Uninvited guests: NGOs, amicus curiae briefs, and the environment in investor-state dispute settlement.

Author:Mikadze, Kirsten
 
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  1. INTRODUCTION II. CONVERGENCES, COLLISIONS, AND COMPLEXITY: THE INVESTMENT REGIME AND THE ENVIRONMENT IN CONTEXT 1. THE INVESTMENT REGIME, ISDS, AND THE ROLE OF NON-STATE ACTORS A. ISDS IN BROAD STROKES 2. CLASHES AND TENSIONS IN INTERNATIONAL LAW A. FUNCTIONALISM, FRAGMENTATION, AND COMPLEXITY IN INTERNATIONAL LAW B. OPEN, ENVIRONMENTALLY RESPONSIVE REGIMES AND PRODUCTIVE INTERACTIONS WITH THE ENVIRONMENT III. WHERE AND HOW HAVE INTERACTIONS OCCURRED BETWEEN INVESTMENT AND ENVIRONMENT? 1. EVER THE TWAIN SHALL MEET? THE INTERNATIONAL INVESTMENT REGI AND ITS "OTHERS" 2. NGOS IN THE INTERNATIONAL INVESTMENT REGIME A. THE AMICUS CURIAE BRIEF IN ISDS B. GOOD, BAD, OR SOMETHING IN BETWEEN? IV. NGO EFFORTS TO BRING ENVIRONMENTAL ISSUES INTO THE INVESTMENT REGIME: PACIFIC RIM CAYMAN LLC V REPUBLIC OF EL SALVADOR 1. THE AMICUS CURIAE BRIEF 2. IMPACTS: THE TRIBUNAL'S RESPONSE TO THE BRIEF 3. CONCLUSIONS FROM THE CASE STUDY V. CONCLUSIONS I. INTRODUCTION

    In 2002, a Chilean investor sues the government of Peru under the Chile-Pent Bilateral Investment Agreement when, as part of its programme to protect wetlands, marshes, and other water sources, a municipal government revokes the investor's permit to build a pasta factory. (1) A purportedly American investor launches a claim in 2008 under the Dominican Republic-Central America-United States Free Trade Agreement (CAFTA) when it fails to gain approval of an environmental impact study required for its ongoing mining activities in El Salvador. (2) Then, in 2009, a Swedish company sues Germany under the Energy Charter Treaty when local opposition over potential implications for climate change and pollution of the Elbe River results in delays to and limitations upon its permits to build a coal-fired power plant in Hamburg. (3)

    As these and many other cases demonstrate, environmental regulation is often--and, indeed, is increasingly--at the heart of investment treaty arbitration. These kinds of clashes have become more frequent as the regime sustaining the rights protecting foreign investors, enforced by a process of binding arbitration, continues to grow at what can only be described as at an exponential rate. International investment agreements (IIAs)--of which it has been recently estimated there are approximately 3,000 (4)--continue to swell in number while becoming more comprehensive and grander of scale, with recent agreements encompassing an ever wider range of parties and issue coverage. (5)

    As a result of this expansion, the pressure points created where the investment regime comes into conflict with environmental regulation have also multiplied. These encounters, and the responses to them generated by the investor-state dispute settlement (ISDS) process, have led to public concern, resistance, and, with little recourse for locally affected actors to weigh in on these decision-making processes, frustration. The result is a tense yet unbalanced 'push-pull' dynamic at the sites of these encounters, as myriad actors and interests vie to alternatively overcome or exploit the ISDS process. These constant interactions create a complex pattern of convergences and divergences, where opposing interests (and the norms, actors, and processes that support them) are brought together in often violent and intricate ways, yet struggle to overcome the forces that pull them together. In this article broadly speaking, I delve into this complex milieu so as to shed light upon the intersections and tensions between locally-authored efforts designed to protect the environment (and the actors who would preserve them) on the one hand, and those designed to protect foreign investment (and the actors who would propagate such protection) on the other.

    The unique norm-productive characteristics of the investment regime further complicate this already complex landscape. The privatized decision-making function performed by arbitration tribunals in ISDS--conducted, as it is, by ad hoc panels of private arbitrators--coupled with the investor-focused rights contained within IIAs, dispatches much of the control over the regime's function and the production of its increasingly powerful norms to private actors. In ratifying these IIAs (particularly in such quantities), states seem to have willingly, and even enthusiastically, sponsored this arrangement. This has created something of a gap in the formal and informal infrastructure for the promulgation of the public interest relating to the environment. However, while non-state actors such as non-governmental organizations (NGOs) have attempted to play a role in filling this void, they have found themselves faced with a conundrum: the very regime that owns the processes through which efforts aimed at protecting the environment are compromised displays little interest in either exploring concerns over these impacts or permitting others to raise them.

    The investment regime's turn to ever-greater closure, and the seeming ambivalence on the part of the State to this process, have been paralleled by increasing insistence in efforts to penetrate the regime. One tool used by NGOs to force their way into the regime and highlight the environmental concerns at play in ISDS disputes is the amicus curiae brief. This practice emerges as both necessary and appropriate to the unique circumstances of international investment law in that it allows such actors to "find ways to voice their concerns in the very places where law beyond the state is made." (6) The investment regime is now less and less able to ignore the insistence of NGOs that they have a stake and a place in ISDS. It is increasingly clear that the regime needs to become more open to the involvement of such actors and more sensitive to the environmental concerns that they raise.

    In this article, I explore the nexus between the investment regime, the environment, and NGOs. More specifically, I seek to unpack the relationship between the investment regime and its environmental "others," focusing on the role of NGOs in both shaping (and compelling) these interactions and encouraging greater openness and responsiveness in the regime to environmental issues. I argue that while these collisions are inevitable, they can and ought to be rendered more productive. Then, focusing on the practice of amicus curiae intervention in ISDS proceedings, and drawing insights from a case study, I argue that NGOs have a crucial role in bringing about and shaping collisions between the investment regime and the environment in ways that lead to greater sensitivity to environmental concerns within the regime. This fledgling potential, however, has thus far been limited.

    I proceed in four parts. After providing some introductory context in part I, my first task, in part II, is to situate the tension between the investment regime and the environment against the broader background of fragmentation in international law and to offer theoretical grounding for my hypothesis and subsequent analysis. In so doing, I build upon the literature on regime interactions in international law, developing, in particular, its limited application to the international investment regime. I then move on, in part III, to provide a more concrete sense of how and where collisions between the investment regime and the environment are taking place before discussing how NGOs are uniquely positioned to bring about more productive interactions in ISDS. I also explore the practice of, and extensive literature on, amicus curiae briefs in ISDS. Building on this discussion, in part IV, I consider this potential through a short case study of the amicus curiae submission in the Pac Rim v El Salvador case. I use this analysis to obtain a sense, first, of the tactics employed by NGOs in their amicus curiae submissions to enable more productive interactions between investment and environment and to encourage greater responsiveness in the regime to environmental concerns and, second, of the extent to which tribunals engage with these submissions in a meaningful way. Finally, in part V, I situate the findings from the case study in a broader context, canvassing trends and structures within the regime that might be impacting upon the capacity of NGOs to facilitate these interactions effectively to encourage transformation.

    Ultimately, this article offers deeper insights into both the relationship between environmental protection and international investment law and the underexplored role of NGOs in shaping the international investment regime. It does so by applying insights from the emerging literature on regime interactions in international law while simultaneously filling a lacuna in the extensive literature on amicus curiae briefs in ISDS by examining the role of amici in regime transformation.

  2. CONVERGENCES, COLLISIONS, AND COMPLEXITY: THE INVESTMENT REGIME AND THE ENVIRONMENT IN CONTEXT

    In order to trace trends and changes in the regime, some background must first be explored. In this part, I first discuss some of the key features of ISDS before moving on to provide a historical and theoretical foundation for the subsequent analysis.

    1. The Investment Regime, ISDS, and the Role of Non-State Actors

      A "regime" in international law has been usefully described as comprising "sets of norms, decision-making procedures and organisations coalescing around functional issue-areas and dominated by particular modes of behaviour, assumptions and biases." (7) The international investment regime--which could, admittedly, be construed in a number of ways, potentially encompassing a vast network of norms, institutions, and actors (8)--can be defined by such parameters.

      There is a limited literature that examines international investment law--including its influence and relationship to other arenas--from a "regime" perspective. Saverio Di Benedetto is among those who has seen the utility of this analytical perspective, though describing the investment regime as...

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