International Investment Law and Environmental Justice Movements: The Price of Justice in Latin America

Abstract

Investor-state dispute settlement (ISDS) exists in over 3,000 trade and investment treaties. It allows foreign investors to challenge any government action, in private arbitration, that limits the profitability of their investment be that environment, health, or public interest laws. ISDS has been criticized by scholars for restricting host states’ sovereignty and their ability to regulate in the public interest. While the current literature has yielded important insights, most studies are dominated by a state-centrist perspective and neglect to acknowledge that a large number of disputes, particularly in the Global South, emerge as a result of conflicts between foreign investors and local communities. Building on existing literature, this study examines the Canadian mining industry in Latin America to understand the impact of ISDS claims on the environment from an environmental justice perspective. It argues that the asymmetric corporate structure of the ISDS system has extended into community-investor relations, creating a power imbalance that sets the stage for conflict. It is hypothesized that ISDS protections exacerbate local tensions privileging the rights of investors over those of communities. Host governments are more likely to fulfill obligations of investment treaties due to their ISDS enforcement mechanism, regardless of other obligations under international human rights treaties, such as the ILO Convention 169 on Indigenous Rights. This study draws connections between various injustices, highlighting the corporate preference of ISDS and the asymmetry in legal protections that preclude corporate accountability or justice for affected communities.