Home Articles posted by Diane Desierto

COP25 Negotiations Fail: Can Climate Change Litigation, Adjudication, and/or Arbitration Compel States to Act Faster to Implement Climate Obligations?

Published on December 19, 2019        Author: 

The failure of the 25th negotiating year by the UN Framework Convention on Climate Change’s (UNFCCC) Conference of Parties (COP25) held this month in Madrid to achieve the necessary global decisions to implement Article 6 of the Paris Agreement on the creation of an international carbon trading system points to some glaring structural – and not just political – deficits in the international system.  While accusations have been heaped on all sides against countries such as Brazil, India, and China (who held out for carryovers of around 4 billion of unsold certified emission reductions or CERS, which represent existing carbon credits under the Kyoto Protocol’s Clean Development Mechanism), Australia (who reportedly argued that carryover of its CERS would show it meets its carbon targets), and the United States (who reportedly argued for language under Article 8 of the Paris Agreement that would insulate the United States from any obligation to compensate for any climate -related loss and damage), no indications have been given on how to break the negotiations impasse well before the COP26 next year in Glasgow.  Only the European Union thus far has put forward bold policies and taken decisions to achieve climate-neutrality for its territory by 2050. This dismal outcome does lead me to doubt what the eminent environmental law scholar Professor Dan Bodansky strenuously argued back in 2016:

“From start to finish, the question of legal form or character was central to the Paris negotiations. The Paris Agreement is a treaty within the definition of the Vienna Convention on the Law of Treaties, but not every provision of the agreement creates a legal obligation. It contains a mix of mandatory and non-mandatory provisions relating to parties’ mitigation contributions, as well as to the other elements of the Durban Platform, including adaptation and finance. One cannot definitively say how much the legally binding character of the Paris Agreement matters. Making the agreement legally binding may provide a greater signal of commitment and greater assurance of com- pliance. But transparency, accountability and precision can also make a significant difference, and legal bindingness can be a double-edged sword if it leads States not to participate or to make less ambitious commitments. Thus, the issue of legal character, though important, is only one factor in assessing the significance of the Paris outcome.” (Italics added.)

Notwithstanding the tremendous global political mobilization galvanized by Greta Thunberg alongside the rise of climate change activism around the world, and the optimism that some in the environmental law community seems to place on the greater impact of transparency in the Paris Agreement to encourage State compliance (one I still shared back in 2015), this year-end 2019 I have less confidence in voluntary cooperative strategies alone. A November 2019 report led by the former Chair of the Intergovernmental Panel on Climate Change confirmed that most countries will not make their Paris Agreement targets:

“To achieve the Paris Agreement’s most ambitious goal of keeping global warming below 1.5 degree Celsius above pre-industrial levels requires reducing global greenhouse gas emissions (GHG) by 50 percent by 2030, and some of these pledges are unlikely to be achieved.

Of the 184 climate pledges, 36 were deemed sufficient (20 percent), 12 partially sufficient (6 percent), 8 partially insufficient (4 percent), and 128 insufficient (70 percent).

Because the climate pledges are voluntary, technicalities, loopholes, and conditions continue to postpone decisive global action to reduce emissions and address climate change.” (Emphasis and italics added.)

Under this reality, shouldn’t the ‘invisible college of international lawyers’ devote more efforts today towards reviving the blunt edge of climate change-based national, regional, or international litigation, adjudication, and arbitration towards reaching sufficiency of climate pledges for 70% of the world, and actual monitoring and enforcement of all climate pledges?  While some might see the proliferation of coercive legal enforcement as perhaps anathema to the deliberate design of the Paris Agreement, the last few years have witnessed a sharp rise in climate change-based domestic litigation; climate change-based petitions at human rights treaty bodies; a recent 2019 Philippine Constitutional Commission on Human Rights report concluding that the Carbon Majors (47 of the world’s biggest fossil fuel firms) could be held legally liable for violating human rights; and various opinions (see here, here, here, here, here, here, among many others) on how international arbitration could be used for climate change-based or climate change-related disputes, especially on challenging the adequacy or appropriateness of the multiple individual mitigation and adaptation policies and strategies of States and businesses and the impacts of those policies and strategies on populations.  There is clearly no shortage of international legal remedies being exhausted for climate change-related disputes, except for the most important one: getting States to act with despatch, negotiate in good faith, and to fulfill Paris Agreement targets sufficiently.  The reason often advanced is that this part of the Paris Agreement is not legally binding and thus cannot be subject of any legal enforcement anywhere.  But is it? While one can plausibly argue that the nationally determined contributions (NDCs) set by States pursuant to the Paris Agreement are not hard legal commitments (as rightly shown by Jorge Vinuales in this blog here, here, and here), as others have argued (here, here, and here) various other procedural obligations as to transparency, reporting, and accountability are legally binding. However, the absence of explicit legal sanction or punitive consequences in the text of the Paris Agreement treaty arguably operates to reinforce, embolden, and empower ‘holdouts’ in the COP negotiations who can take extreme positions to delay reaching decisions to implement the Paris Agreement.

At the very least, I would argue that, even within the hard and soft letter of the Paris Agreement, is interwoven an independent (customary) international legal obligation to negotiate in good faith that could be the substantive basis for incurring international or State responsibility. This obligation does NOT pertain to the specific realization of climate targets, but rather, refers to the good faith obligation of States to ensure that negotiations to implement the Paris Agreement remain meaningful.  This would squarely question whether the holdout positions on maintaining carryover credits under the Kyoto Protocol’s Clean Development Mechanism would still keep negotiations meaningful to realize the international carbon trading system under Article 6 of the Paris Agreement.  In this post, I evaluate the Paris Agreement text (especially Article 6) alongside the objects and purposes of the Agreement and various embedded obligations within the Agreement, against the International Court of Justice’s recent test for determining the existence of an international legal obligation to negotiate as articulated in its 2018 Judgment in Obligation to Negotiate Access to the Pacific Ocean (Bolivia v. Chile):

“…for there to be an obligation to negotiate on the basis of an agreement, the terms used by the parties, the subject-matter and the conditions of the negotiations must demonstrate an intention of the parties to be legally bound. This intention, in the absence of express terms indicating the existence of a legal commitment, may be established on the basis of an objective examination of all the evidence.” (2018 Judgment, para. 91. Italics added.)

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Favourite Readings 2019 – What IS the Real Price of Development?

Published on December 13, 2019        Author: 



As in previous years, EJIL’s Review Editor, Christian J. Tams, has invited EJIL board members and (associate) editors to offer short reflections on their favourite books of the year 2019. No strict rules apply — the posts are meant to introduce books that left an impression, irrespective of their genre. Today we have selections from Diane Desierto. You can read all the posts in this series here.


Do communities and populations have any means of knowing what the real price is of the development decisions made on their behalf by their respective States? Are they always just doomed to reckon with seeking redress after-the-fact for any negative externalities that result from these development decisions (e.g. environmental, health, climate change, labor, alongside a whole host of human rights impacts from these development decisions), resorting to a variably asymmetric (and quite imperfect) spectrum of local, regional, or international dispute settlement processes?  These questions were foremost in my mind throughout 2019, especially given the responsibility of working with fellow Experts for the UN Office of the High Commissioner for Human Rights and the UN Open-Ended Intergovernmental Working Group on the Right to Development with respect to the consultation process and drafting of the legally binding instrument on the Right to Development. Likewise, in a year when the Nobel Prize (technically the Bank of Sweden Prize) for Economics was awarded to development economists Esther Duflo, Abhijit Banerjee, and Michael Kremer (who pioneered the export of Randomized Control Trials (RCT) methods in medical research into experiments on human subjects (mostly the poor) to determine the efficacy of development-funded interventions, but generally without such RCTs being conducted using any universal or global code of ethics), what has been argued by Duflo et al. as the relative end of poverty visibly exemplified by the Chinese model of development (an amalgam of ‘authoritarian capitalism’,“market authoritarianism”, or “capitalism with Chinese characteristics”) certainly provokes much rethinking into what development is under international law, and what costs States can legally and legitimately incur to realize that development. 

Most importantly, at a time when the Intergovernmental Panel on Climate Change (IPCC) has issued various reports pointing to the rapid escalation of environmental risks for the entire planet (see 2019 reports on increased risks given climate change impacts on the oceans and cryosphere, land, and global warming of 1.5 degree Celsius) alongside magnified (and often more open) violations (if not dismissals) of human rights around the world (see human rights global reports here, here, and here), can States’ decision-makers still afford to craft development plans without putting the question of negative externalities from development projects at the forefront of policymaking?

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Announcing our Second EJIL Symposium June 2020: Call for Papers on Inequality and International Law

Published on September 16, 2019        Author: 

International law in the UN Charter, the Universal Declaration of Human Rights, and other foundational treaties and conventions of the multilateral system entails a premise (and promise) of equal rights, the right to self-determination, and the fundamental equality of human beings. However, during the last 10 years and in the wake of the 2008 financial crisis inequality has once again moved to the centre of attention of a number of disciplines, most noteworthy perhaps economics, as well as politics.

We issue this Call for Papers to invite submissions reflecting on the ways that international law – its practice and scholarship – relates to inequality. We chose the plural – inequalities – as we do not intend, from the outset, to narrow the Symposium’s scope to particular forms or actualizations of inequality. Inequalities span access to, or enjoyment of, public resources, and/or state duties to ensure equalities of opportunity regardless of gender, religion, nationality, birth, political or other ideological convictions, status, among others. While the discussion on inequality and international law has been historically concerned with North/South disparities and the quest for equal distribution among states, recent decades have seen a rise in inequality within countries in affluent and weaker economies. Other characteristics of inequality today include the extreme concentration of income at the top and the shrinkage of the middle class in advanced economies. Inequalities persist also in the external relationships of states with other actors (state and non-state) in the international system – as enduring legacies of colonialism in economic development and in post-conflict peacebuilding; as ongoing asymmetries in the efforts to achieve accountability and international justice for victims of internationally wrongful acts; as well as through contested modes of governance over the world’s environment, global commons, and natural resources.  

The interplay between international law and inequality and the special trends related to inequality today invite further research and reflection. Developments such as the rising inequality within countries, the possible decline in inter-country inequality alongside economic growth in emerging market and developing economies challenge our existing legal framing and approaches to the problem of inequality and call for further analysis of the relationship between these trends and international legal principles, doctrines and institutions.

Thus, we invite contributions that conceptualize and problematize the notion of inequality and that examine its doctrinal significance and its usefulness and appropriateness as an analytical concept or as a common concern in international law. We further call for papers that address questions regarding empirical, quantitative and qualitative assessments of inequality within and across societies and states and that assess international law and institutions as cause as well as remedy to inequality. We welcome doctrinal, historiographical, genealogical and sociological engagements with past and present regimes, initiatives, institutions, and instruments and their relationship with inequality as well as biographical engagements with scholars and practitioners who in their work paid particular attention to the question of inequality in international law.

Finally, we welcome engagements with our responsibility as international lawyers. How do we practise international law ethically in light of persisting material inequality, racism and sexism in the world, in our societies, governments and workplaces. What visions or utopias might guide and invigorate our practices? To what extent can we identify persistent inequalities that also suffuse the ‘invisible college’ of international lawyers, and what can be done within international law from both academic inquiry and norms of professional practice?

The call is not restricted to a particular subfield of international law. We would be happy to receive proposals from all fields of international law, including the following themes:

Human Rights: Papers may interrogate the capacity of (social and economic) rights to remedy inequality, or engage with the thesis that (particular conceptions of) human rights detract from social justice concerns.

International Economic Law:Papers may address the question whether international economic law should and how it might allow for global redistribution or contribute to a transformation of political economy that reduces material inequality instead of enhancing it. Further clarification is needed how international economic law (together with transnational and national law) furthers the accumulation of wealth and capital as well as the concentration of corporate power. Contributions may assess calls for a new NIEO or a new Bretton Woods and evaluate them in light of historical experience and in the context of present geopolitical developments. Contributions may also confront the changing face of international economic law – particularly its deepening intersections with human rights law, international environmental law, climate law, among others – and assess how the international economic system engages, perpetuates, or redresses both latent and patent inequalities faced by individuals, groups, peoples, small nations such as low-lying island states, among others.

Sustainable Development Goals: 10 years to go until, by 2030, the SDGs shall be achieved, it may be a good time for an evaluation of their impact so far – not only as concerns the realization of targets, in particular of SDG 10 “Reduced Inequalities” – but also the effects of this governance framework on international law doctrine and the practice of governmental and non-governmental institutions. Can the polycentric approach to SDG governance truly address inequalities, when SDGs are articulated in the grey areas between hard law and soft law?

Migration Law: Given that extreme poverty and global inequality in living conditions are major reasons for global migration, does migration law adequately take account of these causes? Current government policies of exclusion and deterrence not only raise questions as to their conformity with international law, but call into doubt foundational normative justifications of global and national political order. Are instruments such as the Global Compact on Migration and the New York Declaration sufficient to eventually harden into multilateral or regional treaties recognizing shared norms in addressing both protections for migrants as well as the pressures on and opportunities open for receiving populations?

Climate Law: From its inception climate change law has had and still has to come to terms with various inequalities – including inequalities as concerns individual states’ contributions to climate change as well as inequalities as to how communities will be affected by climate change. How does climate law address these inequalities; how should it address them in order not only to effectively contain climate change, but to do so in an equitable manner?

After ‘After Hegemony’: The emergence of  Brazil, Russia, India, China, and South Africa (the BRICS) as a new hub of power in international relations, destabilizing processes in Europe, most evident in Brexit, and the decline of the US as the world’s hegemonic power have triggered new approaches to international law making in recent years.  These new approaches include a shift away from multilateralism toward bilateralism, regionalism and other forms of global governance. These processes are related to inequality in their cause and effects: Can we tie the growing unrest over inequality among different political groups worldwide to the turn away from existing international legal institutions? How are these ideological sensibilities and new forms of mobilization related to new modalities of international regulation? How will these new modalities influence global inequality in the future? 

We are issuing here a Call for Papers. International lawyers from practice and academia as well as scholars from related disciplines are invited to send an abstract of 500 words. Abstracts should not only set out the prospective papers for inclusion in the symposium; they should also concisely formulate the questions addressed as well as the method and materials employed in the proposed research. We will accept proposals for research papers of 10-12K words as well as shorter Think Pieces of 5-7K words.

The deadline for the abstracts is 1 November 2019. Draft papers of those abstracts selected by a committee composed of members of the Editorial Boards of EJIL will be expected by 29 May 2020. We are considering a workshop in June 2020, at a location to be determined, to discuss the drafts. Funding towards the travel expenses of some participants may be available. Final drafts will be expected by 2 November 2020

Abstracts, accompanied by a recent CV in pdf format, are to be sent to EJIL’s Managing Editor at anny.bremner {at} eui(.)euby 1 November 2019.

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Why Arbitrate Business and Human Rights Disputes? Public Consultation Period Open for the Draft Hague Rules on Business and Human Rights Arbitration

Published on July 12, 2019        Author: 

In June 2019, the Draft Hague Rules on Business and Human Rights Arbitration (hereafter, “Draft BHR Arbitration Rules”) was released for global online public consultation, with the consultation period set to end by 25 August 2019.  Judge Bruno Simma chairs the global Drafting Team that has collaborated in developing the draft rules, since the Drafting Team started its work in January 2018 with the support of the City of the Hague.  (Drafting Team Members and Working Group Members all listed here.) The final version of the Hague Rules on Business and Human Rights Arbitration will be published on 10 December 2019.  Before the release of the Draft BHR Arbitration Rules, the Working Group had produced a 2017 concept paper on business and human rights arbitration.  This was followed by the creation and first meetings of the Drafting Team in January 2018; the Drafting Team’s production of its Elements for Consideration in Draft Rules, Model Clauses, and Other Aspects of the Arbitral Process in time for the November 2018 Online Consultation Procedure; the April 2019 meetings of the Drafting Team and the June 2019 publication of the Summary of the Sounding Board Consultationsup to the June 2019 release of the Draft BHR Arbitration Rules.  

As described in the Draft BHR Arbitration Rules:

“The Hague Rules on Business and Human Rights Arbitration provide a set of procedures for the arbitration of disputes related to the impact of business activities on human rights.  The Hague Rules are based on the UNCITRAL Arbitration Rules, with modifications needed to address certain issues likely to arise in business and human rights disputes.  As with the UNCITRAL Arbitration Rules, the scope of the Hague Rules is not limited by the type of claimant(s) or respondent(s) or the type of subject-matter of the dispute and extends to any disputes that the parties to an arbitration agreement have agreed to resolve by arbitration under the Hague Rules.  Parties could thus include business entities, individuals, labor unions and organizations, States and State entities and civil society organizations. Equally, the Hague Rules purposefully do not define the terms “business”, “human rights”, or “business and human rights.” For the purposes of the Hague Rules, such terms should be thus understood at least as broadly as the meaning such terms have under the UN Guiding Principles on Business and Human Rights. However, in the vast majority of cases, no definition of these terms should be necessary at all.

Like the UNCITRAL Rules, the Hague Rules do not address the modalities by which the parties to the arbitration may consent to it nor the content of that consent, which are matters for the parties. Consent remains the cornerstone of business and human rights arbitration, as with all arbitration, and it can be established before a dispute arises, e.g. in contractual clauses, or after a dispute arises, e.g. in a submission agreement (compromis). Model Clauses may provide potential parties with options for expressing their consent to arbitration. In addition, like the UNCITRAL Rules, the Hague Rules do not address enforcement of arbitral awards made under these Rules, which are governed by national law and various treaty obligations, including in most cases the 1958 New York Convention on the Recognition and Enforcement of Foreign Arbitral Awards. While these Rules have been conceived as a uniform set of rules, we acknowledge that the parties remain entitled to exercise their discretion in opting out of certain provisions that do not respond to their specific needs as arising out the dispute at issue. Certain other Model Clauses are being developed in this respect.” (Emphasis added.)

I have served in the Drafting Team under Judge Simma’s leadership since January 2018. My colleagues Martin Doe, Steve Ratner, and Katerina Yiannibas have helpfully crystallized elsewhere several of the main points of innovation contained in the Draft Rules, such as:

“1. provisions on facilitating settlement and mediation, and emphasizing the complementarity of arbitration to such procedures as the OECD National Contact Points system (Articles 1(6), 17(3), 42, and 51)

2. provisions to address the inequality of arms which may arise in such disputes (inter alia, Articles 5(2), 20(4), 24, 27(2), and 27(4));

3. the establishment of the Permanent Court of Arbitration as the default appointing authority, given its intergovernmental nature and experience in business and human rights disputes (Article 6);

4. procedures for multiparty claims and joinder by third parties (Article 17-bis);

5. a procedure for the early dismissal of claims manifestly without merit, developed on the basis of similar procedures in the ICSID, SIAC, SCC, and HKIAC Rules (as well as the proposed new ICSID Rules) (Article 23-bis);

6. provisions making the arbitral tribunal’s power over interim measures more robust, and at the same time more flexible (Article 26);

7. an emergency arbitrator mechanism elaborated on the basis of the ICC and SCC Rules (Article 26-bis);

8. specialized evidentiary procedures drawn up on the basis, inter alia, of the IBA Rules and Rules of the International Criminal Court, among others (Articles 27, 28, and 30(3));

9. measures to protect the identity of parties, counsel, and witnesses where such protections are warranted by the circumstances of the case, while ensuring due process is maintained for all parties (Articles 17(5), 28(3), and 37(5));

10. provisions on transparency and third-party participation (Articles 24-bis and 33-38);

11. tailored provisions on remedies in the business and human rights context (Article 40);

12. rules on applicable law that enhance flexibility and party autonomy (Article 41);

13. rules to protect the public interest in the case of confidential settlements (Article 42(1));

14. nuanced rules in respect of costs and deposits that encourage the tribunal to sensitive to the interests of access to justice (Articles 46-49);

15. an expedited arbitration procedure for small claims (Article 52); and

16. a Code of Conduct that reflects the highest standards for independence and impartiality in international dispute resolution (Annex).”

In this post, I do not aim to provide an authoritative commentary on the Draft Rules (which is exactly what our global online consultation procedure is for).  Rather, and notwithstanding the explicit caveat drawn by the Drafting Team above on leaving the modalities and content of consent to arbitration to the parties, I instead offer my personal observations to examine the essence of main criticisms (see public comments of the Columbia Center for Sustainable Investment here as well as a few questions and comments I received at Harvard Law School in April 2019), directed against having the BHR Arbitration Rules in the first place: 1) whether companies and human rights victims would even consent to arbitration; and 2) if they do consent, whether one should view that consent with skepticism as to the authenticity of arbitration as a mode of access to justice for human rights victims.  The gist of my argument is this: while the BHR Arbitration Rules will never purport to be the exclusively prescribed mechanism for human rights victims of transnational business conduct and neither does it presume to displace State-based judicial or non-judicial remedies, against the realities of a continuing limited universe of legally binding human rights recourse against the impacts of private transnational activities, we cannot afford to close off the arbitral option either. As human rights practitioners well know, no single dispute resolution mechanism for human rights disputes against transnational business is perfect, and even recent national court victories in Lungowe v. Vedanta (as spearheaded by my BHR Drafting Team colleague Richard Meeran of Leigh Day) depend on the jurisdictional openness of a State’s judicial system to transnational tort claims.  The question, in my view, thus has to be reframed away from “why international arbitration?“, to “why not also international arbitration?“.

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The ESCR Revolution Continues: ILO Convention No. 190 on the Elimination of Violence and Harassment in the World of Work

Published on June 28, 2019        Author: 

On 21 June 2019, the International Labour Organization (ILO) adopted the landmark ILO Convention No. 190 (Convention concerning the Elimination of Violence and Harassment in the World of Work).  The labour standards set in this Convention were negotiated over a two year period by ILO member governments, workers’ representatives, and employers’ organizations. The adoption of Convention No. 190 is itself revolutionary, considering that an estimated around 500 million working-age women  live in countries are reported not to have any legal protections against harassment at work. The World Bank reported in 2018 that “in 59 countries, women are not legally protected from workplace sexual harassment.  The lack of legal protection is observed in 70% of the economies in the Middle East and North Africa, half (50%) in East Asia and the Pacific, and one-third (33.3%) in Latin America and the Caribbean.”

In this post, I examine the key landmark detailed provisions of ILO Convention No. 190, and why they present significantly higher protections than the more rudimentary and general provisions in the International Covenant on Economic, Social and Cultural Rights (ICESCR) as well as the protections against sexual harassment indicated in the Convention on Elimination of All Forms of Discrimination Against Women (CEDAW).  In my view, ILO Convention No. 190 largely closes the global regulatory gap on workplace sexual harassment, not just by repeating ICESCR and CEDAW protections, but by adopting the most sweeping application of these protections (and even more substantive protections) to all the foreseeable permutations and changing employment arrangements today in the world of work.  Institutionally, the adoption of ILO Convention No. 190 also formally opens the door for ILO’s regular supervisory system to ensure this treaty’s implementation by States ratifying ILO Convention No. 190, including special procedures under the ILO Constitution, such as the complaints procedure (Articles 26 to 34 of the ILO Constitution) enabling any ILO Member State to file a complaint with the ILO if it finds that any other ILO Member State is not “securing effective observance of any Convention which both have ratified”.  The ILO Governing Body can refer the complaint to a Commission of Inquiry for investigation.  If the respondent ILO Member State does not accept the recommendations of the Commission on Inquiry, the ILO can propose to refer the dispute to the International Court of Justice.  The expansive protections against workplace sexual harassment afforded in ILO Convention No. 190 to all persons (including women) could thus also be more strongly protected in the international legal system as well as in domestic legal systems.  

In the age of MeToo and the increasing global awareness that vulnerabilities to workplace sexual harassment are highest in non-traditional work settings and arrangements where power imbalances are sharpest, ILO Convention No. 190 places human dignity at the center of the global regulatory paradigm.  It will be much harder for workplace sexual harassers and those who commit violence at the workplace to escape and avoid legal responsibility anywhere in the world.

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The Right to Development and Archaic Dichotomies in UNCITRAL ISDS Reforms

Published on May 2, 2019        Author: 

Editor’s Note:  This is the concluding post in this week’s series of several posts critically examining the UNCITRAL ISDS reform process, which held its latest Working Group III meetings in New York on April 2019.  On Monday we featured the introduction from UNCITRAL Academic Forum Chair Malcolm Langford and our Contributing Editor Anthea Roberts, who summarized key points of contention raised by States as to the narrower procedural reforms to ISDS as the mandate of UNCITRAL Working Group III.  Posts on Tuesday (see here and here) from our Contributing Editor Anthea Roberts and her co-author Taylor St. John addressed geopolitical and ideological issues that affect ISDS reforms. On Wednesday, we featured a response post on Costs, from Susan Franck, Academic Forum Member and author of the new 2019 book, Arbitration Costs: Myths and Realities in Investment Treaty Arbitration (OUP, 2019).  EJIL:Talk! Editor Diane Desierto concludes this series, with observations drawn from her own public work today in Geneva, where she is serving as Resource Expert on Institutional Compliance with the Right to Development at the 20th Intergovernmental Working Group Session on the Right to Development, organized by the United Nations Office of the High Commissioner for Human Rights.

It would not have escaped our scrutiny from this week’s excellent posts by Malcolm Langford, Anthea Roberts, Taylor St. John, and Susan Franck that the UNCITRAL ISDS Reform debates of States are taking place with an occluded (if not opaque) understanding of the supposed position(s) of “developing countries”, or indeed, what their respective needs for reform and flexibility in UNCITRAL ISDS reforms are, as each developing country undertakes its desired reform path.  As my colleagues rightly pointed out this week, one cannot approach “developing countries” with a monolithic understanding (or perceived understanding) of a regional, categorical, or group approach. The World Bank dropped the classification of “developing countries” in 2016, given the lack of agreement over the definition of this classification and the deep geographic, topographic, economic, and political diversity even within ‘developing country’ groupings themselves. It is thus entirely obsolete, in today’s international economic system, to even keep assuming that the G77 Non-Aligned Movement of the 1970s would have any degree of settled unanimity today among them as to their respective foreign investment interests, all the more so since there are more capital-exporting States within the “Global South” that are themselves heavily investing across and within the “Global South”.

On the one hand, some “developing countries” have a disproportionately outsized titanic impact on global investment, especially China, which now singularly dominates the writing of the future of the terms of global infrastructure investment through its Belt and Road Initiative (BRI). China’s leading role in global infrastructure investment was on full display at the 2nd Belt and Road Initiative International Forum in Beijing last week, attended by most world leaders, notwithstanding concerns about the new “colonization” seemingly emerging from BRI projects whose terms, as described recently in The Financial Times, are often bilaterally negotiated within an opaque “mish-mash” of   debt-based infrastructure projects affecting about 62% of the world’s population but which still remain non-transparent to all investment affected stakeholders. On the other hand, some ‘developing countries’, such as low-lying island States comprising around 37 States and around 50 million people, face raging existential issues from the climate change onslaught, and continue to face investment treaty claims as respondent host States (e.g. Mauritius has 3 pending, Cabo Verde has 1 pending, Dominican Republic has 6, Barbados has 1, Guyana has 1, Trinidad and Tobago among many others in this UNCTAD list), while the low-lying island States remain just as beholden to take an ISDS system still largely being written by other States contributing to the very phenomenon causing their impending extinction.  

We do not hear much about the economic, political, structural, resource, fiscal, and negotiating power inequalities and asymmetries between and among the “Global South” of “developing countries” in the UNCITRAL ISDS reform debates.  The focus has been on identifying what “developing countries” supposedly think or prefer, rather than taking each State – at whatever stage of development – as they are in evaluating the impacts of the actual distributional decisions they are making today in the ISDS reform process, and particularly whether these decisions are consistent with their commitments to the right to development (and the full range of human rights capabilities encompassed by this right).  Leaving it to States to do this kind of analysis through their respective investment treaty programs, in my view, does not solve any collective action problems arising from the globalization of our ISDS system. Neither does it significantly advance peoples’ right to development when we allocate ISDS reform into ‘procedural’ (for UNCITRAL) and ‘substantive’ (for States in their respective individual investment treaty programs), or characterize individualized State preferences for investment dispute decision-making in shorthand as ‘the West and the Rest’.  The rigor demanded of us in our responsibility to realize the right to development should be an occasion for pause in our use of, and reliance on, all these constructs and dichotomies.

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The Reviewability of the Security Exception in GATT Article XXI in Russia – Traffic in Transit: Implications for South China Sea Investment Disputes in GATT Article XXI-type Clauses in ASEAN Regional Investment Treaties

Published on April 9, 2019        Author: 

The landmark WTO Panel Report on security exceptions in GATT Article XXI came out Friday last week in Russia – Traffic in Transit.  I have written extensively about necessity and national emergency clauses in the past – particularly to reject the position of the supposed wholesale unreviewability of these clauses in the Schmittian sense (on GATT Article XXI exceptions here and here, and on GATT Article XX exceptions, here and here).  The significant valence to this decision, in my view, does not just lie with the Panel’s reasoning (especially as to what they considered to be “objectively” determinable) and its broader implications for the current configuration of the world trading system in this era of increased Trump-driven trade wars.  The greater impact of this decision’s rejection of unreviewability, I submit, will be to enable arbitral tribunals to review security defenses of States anchored on international investment treaties that have purposely grafted GATT Article XXI language.

This phenomenon may be particularly acute for the regional investment treaties of the Association of Southeast Asian Nations (ASEAN). (For the detailed analysis of these clauses, see my previous published work here.)  Attempts by any ASEAN nations (such as the Philippines, Malaysia, Viet Nam, in particular) to impose, in the present or in the future, certain regulatory measures against China-funded development projects or activities of Chinese firms who are increasingly expanding their footprint (from either dredging activities and the creation of artificial islands from dredged and pulverized coral reefs; to tourism; logistics, construction, as well as energy operations in the South China Sea) could, ordinarily, be justified under the GATT Article XXI-type clause of Article 17 (Security Exceptions) in the 2010 ASEAN-China Investment Agreement.  With the declared reviewability of GATT Article XXI in Russia – Traffic in Transit, however, ASEAN Member States should expect that these measures could be challenged (and likely reviewed by arbitral tribunals) in investor-State dispute settlement proceedings permitted under Article 14 of the same 2010 ASEAN-China Investment Agreement.  This is just one illustration of the kind of deep ripple effects that the reviewability of GATT Article XXI-type security exceptions could have across many investment treaties that have kept replicating this clause (and particularly why I have generally, in my own expert work for ASEAN, cautioned against wholesale grafting of trade norms into the regional investment treaties, without setting an explicit treaty provision either rejecting or permitting the justiciability or reviewability of these provisions).  Transposing trade law so unstintingly into investment law creates its own set of unexpected consequences.  Notwithstanding regime differences with world trade law, investor-State arbitral tribunals may find it hard to ignore the authoritativeness of the Russia – Traffic in Transit Panel Report’s finding of reviewability of GATT Article XXI security exceptions.

This post will first give a brief summary of the Panel’s reasoning on reviewability of GATT Article XXI in Russia – Traffic in Transit, anticipating some of the consequences for ongoing trade wars of the United States, the EU, and Russia that depend on the unreviewability of the security exceptions clause in GATT Article XXI. (We expect extensive commentary on this landmark decision from several quarters, and this post certainly does not intend to be the last word on the full elaboration of reasons on all issues in this case.) The remaining part of this post focuses on GATT Article XXI-type security exceptions clauses in the ASEAN regional investment treaties, and how the reviewability of these clauses could potentially impact the investment and development dimension in the South China Sea disputes.

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SCOTUS Decision in Jam et al v. International Finance Corporation (IFC) Denies Absolute Immunity to IFC…With Caveats

Published on February 28, 2019        Author: 

Editor’s Note: In view of this landmark SCOTUS decision yesterday, this post is a brief deviation from our ongoing Symposium for the ESIL Interest Group on Migration and Refugee Law on the UN Global Compacts on Migration and Refugees: The Twin Peaks?.  We immediately continue with the Symposium after this post.

When it rains, it somehow pours. February 2019 ended up being such a landmark month for international law adjudication.  A day after the International Court of Justice released its landmark Chagos Advisory Opinion (finely discussed by Marko Milanovic here), the Supreme Court of the United States (SCOTUS) issued its 27 February 2019 decision in Jam et al. v. International Finance Corporation, (586 U.S. ___ 2019).  The decision squarely rejects the defense of absolute immunity invoked by the International Finance Corporation (IFC) through the United States’ International Organizations Immunities Act (IOIA) of 1945, with respect to a damages suit for negligence, nuisance, trespass, and breach of contract filed in 2015 before the US District Court for the District of Columbia, by a group of farmers and fishermen in India (with assistance from the NGO EarthRights), concerning the IFC’s inadequate supervision of the environmental and social action plan over its US$450 million loan to construct a coal-fired power plant in the state of Gujarat.  The damages suit invokes the IFC’s own internal audit through the Compliance Advisor Ombudsman (CAO), admitting that the IFC did not adequately supervise the environmental and social action plan for the project.  

Last week, I wrote about the evidence from Inspection Panel’s body of investigation reports in about 131 cases thus far, showing ongoing gaps between the World Bank’s articulated commitments to Agenda 2030 and the Paris Agreement, with its actual operational practices in environmental and social action compliance methods that deliberately refuse to internalize the actual international human rights, environmental, climate change, and labor obligations of States in the Bank’s lending operations for development projects. In this respect, the SCOTUS decision is of landmark impact, because it opens the door for US courts to potentially determine the nature of the IFC’s legal responsibilities beyond the lines of accountability internally designed at the World Bank through the independent Inspection Panel or the compliance auditing process at the CAO.  Whether or not the suits will prosper on the merits, of course, is another matter altogether, noting how business and human rights litigation strategies have evolved in the United States after SCOTUS decisions in Kiobel v. Royal Dutch Petroleum and Jesner v. Arab Bank PLC.  

There are also caveats to the decision itself, as carefully penned by SCOTUS Chief Justice Roberts.  When one goes through the Court’s reasoning, the Court also signaled that “restrictive immunity hardly means unlimited exposure to suit for international organizations.” 

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Lingering Asymmetries in SDGs and Human Rights: How Accountable are International Financial Institutions in the International Accountability Network?

Published on February 22, 2019        Author: 

The recent US nomination (and thus de facto appointment) of well-known World Bank critic and US Treasury official, John Malpass, as the new World Bank President following the abrupt resignation of Jim Yong Kim (former Dartmouth College president who announced he was leaving the World Bank for opportunities in the private sector) brought a slew of criticisms (see here, here, and here) against the United States’ traditional prerogatives of appointing the World Bank President, in tandem with the European Union’s counterpart prerogatives in appointing the Managing Director of the International Monetary Fund (IMF).  The tradition arises from a “gentlemen’s agreement” struck at Bretton Woods at the inception of the World Bank and IMF.  Neither the IMF Articles of Agreement or the World Bank Group’s Articles of Agreement contain any whiff of this gentlemen’s agreement – but they are effectively carried out because of the United States’ overwhelming voting power at the World Bank and the European Union’s counterpart voting power at the IMF.  In any event, contestations over power and leadership of the Bretton Woods institutions are not exactly new – they are precisely the same matters that have impelled rival geopolitical powers such as China and Russia to set up new international financial institutions (IFIs) where their influence and leadership can be more palpable, as seen from the BRICS New Development Bank and the Asian Infrastructure Investment Bank. Leadership contests at the IFIs – often between one hegemon and other fellow hegemons in the international system – do not, however, scrutinize the real nature of accountability of IFIs under their development mandates, as to the populations for whom such mandates were created to begin with.  During his presidency at the World Bank, Jim Yong Kim was heavily criticized for soliciting private funders in Wall Street to finance the Bank, sourcing capital infusions beyond the traditional donations of governments.  World Bank staff challenged him for his managerial style and the lack of strategic direction, that was alleged to be inconsistent with the Bank’s actual development mandate.  

Even as the IFIs continued to tout “inclusive growth” at the November 2018 G20 meetings – a goal which the World Bank defines as “growth that allows people to contribute to and benefit from economic growth” – it is quite remarkable to this day that IFIs shirk from openly embracing their own member States’ human rights treaty obligations as the normative template for their development mandates, preferring to refer strictly to their internal mandates under their respective Articles of Agreement.  (On this point, see the interesting 2017 article by Thomas Stubbs and Alexander Kentikelenis).  It may be recalled that the UN Independent Expert for a Democratic and Equitable International Order, Mr. Alfred de Zayas, formally called on the World Bank in September 2017 to align their articles of agreement with human rights, and to ensure that development projects with Members’ own international human rights commitments, all the more so because the World Bank could not afford to be a “human rights-free zone”.  

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