), pp. 182 et seq.

  29. 29.

    See for example Cotula (2017), pp. 351 et seq.

  30. 30.

    See generally thereto, e.g., Delbrück (2003), pp. 43 et seq. (“Surrogates for Democration”); Klabbers et al. (2009), pp. 338 et seq.; as well as specifically with regard to the participation of non-state actors recently Krajewski (2019), para. 19. See in this connection also the respective critical remarks by the Federal Constitutional Court of Germany in its judgment of 30 June 2009 on the constitutionality of the Lisbon Reform Treaty, BVerfGE 123, 267 (379–380); an English translation of the judgment is available at: https://www.bundesverfassungsgericht.de/SharedDocs/Entscheidungen/EN/2009/06/es20090630_2bve000208en.html.

  31. 31.

    See thereto Nowrot (2014), pp. 382 et seq., with numerous further references; as well as more recently also for example Krajewski (2019), para. 3 (“Democratic legitimacy is an element of in-put legitimacy”).

  32. 32.

    On the actual, or at least potential, relevance of the republican principle for the international system and its legal order see, from the perspective of legal scholars, already for example Besson (2009), pp. 205 et seq.; Delbrück (1994), pp. 45 et seq.; Sellers (2006), pp. 1 et seq.

  33. 33.

    See thereto Nowrot (2014), pp. 17 et seq., with respective references.

  34. 34.

    On the underlying legal methodology and approach to concretise the regulatory content of the republican principle see Nowrot (2014), pp. 179 et seq.

  35. 35.

    On the following conceptual content of the republican principle see already Nowrot (2014), pp. 343 et seq., with numerous further references.

  36. 36.

    Craig (1997), p. 116.

  37. 37.

    Pettit (1997), p. 290.

  38. 38.

    For a more comprehensive analysis of these sub-principles see Nowrot (2014), pp. 403 et seq.

  39. 39.

    See, e.g., Delbrück (1994), p. 62; Michelman (1988), pp. 1499 et seq.; Sunstein (1990), p. 181 (“Republicans also put a high premium on active citizen participation in public affairs”).

  40. 40.

    Craig (1997), p. 120.

  41. 41.

    See for example Cotula (2015), pp. 1 et seq.

  42. 42.

    Plama Consortium Ltd. v. Bulgaria, ICSID Case No. ARB/03/24, Decision on Jurisdiction of 8 February 2005, para. 141.

  43. 43.

    See supra under Sect. 4.

  44. 44.

    See for example United Nations Convention on Transparency in Treaty-Based Investor-State Arbitration, opened for signature 17 March 2015, available at: https://www.uncitral.org/pdf/english/texts/arbitration/transparency-convention/Transparency-Convention-e.pdf.

  45. 45.

    See thereto, e.g., Sipiorski (2019), pp. 92 et seq., with further references.

  46. 46.

    Generally thereto see for example Nowrot (2015), pp. 1154 et seq.; Barnes (2019), pp. 328 et seq.

  47. 47.

    See supra Sect. 2.

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  1. University of Hamburg, Hamburg, Germany

    Karsten Nowrot & Emily Sipiorski

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  1. Karsten Nowrot
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Correspondence to Emily Sipiorski .

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  1. University of Zaragoza, Zaragoza, Spain

    Katia Fach Gómez

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Nowrot, K., Sipiorski, E. (2021). Towards a Republicanisation of International Investment Law?: Conceptualising the Legitimatory Value of Public Participation in the Negotiation and Enforcement of International Investment Agreements. In: Fach Gómez, K. (eds) Private Actors in International Investment Law. European Yearbook of International Economic Law(). Springer, Cham. https://doi.org/10.1007/978-3-030-48393-7_10

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