WTO promotes same investors rights that have cost Latin American and Caribbean states 20.6 billion USD so far
As Trade Ministers from 164 countries meet in Buenos Aires, Argentina this week for the 11 World Trade Organisation (WTO) Ministerial conference,
the Transnational Institute has published a new report that analyses the 234 known investment arbitration lawsuits against Latin American and Caribbean (LAC) states.
ISDS in Numbers shows that LAC countries are among the most affected by the investment arbitration system worldwide, representing 28.6% of all known investor-state disputes around the world. In particular, Argentina, Venezuela, Mexico, Ecuador, Bolivia and Peru accounts for 77.3% of the total number of claims against LAC countries.
Since 1996 (the time of the WTO Ministerial in Singapore), many countries have been pressing for the inclusion of investment protection on the agenda of the WTO. Developing countries have resisted multilateral negotiations of this issue for decades. This year, despite India’s objections , the issue of investor’s rights has resurfaced on the agenda, framed as “Investment facilitation”.
“Argentina’s enthusiasm for investment protection is incomprehensible. They are still signing new investment protection treaties and cheer leading investment facilitation on the WTO agenda even though the country has been sued more often than any other in the region and has lost 88% of the concluded cases,” said Luciana Ghiotto, researcher with the Transnational Institute.
The report also reveals that investors have won in 70% of the cases brought against LAC countries. As a result, LAC States have already had to pay foreign companies 20.6 billion USD, ten times the total cost of rebuilding in Mexico after the 2017 earthquakes. To give other examples, it is equivalent to half of Argentina’s public health budget, or could cover Bolivia’s budget for health and education for four whole years. The highest amount ever paid by a country as a result of a single claim was the 5 billion USD paid by Argentina to the Spanish multinational Repsol in a settlement.
Finally, the report highlights that investors from the United States, Canada and Europe brought 89% of the total claims. Furthermore, 23% of the claims concern the mining, gas and oil sectors. Investors have challenged government policies that seek to protect the environment and the rights of communities, as well as policies to make companies pay more taxes to the state in these sectors.
“Governments in Latin America and the Caribbean should assess the proven negative impacts vis-a-vis the promised, mostly unrealised, benefits of the investment protection regime before moving on with new negotiations either at bilateral or multilateral level” warned Cecilia Olivet, researcher with the Transnational Institute and one of the authors of the report.
For more information, contact:
Cecilia Olivet: ceciliaolivet[at]tni.org
Luciana Ghiotto: luciana.ghiotto[at]gmail.com