On the changing structure of international investment law: The human right to water and ICSID arbitration

International Community Law Review

Volumn 12, Issue 3, 2010, Pages 335-359

  Marrella, Fabrizio ^a,b  

^a CA' FOSCARI UNIVERSITY OF VENICE   (Italy)

^b The European Inter University Center for Human Rights and Democratization (EIUC)   (Italy)

Author keywords

human rights; ICSID arbitration; right to water

Indexed keywords

EID: 77954810920     PISSN: 18719740     EISSN: 18719732     Source Type: Journal    
DOI: 10.1163/187197310X513734     Document Type: Article

References (107)

1. For a general discussion see W. Benedek, K. De Feyter and F. Marrella, Economic Globalisation and Human Rights (2007);
2. D. Carreau and P. Jolliard, Droit international économique, Paris: Dalloz, 4th edition, 2010.
3. See: F. Marrella, Regolazione internazionale e responsabilità globale delle imprese transnazionali, 3 Diritti Umani e Diritto Internazionale (2009) 229-258;
4. F. Marrella, F. Galgano, Diritto e prassi del commercio internazionale (2010); Benedek et al., Economic Globalisation and Human Rights (2007);
5. M. Fitzmaurice, The Human Right to Water, Fordham Environmental Law Review (2007)538-586;
6. J. Razzaque, Trading Water: the Human Factor, Review of European Community and International Environmental Law (2004) 15-26;
7. A. Tanzi, Controversial Developments in the Field of Public Participation in the International Environmental Law Process, in P.-M. Dupuy and L. Vierucci (eds.), NGOs in International Law: Efficiency in Flexibility? (2008), pp. 135-152;
8. A. Tanzi and C. Pitea, Emerging Trends in the Role of Non-State Actors in International Water Disputes, in Resolution of international water disputes: papers emanating from the Sixth PCA International Law Seminar (8 November 2002), 2003, pp. 259-297;
9. Stan Bernstein, Freshwater and Human Population: A Global Perspective, in Karin M. Krchnak (ed.), Human Population and Freshwater (2002), pp. 149-157, available at: http://environment. yale.edu/documents/downloads/0-9/107Bernstein. pdf;
10. T. Treves, M. Frigessi di Rattalma, A.Tanzi, A. Fodella, C. Pitea and C.Ragni (eds.), Civil Society, International Courts and Compliance Bodies (2005);
11. T. Treves, L. Pineschi, A. Tanzi, C. Pitea, C. Ragni and F. Romanin Jacur (eds.), Non-Compliance Mechanisms and Procedures and the Effectiveness of International Environmental Agreements (2009).
12. See Art. 25 of the UDHR where it is envisaged in broad terms a standard of living adequate for the health and wellbeing ⋯ including food, clothing, housing.
13. UNTS 3.
14. UNTS 195.
15. - 1249 UNTS 13.
16. See Art. 14(2)(h) where it it speaks of adequate living conditions, particularly in relation to housing, sanitation, electricity and water supply.
17. - 1577 UNTS 3.
18. See Art 24(2)(c) where the convention provides to combat disease and malnutrition ⋯ through the provision of adequate nutritious foods and clean drinking-water.
19. See the Resolution of the Human Rights Council adopted on 12 October 2009 on Human Rights and access to safe drinking water and sanitation, Doc. A/HRC/RES/12/8.
20. See http://www.unece.org/env/water/text/text-protocol.htm (visited on 20 May 2010).
21. See The Center for Economic and Social Rights, The Right of Access to Water: Relevant Constitutional Provisions. (Listing: Ethiopia, Gambia, Guatemala, Panama, Uganda, South Africa, Venezuela, and Zambia.
22. See in particular Uruguay Constitution (2004),
23. See also Ecuador's Constitution (2008), Arts. 13, 41 and transitoria 4.
24. See Lindiwe Mazibuk, and Others v. Johannesburg Water and Others, South African High Court, Witwatersrand Local Division, Case no: 06/13865 (July 7, 2007)
25. P. Bond, J. Dugard, The case of Johannesburg water: what really happened at the pre-paid 'Paris pump', in Law, Democracy and Development, at http://www.ukzn.ac.za/ccs/files/Bond%20Dugard%20LDD.pdf (visited on 15 May 2010).
26. Indian Supreme Court in M C Mehta v. Union of India 2004 (12) SCC118, about Coca Cola operations in Kerala. Art. 8 of the ECHR seems to covers such a situation (EctHR, Lopez Ostra v. Spain, 9 December 1994). The Court sayed the State did not succeed in striking a fair balance betw. the interest of the town (having a waste-treatment plan) and the applicant's enjoyment of her right to respect for her home and her private and family life.
27. Art. 8 of the ECHR seems to covers such a situation (EctHR, Lopez Ostra v. Spain, 9 December 1994). The Court sayed the State did not succeed in striking a fair balance betw. the interest of the town (having a waste-treatment plan) and the applicant's enjoyment of her right to respect for her home and her private and family life.
28. On shareholder rights under ECHR law in general see: Agrotexim Hellas SA and Others v. Greece A 330 (1995);
29. - (1996) 21 EHRR 250
30. Association and H. v Austria (1984) 36 DR 187 at 191-2
31. Matos e Silva Lda and Others v. Portugual 1996-IV 1092
32. - (1997) 24 EHRR 573
33. Société Colas Est et autres v. France 2002-III 421
34. Autronic AG v. Switzerland A 178 (1990)
35. - (1990) 12 EHRR 485
36. Demuth v Switzerland 2002-IX 704
37. - (2004) 38 EHRR 20
38. Comingersoll SA v. Portugal 2000-IV 355
39. - (2001) 31 EHRR 772
40. On shareholder rights under Protocol 1(1) in particular: Olczak v. Poland, Decision of November 7, 2002, EHRR 2002-X 61
41. Company S-S I AB and BT v. Sweden, Application 11189/84 (1986) 50 DR 121, 138
42. Bramelid and Malmström v. Sweden, Application 8588-89/79 (1982) 29 DR 64, 81
43. - (1983) 5 EHRR 249
44. For an extensive analysis see Marius Emberland, The Human Rights of Companies: Exploring the Structure of ECHR Protection (2006), pp. 65 et seq.
45. See for example J. Stiglitz, Making Globalization Work (2006).
46. Part of the OECD Declaration and Decisions on International Investment and Multinational Enterprises, updated June 2000.
47. Adopted November 1977, 204th Session, amended November 2000, 279th Session (2001), http://www.ilo.org/public/english/employment/multi/download/ english.pdf.
48. One may add in such a framework the 1977 Code of Conduct for Companies Operating in South Africa during apartheid which was adopted by the European Economic Communities, see U.N. Doc. A/32/267.
49. See U.N. Econ. & Soc. Council (ECOSOC), Sub-Comm. On Promotion and Protection of Human Rights, The United Nations Norms on the Responsibilities of Transnational Corporations and Other business Enterprises with Regard to Human Rights, U.N. Doc. E/CN.4/Sub.2/2003/12/Rev.2 (26 August 2003).
50. Responsibilities of Transnational Corporations and Other business Enterprises with Regard to Human Rights, C.H.R. Res. 2004/116, U.N. ESCOR, Commission on Human Rights, 60th Session, U.N. Doc. E/CN.2/2004/L.73/Rev.1 (2004).
51. http://www.unglobalcompact.org
52. See the critical views expressed by R. Girard in http://www. polarisinstitute.org/files/UNreport.pdf (visited on 15 May 2010).
53. The mission statement is as follows: The CEO Water Mandate seeks to make a positive impact with respect to the emerging global water crisis by mobilizing a critical mass of business leaders to advance water sustainability solutions - in partnership with the United Nations, civil society organizations, governments, and other stakeholders. As a special initiative of the UN Secretary-General, The CEO Water Mandate offers a unique action platform to share best and emerging practices and to forge multistakeholder partnerships to address the problems of access to water and sanitation. The CEO Water Mandate covers six areas: Direct Operations; Supply Chain and Watershed Management; Collective Action; Public Policy; Community Engagement; and Transparency. Endorsers of The CEO Water Mandate recognize that through individual and collective action they can contribute to the vision of the UN Global Compact and the realization of the Millennium Development Goals. See http://www. unglobalcompact. org/issues/Environment/CEO-Water-Mandate/.
54. Id.
55. Human Rights Resolution 2005/69,http://www.business-humanrights.org
56. Protect, Respect and Remedy: A Framework for Business and Human Rights, Report of the Special Representative of the Secretary-General, John Ruggie, U.N. GAOR, Human Rights Council, 8th Session, Agenda Item 3, U.N. Doc. A/HRC/8/5 (2008).
57. In his 2008 report, John Ruggie singled out the OECD guidelines for multinationals as the most widely applicable standard confirmed by governments. In his view, these guidelines should be reviewed, because they are too unspecific on human rights and fall short of many voluntary business standards. However, it should be noted that OECD national contact points fulfill an important function amongst non-judicial remedies, as recognized by Prof. Ruggie in his latest reports.
58. Respect for human rights is not only a responsibility of multinational companies but is also incumbent in equal measure on domestic companies.
59. Protect, Respect and Remedy: A Framework for Business and Human Rights, Report of the Special Representative of the Secretary-General, John Ruggie, U.N. GAOR, Human Rights Council, 8th Session, Agenda Item 3, U.N. Doc. A/HRC/8/5 (2008), paras 57-58.
60. Id. Para. 58: For the substantive content of the due diligence process, companies should look, at a minimum, to the international bill of human rights and the core conventions of the ILO, because the principles they embody comprise the benchmarks against which other social actors judge the human rights impacts of companies.
61. Id. para. 61
62. Id. para. 62
63. Id. para. 63.
64. Human Rights Impact Assessments - Resolving Key Methodological Questions, Report of the Special Representative of the Secretary-General, John Ruggie, U.N. GAOR, Human Rights Council, 4th Session, Agenda Item 2, U.N. Doc. A/HRC/4/74 (2007).
65. See Business and Human Rights: Further steps toward the operationalization of the protect, respect and remedy framework, Doc. A/HRC/14/27, issued on 9 April 2010.
66. U. Kriebaum, Privatizing Human Rights, Transnational Dispute Management (2007) 3-5
67. See also S. Pannatier and O. Ducrey, Water Concessions and Protection of Foreign Investments under International Law, in E. Brown Weiss, L. Boisson de Chazournes and N. Bernasconi-Osterwalder (eds.), Fresh Water and International Economic Law, (2005)
68. as well as P. Thielborger, The Human Right to Water versus Investors Rights: Double Dilemma or Pseudo-conflict?, in P.M. Dupuy, F. Francioni and E. Petersmann (eds.), Human Rights in International Investment Law and Arbitration (2009), pp. 487 et seq.
69. See: Compañía de Aguas del Aconquija S.A. and Vivendi Universal v. Argentine Republic (ICSID Case no. ARB/97/3);
70. Aguas Provinciales de Santa Fe, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Interagua Servicios Integrales de Agua, S.A. v. Argentine Republic (Case no. ARB/03/17)
71. Aguas Cordobesas, S.A., Suez, and Sociedad General de Aguas de Barcelona, S.A. v. Argentine Republic (Case no. ARB/03/18)
72. Aguas Argentinas, S.A., Suez, Sociedad General de Aguas de Barcelona, S.A. and Vivendi Universal, S.A. v. Argentine Republic (Case no. ARB/03/19)
73. Azurix Corp. v. Argentine Republic (ICSID Case no. ARB/01/12)
74. Aguas del Tunari S.A. v. Republic of Bolivia (ICSID Case no. ARB/02/3)
75. Azurix Corp.v. Argentine Republic (ICSID Case no. ARB/03/30)
76. SAUR International v. Argentine Republic (ICSID Case no. ARB/04/4)
77. Anglian Water Group v. Argentine Republic, UNCITRAL arbitration filed in 2003
78. Biwater Gauff (Tanzania) Ltd. v. United Republic of Tanzania (ICSID Case no. ARB/05/22)
79. Impregilo S.p.A. v. Argentine Republic (ICSID Case no. ARB/07/17)
80. Urbaser S.A. and Consorcio de Aguas Bilbao Biskaia, Bilbao Biskaia Ur Partzuergoa v. Argentine Republic (ICSID Case no. ARB/07/26).
81. M. Hirsch, Investment and non investment obligations, in P. Muchlinskly, F. Ortino and C. Schreuer (eds.), Oxford Handbook of International Investment Law (2008), p. 163.
82. Compañía de Aguas del Aconquija S.A. and Vivendi Universal S.A. v. Argentine Republic (ICSID Case No. ARB/97/3). Award of November 21, 2000, decided by Judge Francisco Rezek (President);
83. Judge Thomas Buergenthal and Peter Trooboff: 16 ICSID Rev. - FILJ 641 (2001)
84. ILM 426 (2001)
85. I.L.R. 1 (2004)
86. Y.B. Com. Arb. 61 (2001) (excerpts).
87. ICSID Case No ARB/97/3, Award, para. 28.
88. Id., para. 63.
89. ICSID Case No ARB/97/3, Decision on annulment. This time, arbitrators were Prof. James Crawford, Prof. J. Carlos Fernandez Rosas and Yves Fortier (President).
90. According to the Argentine Republic, the Committee had failed to decide upon an omission made by the Arbitral Tribunal regarding one of the arguments made by the Argentine Republic during the main arbitral proceeding. The Argentine Republic also argued that there were material errors in the decision.
91. Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A v. Argentine Republic (ICSID Case No. ARB/03/19).
92. Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A v. Argentine Republic (ICSID Case No. ARB/03/19).This case was originally registered by ICSID as Aguas Argentinas S.A., Suez, Sociedad General de Aguas de Barcelona S.A. and Vivendi Universal S.A. v. the Argentine Republic (ICSID Case No. ARB/03/19).
93. On April 14, 2006, the Arbitral Tribunal issued Procedural Order No.1 Concerning the Discontinuance of Proceedings with Respect to Aguas Argentinas S.A. (available online at http://www.worldbank.org/icsid/cases/ARB-03-19-PO-NO1. pdf ).
94. Art. 37, par.2, provides that: After consulting both parties, the Tribunal may allow a person or entity that is not a party to the dispute (in this Rule called the "non-disputing party") to file a written submission with the Tribunal regarding a matter within the scope of the dispute. In determining whether to allow such a filing, the Tribunal shall consider, among other things, the extent to which: - (a) the nondisputing party submission would assist the Tribunal in the determination of a factual or legal issue related to the proceeding by bringing a perspective, particular knowledge or insight that is different from that of the disputing parties; -(b) the non-disputing party submission would address a matter within the scope of the dispute; -(c) the non-disputing party has a significant interest in the proceeding. The Tribunal shall ensure that the non-disputing party submission does not disrupt the proceeding or unduly burden or unfairly prejudice either party, and that both parties are given an opportunity to present their observations on the non-disputing party submission.
95. Order in Response to a Petition for Transparency and Participation as Amicus Curiae of May 19, 2005, 21 ICSID Rev. - FILJ 342 (2006).
96. See L. Petersen, http://www.dd-rd.ca/site/-PDF/publications/ globalization/HIRA-volume3-ENG.pdf(visited on 20 May 2010). Note that reference to human rights is also found in another arbitration concerning water and sewer services concession agreement, Azurix v. Argentina (ICSID Case No. ARB/01/12, final award of 14 July 2006) although the arbitration tribunal (Andrés RIGO SUREDA, president; with Marc LALONDE from Canada and Daniel H. MARTINS from Uruguay) has concluded that (para. 261):The Respondent has also raised the issue of the compatibility of the BIT with human rights treaties. The matter has not been fully argued and the Tribunal fails to understand the incompatibility in the specifics of the instant case. The services to consumers continued to be provided without interruption by ABA during five months after the termination notice and through the new provincial utility after the transfer of service.
97. Id.
98. CMS Gas Transmission Company v. The Argentine Republic, ICSID Case No. ARB/01/8, Award of May 12, 2005, paras. 304-394, available at http://www.worldbank.org/icsid/cases/CMS-Award.pdf.
99. See generally A. Reinisch, Necessity in International Investment Arbitration - An Unnecessary Split of Opiniones in Recent ICSID Cases?, 8 The Journal of World Investment & Trade (2007), pp. 191-214
100. A.K. Bjorklund, Emergency Exceptions: State of Necessity and Force Majeure in P. Muchlinski, F. Ortino and C. Schreuer (eds.), The Oxford Handbook of International Investment Law (2008), pp. 460-523.
101. Enron Corporation and Ponderosa Assets, L.P. v. Argentine Republic, ICSID Case No. ARB/01/3, Award of May 22, 2007 paras. 288 345, available at http://ita.law.uvic.ca/documents/Enron-Award.pdf.
102. See however LG&E Energy Corporation v. Argentina, by contrast, exempted Argentina from State responsibility on similar facts and arguments for a limited period of time (LG&E Energy Corp., LG&E Capital Corp., LG&E International Inc. v. The Argentine Republic, ICSID Case No. ARB/02/1, Decision On Liability of Oct. 3, 2006, paras. 201-266, available at http://www.worldbank.org/icsid/cases/pdf/09-LGE-Liability-e.pdf )
103. Bundesverfassungsgericht [BVerfG], Decision of May 8, 2007, available at http://www.bverfg.de/entscheidungen/ms20070508-2bvm000103.html.
104. Aguas del Tunari v. Bolivia, ICSID case No ARB/02/3, Decision on Jurisdiction, 21 October 2005. The Decision on Jurisdiction was rendered on October 3, 2005, by a Tribunal comprised of Mr. Henri C. Alvarez, a Canadian national, appointed by the Claimant, Dr. José Luis Alberro-Semerena, a national of Mexico, appointed by the Respondent, and Professor David D. Caron, a U.S.national, appointed by the Centre pursuant to Article 38 of the ICSID Convention and Rule 4 of the ICSID Arbitration Rules.
105. R. Glennon, Water Scarcity, Marketing and Privatization, Texas Law Review (2005) 1873, at 1894.
106. Order taking note of the discontinuance pursuant to ICSID Arbitration Rule 44 issued by the Tribunal on March 28, 2006 (see http://icsid.worldbank. org/ICSID/Index.jsp, visited on 15 May 2010).
107. Biwater Gauff (Tanzania) Limited v. United Republic of Tanzania (ICSID Case No. ARB/05/22), award of 24 July 2008. The arbitrators were Gary Born (USA), Toby Landau (U.K) and Bernard Hanotiau (president, Belgian). See http://icsid.worldbank.org/ICSID/FrontServlet?requestType=CasesRH&actionVal= showDoc&docId=DC770-En&caseId=C67 .