Human rights can boast universal acceptance and a well-developed system of specialized courts and tribunals. Although there does not seem to be objections to human rights being relevant to all spheres of life and deserving of consideration, there is criticism regarding the effectiveness of the human rights legal system.1 The system of investment protection has, in recent years, become increasingly intertwined with other areas of international law – mostly with human rights and environmental law.
Clauses providing for a respect of human rights were progressively introduced in the new generation of investment treaties. Some of these additions are:
Many international human rights instruments are referred to either by arbitral tribunals or by the parties, such as:
For an analysis on their application, see section III below and Human Right Counterclaims.
Investment contracts are not unfamiliar with human rights considerations.15 On one hand, parties to contracts can decide to exempt health, safety and environment regulations from the application of stabilisation clauses to allow the host State to regulate in favor of human rights.16 On the other hand, parties can include clauses explicitly providing for human rights obligations towards investors.17 More specifically, some clauses include obligations relating to forced labor,18 as well as to the safety and health of employees.19
Elaborated provisions on corporate social responsibility are contained today in soft law instruments. These instruments were recently considered by arbitral tribunals in ISDS disputes suggesting that investors are no longer “immune from becoming subjects of international law”.20 Some of these instruments were mentioned in Urbaser v. Argentina21 and Tulip Real Estate v. Turkey:22
A new set of arbitration rules were developed to provide for a procedure suitable for cases with complex chains of distribution, in which different companies from different jurisdictions can be involved. The Hague Rules on Business and Human Rights Arbitration can be used as the applicable law to an arbitration under certain conditions.
Where the BIT is sufficiently broad, some tribunals have allowed investors to advance claims of violations of human rights based on general international law within the scope of the dispute before the arbitral tribunal.25 On the other hand, arbitral tribunals rejected human rights arguments,26 or interpretations based on human rights instruments,27 notably where the applicable BIT does not allow for such expansion of the scope of the treaty, tribunals refused to consider these claims within their jurisdiction.28
As standards of protection from international investment agreements (IIAs) provide more specific rules than those of protection of right to property, to life, to health and physical security, investors are more likely to refer to standards of protection provided in investment treaties.28 Some tribunals even refused to recognize incompatibilities between human rights and BIT obligations.29 (See also Full Protection and Security, Minimum Standard of Treatment, Expropriation and Fair and Equitable Treatment).
Nonetheless, claimants have relied on the standards of treatment contained in the BIT while incorporating references to human rights in their allegations and tribunals took them into consideration to properly assess and interpret BIT provisions, such as for the nationality of investor,29 expropriation30 and fair and equitable treatment.31 Others have been more reluctant.32
There are still several unresolved concerns presented by the inclusion of human rights issues into investment arbitration. Human rights provisions are still absent in most applicable BITs and MITs and there are still few disparities between investment arbitration and human rights jurisprudence in terms of the application of a human rights concepts or in awarding damages.44
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