Malcolm Rogge’s The Tribunal/El tribunal is a clear and impactful documentary film that conveys the real injustice of ISDS and the absurdity of an investor being able, in effect, to buy the right to violate human rights, albeit with some reduction of damages for contributory fault.

In this case, it’s only a matter of luck that no one got killed by the security guards, and that is clear from the footage of the 2006 assault on the local protesters. The Ecuadorian government had to step in to prevent a social disaster from happening, one which the corporation effectively brought upon itself through its ignorance of, and apparent indifference to, the human rights of the local people. But that only allowed for a 30% reduction of the damages that Ecuador was ordered to pay.

Arguably, the behaviour of the Canadian investor should have rendered its claim inadmissible, but the law of BITs in its current form does not recognize such options. There is a ray of hope in that some tribunals have accepted they could adjudicate human rights counterclaims against investors (although dismissing them on merits, in this case) or that claims related to investments procured by corruption cannot proceed (e.g., see here, here, and here, especially para. 113). However, such cases remain rare.

The film offers a strong argument for tribunals being more open to human rights issues and to gathering relevant evidence from local witnesses and from site visits. Had the arbitrators made such a visit and heard the witnesses, who were pointlessly taken to Washington only to be ignored, they would be struck by the sheer beauty of the place and the dangers to the environment, both natural and human, that the Canadian investment threatened.

It seems that the local community lives by the rules of the natural environment, while the corporation seeks simply to exploit the environment for profit. That said, there is no doubt that a lot of local people would defend the investment. The closing remark about how the new Chilean investors are dividing the community through payoffs and performative social contributions was particularly poignant.

It is heartening to see from the film that the Supreme Court of Ecuador has sufficient independence from the government to halt further investment. Notwithstanding its intervention in relation to Copper Mesa, which led to the Canadian investor’s claim for expropriation, the Ecuadorian government doesn’t come out too well. The film highlights that, on the one hand, the government encourages investment, but on the other, it postures as helping its citizens while undermining them at the same time. The film thus hints at a latent tension at the heart of many national investment policies around the world: the tension between the wishes of local populations to have their livelihoods improved by good and sustainable foreign investment, on the one hand, and the common objective of developing countries’ governments to simply attract more foreign investment regardless of the impacts, on the other. Only time will tell whether recent developments in Ecuadorian politics will shift the balance in favour of their populations or the investors.

After seeing the film, it is hard to know what the lawyers who represent corporations which infringe human rights truly believe. Their brief—to defend their client’s investor rights under the applicable BIT—prevents them from asking themselves, at least professionally, if not personally, the kinds of human-focused questions raised by the film.

Equally, what do the arbitrators truly think? They can use their power to develop the law creatively, as they have done over the years to expand investor protection.^[1] As noted above, some arbitrators have begun to consider human rights questions. Indeed, in this case, the very fact that damages were reduced for contributory fault was a small step in the right direction. As persons charged with the application of international law, they should not be able to hide from its well-known commitment to upholding human rights (e.g., through Article 31(3)c of the VCLT). However, human rights rarely, if ever, trump investment protection in ISDS practice. How strange it is that a powerful international legal process such as ISDS does not allow for these voices to be heard and, instead, contains multiple obstacles to having them translated into legally enforceable claims.

The film illustrates how the peace of the Intag community in Ecuador has been threatened from abroad, first by a Canadian mining corporation and now by a Chilean mining corporation collaborating closely with the government. While there is nothing wrong with foreign investors making sustainable, human rights-compliant investments for the good of a community, where investors do the opposite, the system of ISDS cannot sit idly by and ignore the impact of human rights law on the functioning of BITs.

With some noble and laudable exceptions of individuals who are already doing this, arbitrators and legal counsel must integrate human rights properly into ISDS to ensure justice for those adversely affected by corporate behaviour. A good starting point would be to watch this film and listen to the voices of the people affected.

Author

Peter Muchlinski, Emeritus Professor of International Commercial Law, The School of Law, The School of Oriental and African Studies (SOAS), University of London, United Kingdom.

Note

The Tribunal, Directed by Malcolm Rogge, Produced by Columbia Center on Sustainable Investment, 2023.

^[1] Muchlinski, P. (2021). Multinational enterprises and the law (Third edition). Oxford University Press, Chapter 16.

Photo: Image submitted as evidence to the Tribunal of paramilitary forces attempting to enter the community of Junin. Credit: Elisabeth Weydt