Criticizing the field of international investment law: A simple story made complex

The system of international investment law is often criticised by civil society organizations and legal academics. The Guardian recently described this system as a “legal weapon that gives corporations the edge on government”; it emphasized that there is a “growing concern among legal experts” that the investment regime “favours corporations over the public interest, puts sovereignty at stake, is chronically lacking in transparency and accountability and has been mis-sold to many developing countries that only realize exactly what they have signed up for when they get sued.”[1]

A Public Statement on the International Investment Regime, signed by a group of forty eight academics from around the world, has added, “We have a shared concern for the harm done to the public welfare by the international investment regime, as currently structured, especially its hampering of the ability of governments to act for their people in response to the concerns of human development and environmental sustainability”. [2] It argues, inter alia, that investment treaty arbitrations are unfair and unbalanced,[3] and that states should withdraw from investment treaties.[4] International investment law has even been described by a distinguished academic as “a law of greed”.[5]

Although perhaps somewhat exaggerated, these critiques are certainly not baseless. Several recent developments, most notably the disputes between tobacco giant Philip-Morris and the governments of Australia and Uruguay, indeed demonstrate how foreign investors can…

Continue reading this entry ➔

L’accès aux médicaments antirétroviraux en contexte de crise de la santé publique et les obstacles posés par le droit international de la propriété intellectuelle

Chaque année, près de 2,7 millions de nouvelles infections au virus de l’immunodéficience humaine (VIH) sont rapportées et près de 2 millions de personnes en meurent (1). Les experts observent toutefois que les pics des nouvelles infections et de la mortalité annuelle sont maintenant derrière nous (1) et que les chiffres montrent une diminution globale de l’incidence du VIH/sida au niveau mondial (2). Un plus grand accès aux médicaments antirétroviraux (ARV) et une baisse de leur prix en faveur des populations des pays en développement (PED) est en grande partie responsable des progrès récents. Les ARV, en plus d’être les médicaments préconisés par les médecins  partout dans le monde pour un traitement efficace de la maladie, jouent un important rôle préventif en diminuant notablement les probabilités de transmission du virus (2, 3).

L’accès aux ARV est donc capital pour les PED, dont les populations ont les plus hauts taux d’incidence (4). Il y a près de dix ans, les ARV n’étaient que peu ou pas accessibles aux victimes de la maladie dans les PED, coûtant près de 10 000 $ par année pour chaque patient (5, 6). La société civile ainsi que certains membres de la communauté médicale internationale, outrés par l’attitude des grandes compagnies pharmaceutiques[1], ont donc dû prendre les choses en main afin de modifier l’ordre du jour politique global et  réitérer l’importance d’agir contre les ravages que…

Continue reading this entry ➔

Economics v. Justice? International Nuclear Liability Regimes

After the recent earthquake in Japan, there has been a global outpouring of sympathy and support. Governments and individuals worldwide have been trying to help Japan recover from the tragedy. Likewise, the world has been on edge regarding the ongoing crisis at the Fukushima I (or Fukushima Daiichi) nuclear power station, as everyone hopes that an even more serious nuclear catastrophe can be avoided.

Yet what about those individuals devoid of empathy or, seemingly, any human emotion? Pseudo-humans so empty and craven that, seeing the Japanese nuclear crisis, they think first and foremost about what the impact will be on the stock market. Self-interested automatons from an economics textbook come to life, who focus only on things that matter – or rather, the thing that matters: money. Whose writing will cater to this audience? The Wall Street Journal? Fox Business News? Amateurs! Come with me, fellow homo economici, and let us cast off this veil of humanity.

Firstly, the crisis in Japan has been playing havoc with the stock market, and that can only mean one thing: investment opportunities! Here’s a great stock pick[1] to get the ball rolling: General Electric. GE built (wholly or in part) half of the reactors at the Fukushima I plant, and the crisis now unfolding has been partially attributed to a design flaw. In reaction to this news, GE’s stock price

Continue reading this entry ➔

African Countries and the WTO Dispute Settlement System: strangers in an alien land?

In 1995, the World Trade Organization (WTO) came into existence, introducing some key reforms to the long-standing General Agreement on Tariffs and Trade (GATT) system. The most important reform was the setup of the Dispute Settlement System (DSS). There was now a greater clarity of rules and regulations, binding decisions and an Appellant Body. One would imagine that the highly juridical and legalized system based on equality and strict rules would be somewhat advantageous to African countries (the largest group in the WTO). This has not been the case. In fact, African countries’ involvement in the WTO dispute settlement system in the first decade has been minimal at best. In the first decade (1995-2005) of the DSS, no African country was ever a complainant in a dispute and in only six cases was an African country a respondent. In addition, Egypt is the only African country to have shown initiative and request the establishment of a panel, in the Egypt-Definitive Anti-dumping Measures on Steel Rebar from Turkey case. The one comparatively active area for African states in the DSS is their participation in disputes as third parties. Zimbabwe, Nigeria, Senegal, Cameroon and Cote-d’Ivoire have all participated in this capacity.

The most common reasons propagated for this trend include the low volume of global trade emanating from and to Africa, African countries’ inability to navigate the complicated and expensive DSS, and a lack of expert…

Continue reading this entry ➔

Special Contribution: A New Protocol To Stop Biopiracy: Worth a Standing Ovation?

Nailed it: Environment Minister Ryu Matsumoto raises the hammer to end the COP10 conference in Nagoya. KYODO PHOTO, Japan Times Sunday, Oct. 31, 2010

On Saturday morning, October 28 2010 the Nagoya Protocol on Access to Genetic Resources and the Fair and Equitable Sharing of Benefits Arising from their Utilization to the Convention on Biological Diversity was adopted in the midst of a standing ovation by the Parties present.

This Protocol is intended to comply with the 3^rd objective of the Convention on Biological Diversity (CBD), which is the fair and equitable sharing of benefits arising from the utilization of genetic resources with the custodians of biodiversity. This Protocol is being hailed by delegates and nongovernmental organizations as one of the most important measures the world has ever taken against biopiracy.

Indeed, for many decades, pharmaceutical and cosmetics firms, and the agricultural and biotech industries have manufactured everyday products (drugs, toothpaste, makeup, etc.) consumed in our developed countries using plants or organisms from such places as the tropical rain forests of Latin America and Southeast Asia without acknowledging their origin or sharing the profits with Indigenous peoples and local communities whose knowledge made the development of these products possible[1]. Even worse, companies have patented over the last decades traditional products that were developed with the knowledge of Indigenous peoples and local communities without…

Continue reading this entry ➔

Privacy in Switzerland Under Threat from the IRS

Woody Allen once said, “If only God would give me some clear sign! Like making a large deposit in my name at a Swiss bank.” For decades, the notion of having a Swiss bank account has been viewed as a status symbol.  With roughly 27% of the world’s foreign holdings in 2008 (an estimated $2 trillion – Bondi, Bradley J. 2010), the Swiss have certainly cornered the international market on discretely protecting assets.  In short, Switzerland has been the prestigious place for Americans to hide money from the IRS.  But thanks to proceedings between the IRS and the Swiss Parliament, such references may soon become no more than an outdated joke.

This past summer, the IRS took serious steps in an international attempt to cut down on tax evasion through the use of offshore accounts in Switzerland. The IRS has entered into an agreement with the Swiss Parliament to release over 4,000 names of U.S. citizen clients of UBS AG with significant holdings in Switzerland.

The trouble began when the IRS decided to investigate UBS for helping Americans evade US taxes.  UBS was facing potential criminal prosecution, which could have threatened the very existence of one of the largest and well-reputed banks of our time.  In a move to save the bank, UBS executives pressured the Swiss government for ways around the secrecy banking laws to give the…

Continue reading this entry ➔

Bill C-300 and CSR: The Canadian Approach

The private member’s bill, an Act respecting Corporate Accountability for the Activities of Mining, Oil or Gas in Developing Countries (C-300) was defeated in Parliament on Wednesday (October 27th). While it was a close vote, 140-134, it was not a surprising outcome, considering that even Liberal leader Michael Ignatieff, whose own party brought the bill forward, claimed that the bill ‘had problems’ and did not show up for the vote. The question thus remains, what is Canada’s commitment to corporate responsibility in terms of international activities?

The stated purpose of the Act was, “to ensure that corporations engaged in mining, oil or gas activities and receiving support from the Government of Canada act in a manner consistent with international environmental best practices and with Canada’s commitments to international human rights standards.” In other words, the bill hoped to codify what is currently considered, insofar as international law is concerned, to be soft law. Despite the fact that some of the biggest Multinational Enterprise (MNEs) are technologically and financially stronger than some of the countries in which they operate, they are not recognized as having international legal personality.

Several international declarations demonstrate a consensus on behalf of the majority of states that the bottom line should not be companies’ sole prerogative; human rights must also be taken into account. The 2002 Johannesburg Declaration on Sustainable Development states that the private sector,…

Continue reading this entry ➔

Environmental Law and the Curse of Competency

Have you ever been in an organization full of incompetents, where one competent person has to do everyone else’s work even though it has nothing to do with their own job? I certainly have – and identifying that individual really took the pressure off me and my fellow rubes. “Tibor,” we’d say, “we can’t get this project done on time even though your project depends on it. Can you help us out?” Sure enough, Tibor would come through for us, and we’d all learn something about teamwork. Something depressing.

“What does this have to do with law?” you may ask (other than its relevance to my ongoing unjust dismissal hearing). Simple: by passing the environmental buck on to financial regulatory agencies such as the Ontario Securities Commission (OSC), we would be treating them just like poor old Tibor.

In the land of the incompetent, the semi-competent man is king. Similarly, in the ham-fisted world of inefficient and ineffective governmental organisations, a body which generally satisfies its mandate, such as the OSC, is a paragon. Of course, the OSC (or the rest of Canada’s financial market regulators) isn’t beyond criticism. Many complain that Canada is more lax towards fraud and white-collar crime than other countries. Nevertheless, the OSC has fared much better in meeting its dual mandate – protecting investors while promoting fair and efficient markets – than equivalent organizations…

Continue reading this entry ➔

Multinational Corporations, International Trade and Morality. “Do No Evil”?

The activity of multinational corporations in the international arena is an important engine of development. It is within the ability of multinational corporations to create jobs, to invest in expensive research, to transfer knowledge and technology around the world and to promote progress in many fields. Indeed the international community support such activities through the regulation of both international trade and investment. These rules are mostly designed to facilitate international economic activity by ensuring easy access to foreign markets and warranting fair treatment to aliens by host states.

The opening of borders to international activity has also brought about certain illnesses, some of which are not easy to confront. On the environmental front for example, it seems as if fears of losing economic competitiveness inhibit countries like the United States from passing a significant climate change bill. With regard to labour standards, competition for foreign investment may encourage countries to relax their labour laws and to use lower standards as an enticement for foreign economic actors. International economic activity is a complex, multilayered issue, one that touches (and often clashes with) a multitude of global issues.

A somewhat complicated relationship exists between international economic activity of multinational corporations and morality. The different concepts of moral behaviour, the notion of companies as entities that should act according to guidelines of morality (rather than just acting according to laws) and the role…

Continue reading this entry ➔

Special Contribution : Moving Forward with Corporate Environmental, Social and Governance Disclosure

Whether the issue is climate change, biodiversity, labour and supply chains, or international human rights, corporate sustainability disclosure is of increasing relevance to shareholders.  In a recent report submitted to Ontario, Canada’s minister of finance, the Ontario Securities Commission (OSC) made various recommendations regarding corporate reporting that may be controversial to some, but are a step in the right direction.

The report follows the Ontario Legislature’s unanimous approval of a private member’s resolution calling on the province to review existing reporting requirements and issuers’ compliance.

The resolution asked the OSC to undertake a broad consultation in order to “establish best practice corporate social responsibility…and environmental, social and governance…reporting standards”. In response, the OSC – supported by the Hennick Centre for Business and Law at York University – convened a multi-stakeholder roundtable and held various consultations with interested parties.

The reporting of material environmental, social and governance (ESG) information should be viewed as an integral part of a businesses’ overall risk management strategy. With this information, shareholders are in a better position to assess financial risks and to allocate capital to firms best suited to mitigate these risks. Disclosure also encourages stakeholder dialogue. This dialogue, over time, informs internal decision-making and provides a critical framework for identifying both risks and opportunities. This, in turn, can drive performance, enhance an organization’s reputation and strengthen the core elements of its…

Continue reading this entry ➔