After several Latin American governments have been facing lawsuits brought to them by transnational corporations due to bilateral investment treaties that had been signed back in the 1990s, a ministerial meeting of 12 countries held in Guayaquil, Ecuador has come up with a joint action plan to oppose the million to billion dollar claims being made.
Some of the decided on actions are:
- Establishment of regional arbitration centre for settling investment disputes, based on fair and balanced rules when settling disputes between corporations and States.
- The proposed centre is to provide an alternative to existing international tribunals which are seen as biased in favor of investors’ interests.
- Decision to create an ‘international observatory’ to monitor and analyse investment cases, to reform the present arbitration system, and suggest alternative mechanism for fair mediation between states and transnational companies
- This observatory would also promote coordination between the judicial systems of Latin American States, to ensure the enforcement of domestic judicial decisions on disputes between States and transnational corporations
- It should also give advice to governments on their negotiations with transnational corporations, especially in trade and investment contracts.
The lawsuits have caused extensive problems to the governments affected and back in July Bolivia, Cuba, Ecuador, Nicaragua, Dominican Republic, St. Vincent and Grenadine, and Venezuela – signed a declaration in April 2013 launching joint action to tackle the challenges at hand.
Since then the workshop “Alternatives to the International Investment Protection Regime and to the Dispute Resolution System between TNCs and States” was held in Guayaquil, Ecuador 25/26 July 2013. The workshop was organized by Jubilee 2000 and Red Ecuador, and organized by the Latin American Network on Debt, Development and Rights (LATINDADD), the Inter-American Platform for Human Rights, Democracy and Development (PIDHDD) and the Hemispheric Social Alliance (HSA), under the auspices of the National Ministry of Development and Planning (SENPLADES), the Ministry of Foreign Affairs and the Council for Citizen Participation and Social Control of Ecuador. The event brought together representatives of social organizations, continental networks of social movements, academics and representatives of government institutions of Ecuador, to discuss the perverse impacts of the international system of protection of investments and the unjust international dispute settlement mechanisms designed to favor multinationals against nation states and communities.
Martin Khor, director at the South Centre pointed out that there have been more than 500 known investor-to-state cases, 60 alone in 2012. Some countries in the region, such as Argentina, Ecuador, Venezuela and Mexico have each had 20 to 30 cases taken against them. The proliferation of cases in recent years have also spread and affected developing countries in other regions, such as South Africa, India, Indonesia and Vietnam, as well as many developed countries. (5 July 2013).
The regional coordinator to PIDHDD recently issued a statement in which he said:
Only a Global Strategic Alliance Will Put an End to the Rule of Impunity of Corporate Power
‘The strengthening of corporate power should not result in giving multinational companies carte blanche to obtain, via free trade or bilateral investment agreements, for example, exorbitant payoffs in international arbitration courts, such as in the cases of Pacific Rim Cayman (El Salvador), Chevron and Occidental Petroleum (Ecuador), Renco Group Inc. (Peru), Churchill Mining (Indonesia), South American Silver (Bolivia), or Infinito Gold (Costa Rica).’ (24 September 2013).
This is backed up by a statement made to the Human Rights Council ‘for a legally binding instrument on transnational corporations’ signed by FIAN International, Transnational Institute, Center of Concern, and La Via Campesina which states:
‘The operations of many Transnational Corporations (TNCs) and other business enterprises cause the devastation of livelihoods, territories and the environment of the communities where they operate; they pursue the commodification of essential services and of nature itself. Many TNCs and other business enterprises also violate or are complicit in violations of human rights and labour rights, erode the basis of food sovereignty, pollute water sources and lands, and plunder natural resources.
[...]
The undersigned social movements and civil society organisations welcome and support the initiative taken by a number of States in the Human Rights Council towards establishing an international legally binding instrument, concluded within the UN system, clarifying the human rights obligations of transnational corporations, in particular in relation to human rights violations, economic and ecological crimes, and abuses, and establishing an effective mechanism to provide remedies and access to justice for all affected people in cases where such remedies are de facto not provided in domestic jurisdictions.’ (20 September 2013).
As the governments plan and start to implement their mechanisms it is hoped that the transnational corporation lawsuits can be minimized to create a fairer economy for those affected and to ensure human rights laws are further being enacted.