A/HRC/30/44
and equal treatment” have been expansive and difficult to reconcile with the interpretation
rules under articles 31 and 32 of the Vienna Convention on the Law of Treaties. Experience
shows that arbitrators interpret international investment agreements without human rights
or environmental constraints. Their procedures are not transparent and it is not even known
how many arbitrations have actually taken place, because most of them are not published.
What becomes apparent is the strong business bias of the arbitrators and their feeling of
being immune to general principles of law. In a 2012 report, UNCTAD noted that an
“expansive interpretation of minimalist treaty language can give rise to a lack of
predictability in the application of the standard. This, in turn, may lead to the undermining
of legitimate State intervention for economic, social, environmental and other development
ends”.31
17.
Spanish arbitrator Fernández-Armesto notes: “When I wake up at night and think
about arbitration, it never ceases to amaze me that sovereign states have agreed to
investment arbitration at all … Three private individuals are entrusted with the power to
review, without any restriction or appeal procedure, all actions of the government, all
decisions of the courts, and all laws and regulations emanating from parliament.” 32 Indeed,
it is disturbing that arbitrators can disregard basic principles such as respect for the “margin
of discretion” of States, State legislation and even the judicial pronouncements of the
highest domestic courts. The one-way street of investor protection has not contributed to a
culture of investor–State cooperation but fuelled an aggressive tendency to litigate and
demonstrably generated a “regulatory chill”. Arbitration may take place in Washington
under the auspices of the World Bank’s ICSID, but there is a worrisome degree of forumshopping, and tribunals may meet before the London Court of International Arbitration, the
International Chamber of Commerce, the Stockholm Chamber of Commerce, the Hong
Kong International Arbitration Centre or the United Nations Commission on International
Trade Law (UNCITRAL). There is a growing number of arbitrations that privilege profit
over human rights.33 According to UNCTAD, many investor–State dispute settlement
arbitrations are completely confidential and information is available only regarding some
608 awards.34 The Independent Expert refers to his forthcoming report to the General
Assembly and flags a few cases in order to illustrate litigation practices and their human
rights implications.
18.
In 2013, Lone Pine, a Calgary-based company registered in the United States sued
Canada not under Canadian law, but under chapter 11 of NAFTA, challenging the
moratorium by Quebec on fracking. The company did not give Canada time to weigh
scientific studies showing that some fracking chemicals include carcinogens and hazardous
air pollutants justifying preventive measures.35 Lone Pine contends that the moratorium is
“arbitrary” and “capricious,” and that it expropriates Lone Pine’s profit.
19.
Ethyl Corporation, a Virginia corporation with a Canadian subsidiary, submitted a
claim alleging that a Canadian statute banning imports of the gasoline additive MMT
31
32
33
34
35
10
Fair and Equitable Treatment (United Nations publication, Sales No. E.11.II.D.15), p. 2.
www.theguardian.com/commentisfree/2013/nov/04/us-trade-deal-full-frontal-assault-on-democracy.
European Center for Constitutional and Human Rights, “Human rights inapplicable in international
investment arbitration?”, available from www.ecchr.de/worldbank/articles/human-rights-inapplicablein-international-investment-arbitration.html.
UNCTAD, IIA Issues Note, No. 1 (February 2015), available from
unctad.org/en/PublicationsLibrary/webdiaepcb2015d1_en.pdf.
commonsensecanadian.ca/quebec-fracking-nafta-challenge-right-water-right-profit/.
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