Social Rights

Social rights in international investment law falls into two categories of rights:

1. internationally recognized workers’ rights: freedom of association, collective bargaining, prohibition of forced labor and child labor, prohibition of discrimination in employment, including standards relating to working conditions and minimum wages, hours of work, health and safety at work;
2. the rights of people affected by or likely to be affected by investment activities: rights to a healthy environment, to water, to health, to food, to land, cultural rights and rights of indigenous communities.

References to social rights were first incorporated and are still frequently used in the preambles of international investment agreements.¹ Specific provisions on workers’ rights, health and environment are now included in the body of many treaties.²

A number of bilateral and multilateral investment treaties refer to other norms such as international treaties on the protection of human rights,³ those that have been adopted by the ILO,⁴ national legislation⁵ or international standards on corporate social responsibility.⁶

Sometimes, the protection of social rights is indirectly targeted via references to public health,⁷ the environment⁸ and public interest.⁹

Admittedly, provisions on social rights are more frequent in the preambles of investment treaties and are often framed in non-binding language in the body of the treaty. When they are so worded, they do not create obligations per se. But they can be seen as means of interpreting other obligations.¹⁰

However, some recent model treaties,¹¹ treaties¹² and national investment laws¹³ impose express obligations on investors related to social rights. 

Often expressly excluded from investor-State arbitration,¹⁴ provisions relating to social rights sometimes provide for State parties to cooperate in monitoring compliance.¹⁵ They are sometimes subject to a consultation mechanism between States on an ad hoc or institutional basis. Some investment agreements establish panels of experts whose conclusions are binding¹⁶ or non-binding.¹⁷

In the context of the Inter-State dispute settlement mechanism, labor organizations may trigger the implementation of the relevant social rights provisions¹⁸ by exposing the violations of these obligations by a State.¹⁹

In the context of investor-State arbitration, social rights issues have been invoked by the respondent State as defense and/or as counterclaims based on the investor’s violation of obligations concerning the respect of social rights. Social rights have been invoked in arbitration cases mainly related to water and sanitation concessions,²⁰ mining activities²¹ and tobacco packaging.²² In some cases in which the protection of social rights was at issue, the respondent State invoked its human rights obligations in general.²³ See further Human rights in investment claims and Environmental issues in ISDS, Section VI.