Marching for Justice: Conflicting Perspectives of Peaceful Assemblies in International Investment Law and International Human Rights Law
In 2019, Spanish media speculated that isolated acts of looting against Vodaphone and Foot Locker following otherwise peaceful demonstrations in Barcelona could invoke Spain’s obligations to provide full protection and security to foreign investors. Photo by Dani Codina (CC BY-SA 2.0)
By Laura Edwards
1. Introduction
We now live in an era of mass protests. From Colombia’s 2019 national strikes, to the Belarus slipper uprising, to police brutality marches across the United States, ordinary citizens are rising up against their governments at an unprecedented rate.[1] In 2019 alone, protests and social uprisings occurred in as many as 114 countries worldwide.[2] In 2021, with mounting pressure from the COVID-19 pandemic, investment analysts predict protests will swell even further, creating what has been described as a “perfect storm” for companies, insurers, and investors.[3]
Historically, mass protests have infrequently been the subject of international investment disputes. This, however, appears to be changing, with a number of pending claims before the International Centre for Settlement of Investment Disputes (ICSID) featuring mass protests. They include a claim filed in 2016 by a Canadian mining company against Colombia.[4] This claim alleges the investors’ operations were negatively impacted by civil strikes and demonstrations by miners in the informal economy, and asserts a host of treaty violations by the Colombian government under the Canada-Colombia Bilateral Investment Treaty (BIT).[5] More recently, in October 2020, ICSID registered a claim by a gold mining corporation against Peru, claiming Peru failed to provide assistance when its project was halted by large-scale community protests.[6]
Other claimants have threatened investment claims against states. In 2014, a Taiwanese investor threatened treaty claims against Vietnam, alleging the government failed to shield its operations from anti-China protests targeting factories displaying Chinese-language signage.[7] In 2019, Spanish media also speculated that isolated acts of looting against Vodafone and Foot Locker following otherwise peaceful demonstrations in Barcelona could invoke Spain’s obligations to provide full protection and security (FPS) to foreign investors under Spain’s BITs.[8] As Professor Christoph Schreuer explains, the right to FPS requires a host state both to refrain from interfering with an investor’s property, and to protect the investors’ assets from interference by third parties.[9]
At the same time, while the investor-state dispute system (ISDS) grapples with a rise in these cases, the international human rights community has launched its own response. In July 2020, the United Nations Human Rights Council issued a new general comment on the right to freedom of assembly.[10] Interpreting Article 21 of the International Covenant on Civil and Political Rights, it incorporates prior UN guidelines and provides a “timely articulation of key principles and best practices governing peaceful assembly.”[11] Amongst its recommendations, UN General Comment No. 37 explicitly requires governments and their police forces exercise a “significant degree of toleration” towards protestors, even when the protestors’ actions disrupt business and economic activity.[12]
This paper suggests that recent developments in international human rights law have created an opportune moment for tribunals to reconsider their engagement with the international human rights law regime with respect to claims involving mass demonstrations. Section two of this paper highlights the extent to which international human rights law and international investment law complement or are in tension with one another. Section three examines how investment tribunals have dealt with these tensions, pointing to an overall conflict avoidance pattern. Section four considers the consequences of this conflict avoidance approach and points to signs of a divergence in legal standards. Finally, section five concludes with overall remarks.
2. The Interaction Between International Investment Law and Human Rights
In many respects, international human rights and investment law are complementary regimes. Both systems developed to provide individuals with the ability to hold states directly accountable for treaty violations, through specialized dispute resolution mechanisms.[13] For citizens affected by police action (or inaction) in times of protest, these mechanisms include the Human Rights Committee and the Committee on Economic, Social, and Cultural Rights. For foreign investors, forums such as ICSID may provide recourse for violations of their property rights in times of protest, as highlighted in section one. As Professor Bruno Simma suggests, what underlies both systems is ultimately the same concern: the need to protect individuals against state power.[14]
However, while these systems are broadly compatible with one another, there is also tension between the regimes. This is most apparent in the context of FPS claims brought before investment tribunals. In these cases, investors have typically alleged that the state, by failing to quell the acts of protestors, has violated the investor’s right to full protection and security for their investment. By their nature, these claims essentially ask tribunals to consider whether the government should have done more to protect the foreign investors’ property from blockades and demonstrations carried out by the government’s own citizens — potentially giving rise to tension between the economic rights of investors and the rights of protestors to assemble freely.
The same tension that arises in FPS claims has also attracted the attention of the UN Human Rights Committee in General Comment No. 37. This general comment is the first to provide authoritative guidance to states on the right to freedom of assembly, and has been heralded as a landmark success by civil society groups.[15],[16] Recognizing the inherent conflict between assembly rights and economic rights in situations involving protestors, the guidance emphasizes that “private entities and broader society may be expected to accept some level of disruption as a result of the exercise of the right [to freedom of assembly].”[17] Although the precise legal weight that should be prescribed to general comments is disputed, Simma has recognized that states must, at the very least, consider general comments “in good faith,”[18] and suggests that their interpretations could inform tribunals’ analysis of clauses in many BITs.[19]
When faced with rising claims before ICSID featuring protests and a new UN general comment providing authoritative guidance on the right to freedom of assembly, it may no longer be possible or desirable for tribunals to ignore the relationship between international investment law and human rights law in this context.
3. Conflict Avoidance: the Treatment of Mass Protests by Arbitral Tribunals in FPS Claims
Historically, mass protests have infrequently been the subject of investment disputes. When they have arisen, these claims involve protesting community members or employees blocking access to an investors’ property, such that the property value is effectively diminished. Claims of this nature give rise to a host of treaty claims under BITs. However, claims for the violation of the FPS standard are where the economic rights of foreign investors appear to most frequently conflict with citizen rights to assemble.
3.1 The ELSI Approach and the Historic Treatment of Mass Protests by Investment Tribunals
Before the growth of the modern ISDS system, the ICJ heard two seminal cases involving the mistreatment of foreign economic entities. One of those cases was Case Concerning Elettronica Sicula S.P.A (ELSI) (United States v. Italy), in July 1989. In ELSI, the U.S. government alleged that Italy had breached protection standards in the 1948 Treaty of Friendship, Commerce, and Navigation after the occupation of a U.S. plant by protesting workers led to the plant’s requisition by the Italian government.[20] In determining that the protection provided by Italy did not fall below the standard of full protection and security required by international law, the Court in ELSI made clear the treaty’s “provision of ‘constant protection and security’ cannot be construed as the giving of a warranty that property shall never in any circumstances be occupied or disturbed.”[21]
Since ELSI, tribunals have interpreted the ICJ’s judgment as an attempt to set a high bar for investors seeking physical protection and security of their investments from host states. One key example is the 2005 decision in Noble Ventures v Romania.[22] In Noble Ventures, a tribunal presided over claims that Romania’s police failed to provide full protection and security to a U.S. company during a period of labor unrest on its premises.[23] Affirming the ICJ’s decision in ELSI, the tribunal declined to find a violation of the FPS standard. Instead, it emphasized that such violations are “not easily to be established”[24] and deferred to the state on the appropriate exercise of due diligence.
Following Noble Ventures, support for the ELSI approach has continued, as seen in awards rendered in Abengoa v. Mexico[25] and Tecmed v. Mexico amongst others. Notably, in Tecmed, a tribunal was tasked to consider whether community protests at a landfill site and subsequent regulatory measures amounted to violations of the Spain-Mexico BIT, including claims of expropriation, and breach of fair and equitable treatment (FET) and FPS standards. With respect to the investor’s FPS claim, the tribunal followed the general approach in ELSI, finding “insufficient evidence” to prove the Mexican authorities “have not reacted reasonably, in accordance with the parameters inherent in a democratic state.”[26],[27] Having established that case law from the European Court of Human Rights was relevant to the claimant’s expropriation claim,[28] the tribunal nevertheless avoided dealing with the question of how international human rights law might also apply to the investor’s FPS claim by finding that this claim had not been substantiated.
3.2. Moving Away From Deference: Charting a Divergence From the ELSI Approach
While the approach in ELSI dominated the early 2000s, there has been a recent shift. Now tribunals seem to be approaching FPS claims involving protestors with less automatic deference to the state, showing greater willingness to analyze policing responses. In doing so, tribunals increase the potential for international investment law to come into conflict with human rights law. One key example is the 2014 award in Louis Dreyfus Armateurs v. India.[29] In this case, a tribunal formed under the United Nations Commission on International Trade Law Arbitration Rules was called upon to determine whether India breached obligations under the India-France BIT when the claimant alleged it was unable to continue its project at a port facility in West Bengal due to blockades and protests by several hundred of its workers.[30]
Although the tribunal determined the claimant’s investment fell outside the scope of the treaty’s protection, and hence it was not necessary to determine whether India violated the BIT’s FPS standard, the tribunal nevertheless made clear that in certain instances arbitrators may be called upon to judge the actions of law enforcement officials. In particular, the tribunal noted that “in appropriate cases” tribunals must wade into the “delicate assessment of …due diligence” with respect to the proper deployment of law enforcement resources by the state.[31] The tribunal, while acknowledging these questions were “generally judgment calls, to be made by a State,” went to greater lengths to analyze the effectiveness of police responses to the labor demonstrations than the tribunal in Noble Ventures did over a decade earlier – even making extensive references to police reports throughout its determinations.[32]
Similarly, in the 2016 award in Copper Mesa Mining Corporation v. Ecuador,[33] the government of Ecuador’s effectiveness at regulating protests was also analyzed in a claim alleging violations of the Canada-Ecuador BIT. Commenting on the effectiveness of the police response, and finding Ecuador to be in violation of FPS, FET, and expropriation guarantees by failing to protect the holders of a mining concession from anti-mining protestors, the tribunal determined that Ecuador’s law enforcement officers “should have attempted something to assist Copper Mesa,” although what exactly the police could have done was deemed “difficult to say.”[34] Indicating the tribunal’s belief that some use of force should have been deployed, the tribunal remarked, “[p]lainly, the government in Quito could hardly have declared war on its own people. Yet, in the tribunal’s view, it could not do nothing.”[35] Again, the tribunal goes further in analyzing the effectiveness of law enforcement’s response than the approach in ELSI.
Moreover, in the 2018 award in South American Silver v. Bolivia,[36] a tribunal examined whether Bolivia’s efforts to police community unrest was in violation of the FPS standard in the UK-Bolivia BIT. While the majority of the tribunal found no violation of the FPS guarantee, it did not shy away from making substantive remarks about a potential effective police response. In particular, the tribunal noted that “militarization” was “not only ineffective, but … may also have fatal consequences” – a perspective that was not without contention.[37],[38] In a separate, dissenting opinion, Professor Vicuña remarked that public order was “scarcely and on many occasions insufficiently maintained,” and found the sections of the award rejecting the claimant’s FPS claims to be “questionable.”[39]
Not all recent tribunals have been willing to comment on the respondent’s exercise of policing powers against protestors. The tribunal in Bear Creek Mining Corporation v. Peru, having found that Peru’s actions constituted an unlawful indirect expropriation, declined to determine whether the government had separately violated the treaty’s FPS standard when the claimant’s investment was blockaded by protests from indigenous communities in its 2017 award.[40],[41] Nevertheless, there does appear to be a general trend over time – from awards of the early 2000s, such as in Tecmed, Noble Ventures, and Abengoa, to the present day – of tribunals showing increased willingness to scrutinize the effectiveness of state responses towards protestors and diverge from the standard approach in ELSI. In doing so, the potential for conflict between the investors’ rights to seek protection for their assets and the citizens’ rights to assemble peacefully is at risk of increasing.
4. Mass Protests and Emerging Tensions Between Investment Law and Human Rights law
4.1. Avoiding the Tension: the Risk of Diverging Legal Standards
As highlighted above, the tribunals in Louis Dreyfus, Copper Mesa, and South American Silver all diverted, to some extent, from the approach in ELSI, by taking it upon themselves to scrutinize the adequacy of police responses to protests in FPS claims. In doing so, these tribunals have each made remarks about the legal obligations of states that appear to run contrary to the obligations law enforcement officials are required to adhere to under international human rights law.
In particular, there are two leading soft law instruments: the Basic Principles on the Use of Force and Firearms by Law Enforcement Officials (Basic Principles), and the United Nations Guidance on Less-Lethal Weapons in Law Enforcement (UN Guidance).[42],[43] The Basic Principles were promulgated in 1990 before any of these claims arose, while the UN Guidance more recently came into force in 2020. Both guidelines have subsequently been incorporated into the new UN General Comment No. 37 on the right to peaceful assembly.[44] Together, these legal instruments call upon law enforcement to presume assemblies are peaceful.[45] As the Human Rights Committee has urged, this “presumption of peacefulness” should only be rebutted when violence occurs resulting in “injury, or death, or serious damage to property,” with law enforcement intervening in protests as a matter of last resort.[46],[47]
In contrast, recent tribunals’ decisions have not always recognized this presumption of peacefulness. In Louis Dreyfus for example, having acknowledged protests were largely peaceful, the tribunal nevertheless criticized India for the “limited effectiveness” of its law enforcement response, and questioned whether “police could or should have responded more quickly or in greater force”[48],[49] to the demonstrations. Although the tribunal declined to find a violation of the FPS standard, the tribunal’s reasoning diverges from the Basic Principles, which permit law enforcement to intervene in protests only when there is a serious threat to life or property.[50]
Similarly, in Copper Mesa, the legal standard set by the tribunal to justify intervention by law enforcement also appears to conflict with international human rights law. Here, the tribunal conceptualized the issue at stake as whether the government should have “imposed its will on the anti-miners, acting with all the powers and forces available to a sovereign State,”[51] to ensure that the claimant could access their concession. In analyzing Ecuador’s response to anti-mining protests, the tribunal criticized the government for failing to adopt a harsher stance against the protestors and hence “giving legal force” to their physical blockades.[52] The legal standard adopted by the tribunal in this 2016 award appears to be at odds with the more recent UN Guidance that, to the contrary, obliges law enforcement to adopt the least intrusive measures possible when responding to assemblies. The tribunal’s frank assessment that although the Ecuadorian government “could hardly have declared war on its own people… Yet in the tribunal’s view, it could not do nothing,” conflicts with the prevailing human rights view that law enforcement’s role, first and foremost, is to facilitate protests, not intervene in them.
The emergence of diverging legal standards over protests may damage the international investment regime’s credibility as a forum for arbitrating disputes involving social movements. The award in Copper Mesa, for example, has attracted particular criticism from civil society and the media. According to one NGO report, “[I]n the arbitrators’ upside-down world, apparently the government should have sided with the company against its own citizens during the protest, despite the fact that States are obliged under international law to protect their citizens’ human rights.”[53] By pitting the obligations states owe to foreign investors against the obligations they owe to citizens, investment tribunals risk calling into question the capability of ISDS to handle precisely the types of disputes that are increasingly gaining momentum globally.
Moreover, by failing to appreciate that there is often a balancing act for governments between protecting foreign investors’ property rights and promoting local communities’ right to peaceful assembly, tribunals may also risk doing a disservice to investors, by assuming a culture in which investors are not, or should not be, motivated by human rights considerations—an approach that does not reflect modern-day reality.[54]
4.2. Conflict Avoidance and the Absence of a Human Rights Dialogue
Breaking with the standard approach in ELSI, international investment tribunals now seem to show a greater willingness to scrutinize the effectiveness of law enforcement responses to protests. Yet, as section 4.1 has highlighted, there is a notable absence of discussion in these awards about the tensions that exist between the duties of law enforcement officials to provide protection and security to foreign investments and the duty to facilitate protests being carried out by citizens. In doing so, tribunals are at risk of developing their own legal standards on how law enforcement officials should respond to social movements, which risks further increasing the tension between these two legal regimes.
Yet, increasing tension between these two regimes is not an inevitable consequence of diverging from ELSI. Moreover, there may, in appropriate circumstances, be good reasons for tribunals to analyze state policing efforts more carefully, and not simply defer to the state on the effectiveness of its response. However, when tribunals do diverge from ELSI, this essay has demonstrated why it is important to bear in the mind the potential conflicts that can arise between investment treaties and international human rights law, and why, in turn, tribunals should be more willing to recognize the flexibility that they have within Article 42(1) of the ICSID Convention to include international human rights law within the applicable law governing the arbitration.
Going forward, as Professor William Burke-White suggests, investment tribunals could reduce the tensions arising in these cases by engaging in “interpretive dialogue” with the international human rights regime.[55] This approach would see a more concerted effort by tribunals to analyze whether, and to what extent, the obligations states owe to protestors under international human rights law conflict with treaty obligations owed to investors. As Burke-White has explained, it is through interpretive dialogue that tribunals can engage “in a deep investigation of competing (or potentially competing) substantive legal regimes,” with the effect of “avoiding conflict, increasing harmonization, and promoting the unity of international law.”[56],[57] By highlighting the emergence of diverging legal standards, this essay has attempted to make the case for why future harmonization may be so important in this field.
5. Conclusion
This paper has drawn attention to the rise in investment treaty claims before ICSID involving protestors as well as developments to codify the right to protest in international human rights law. International investment law and human rights law largely provide separate avenues for redress for individuals affected by state action (or inaction) towards protests, but there is nevertheless a growing subset of claims before investment tribunals, where investors’ economic and property rights may come into conflict with the fundamental assembly rights of citizens and local communities.
As this paper has charted, to deal with this conflict, tribunals have followed a conflict avoidance strategy. In the early 2000s, arbitrators simply deferred to the state on the effectiveness of its policing actions, following a longstanding approach exemplified by the ICJ’s decision in ELSI. More recently, tribunals have shown increased willingness to analyze state policing responses; however, they have not been forthcoming in recognizing that these responses necessarily involve a balancing exercise for law enforcement officials between protecting the investors’ property rights and securing the fundamental rights of citizens to assemble. In doing so, tribunals are at risk of developing diverging legal standards for the conduct of law enforcement officials in the international investment law regime than those that exist in international human rights law.
Going forward, the tensions that have arisen in these cases may be more effectively addressed by tribunals willing to engage in interpretive dialogue with international human rights standards pertaining to the protestors’ rights. With the rise in claims of this nature before ICSID, and the recent codification of the right to freedom of assembly by the Human Rights Committee, it is now an opportune moment for tribunals to disperse the tensions between these complementary, yet occasionally conflicting, regimes.
About the Author
Laura Edwards is a Thouron Scholar and LLM Candidate at the University of Pennsylvania, having graduated from the University of Cambridge with a BA in Law. Prior to Penn, Laura worked at an international law firm in London and spent three years living in Myanmar, where she supported the country's peace process, and worked in law and policy roles at a number of international organizations.
Endnotes
Miha Hribernik and Tim Campbell, “Emerging Markets Face Acute Instability as Pandemic Fuels Unrest,” Verisk Maplecroft, July 16, 2020, 1: https://www.maplecroft.com/insights/analysis/emerging-markets-face-unparalleled-civil-unrest-as-economic-impacts-of-pandemic-unfold--study/.
Ibid., 1.
Ibid., 1.
Gran Colombia Gold Corporation v Guatemala ICSID Case No. ARB/18/23.
Id., Notice of Arbitration, May 25, 2018.
Javier Echeverri, “Canadian Miner Makes Good On Earlier Threat to Launch ICSID Arbitration Against Peru,” IA Reporter, Oct 29, 2020.
Jarrod Hepburn and Lisa Bohmer, “Recent Riots in Catalonia Lead to Speculations as to Possible Claims by Foreign-owned Retail Businesses,” IA Reporter, Oct 22, 2019.
“Vodafone, MediaMarkt and Foot Locker Ask the Government for Protection From Looting in Catalonia,” ECD News, October 22, 2019, https://www.elconfidencialdigital.com/articulo/dinero/vodafone-mediamarkt-foot-locker-piden-proteccion-gobierno-saqueos-cataluna/20191021193353132830.html
Christoph Scheuer, “Full Protection and Security,” Journal of International Dispute Settlement, (2010): 353.
UN Human Rights Committee, General Comment No. 37 (CCPR/C/GC/37), July 23, 2020.
Elizabeth Andersen and Jaya Khetarpal, “As Protests Surge Globally, the UN Human Rights Committee Provides Timely Guidance,” ASIL Insights 24, no. 9, November 16, 2020.
UN Human Rights Committee (2020), 8.
Eric de Brabandere, Investment Treaty Arbitration As Public International Law: Procedural Aspects and Implications (Cambridge University Press, 2014), 18.
Bruno Simma, “Foreign Investment Arbitration’,” International and Comparative Law Quarterly 60 (2017): 576.
Priya Pillai, “General Comment No. 37: Translating the “Right to Protest” in Turbulent Times,” Opinio Juris, August 4, 2020, http://opiniojuris.org/2020/08/04/general-comment-no-37-translating-the-right-to-protest-in-turbulent-times/
“HR Committee: ARTICLE 19 welcomes General Comment no. 37 on the right of peaceful assembly,” Article 19, July 31, 2020, https://www.article19.org/resources/hr-committee-article-19-welcomes-general-comment-no-37-on-the-right-of-peaceful-assembly/
UN Human Rights Committee (2020), 6.
Article 19, “HR Committee,” 588.
Article 19, 588.
Case Concerning Elettronica Sicula S.P.A (ELSI) (United States v. Italy), Judgment of 29 July 1989, 15.
ELSI, 108.
Noble Ventures, Inc. v. Romania, ICSID Award, Case No. ARB/01/11.
Noble Ventures, 16.
Ibid., 105.
Abengoa S.A. y COFIDES S.A. v. United Mexican States, ICSID Award, Case No. ARB(AF)/09/2.
Técnicas Medioambientales Tecmed, S.A. v. The United Mexican States, ICSID Award, Case No. ARB (AF)/00/2.
Tecmed, S.A. v. The United Mexican States, 72.
Ibid., 47.
Louis Dreyfus Armateurs SAS v. Republic of India, Award, PCA Case No. 2014-26.
Louis Dreyfus v. India, 26.
Ibid., 156.
Ibid., 35.
Copper Mesa Mining Corporation v. Republic of Ecuador, Award, PCA No. 2012-2.
Copper Mesa v. Ecuador, 26.
Ibid., 27.
South American Silver Limited v. Bolivia, PCA Case No. 2013-15.
SAS v. Bolivia, 186.
Ibid.
Id., Dissenting Opinion of Prof. Francisco Orrego Vicuña, 3.
Bear Creek Mining Corporation v. Republic of Peru, ICSID Award, Case No. ARB/14/21.
Bear Creek Mining v. Peru, 32.
United Nations, “Basic Principles on the Use of Force and Firearms by Law Enforcement Officials,” adopted by the Eighth United Nations Congress on the Prevention of Crime and the Treatment of Offenders, Havana, Cuba, 27 August to 7 September 1990.
United Nations, “Guidance on Less-Lethal Weapons in Law Enforcement,” Office of the United Nations High Commissioner for Human Rights (OHCHR), 2020.
UN Human Rights Committee (2020), 13.
Ibid., 3.
Ibid.
Ibid., 7.
Louis Dreyfus v. India, 156.
Ibid.
UN Basic Principles (1990), Principles 9 and 14.
Copper Mesa v. Ecuador, 26.
Ibid.
“When Arbitrators Award Mining Corporations’ Human Rights Abuses: Copper Mesa v Ecuador,” Corporate Europe Observatory, June 2019, 4, https://corporateeurope.org/sites/default/files/2019-06/Copper%20Mesa%20vs%20Ecuador.pdf
John Ruggie, “Stabilization Clauses and Human Rights, a research project conducted for IFC and the United Nations Special Representative of the Secretary-General on Business and Human Rights,” International Finance Corporation, May 27, 2009, 8.
William Burke-White, “Inter-Relationships between the Investment Law and Other International Legal Regimes,” E15 Task Force on Investment Policy, October 2015, 5.
Burke-White, “Inter-relationships,” 5.
Ibid.