How to Impose Human Rights Obligations on Corporations Under Investment Treaties?

4 Yearbook on International Investment Law and Policy, 2011-2012

32 Pages Posted: 4 Mar 2014

See all articles by Patrick Dumberry

Patrick Dumberry

University of Ottawa - Civil Law Section

Gabrielle Dumas-Aubin

University of Ottawa - Faculty of Law

Date Written: March 3, 2014

Abstract

Bilateral investment treaties for the promotion and protection of investments (BITs) are, at least in their present form, asymmetrical. Thus, foreign investors (overwhelmingly corporations, but sometimes individuals) are being accorded substantive rights under these treaties without being subject to any specific obligations. In this context, one question that has been increasingly debated in academia is whether there is a need for a greater degree of balance in BITs between the legitimate interests of investors and host countries. One option envisaged would be for BITs to impose direct human rights (and other related) obligations upon corporations when they invest in the host country. At present, BITs are silent on human rights issues. This affects the legitimacy of the whole investor-state arbitration system, which is perceived by some as inherently biased toward investors’ interests at the expense of the public interest. International human rights law and international investment law are oft en viewed as mutually exclusive bodies of law. The aim of this chapter is, however, not to merely restate the obvious fact that BITs should indeed take into account human rights obligations; other writers have explained very well why this is so. The more complicated question, rarely addressed in doctrine, is how BITs could be drafted (and existing ones be amended) to incorporate “non-investment” obligations. The solutions we offer are meant to be practical. We will examine concretely which non-investment obligations should be included in future BITs, as well as how they should be enforced. We have also taken a pragmatic approach, limiting our drafting suggestions only to those that can reasonably be expected to be achieved in coming years. What matters to us is not so much what academics and non-governmental organizations (NGOs) think should be done in an ideal world, but rather what countries can realistically do in terms of adopting new language in future BITs. Many doctrinal suggestions will therefore be found inadequate because they are impractical, unworkable, and unlikely to ever be endorsed by countries.

This chapter is structured in three parts. Part A briefly examines the question of corporations’ human rights obligations under international law. This is relevant because the lack of obligations for investors under BITs is part of a broader debate about how to best address human rights violations committed by corporations doing business abroad. Part B examines whether corporations have any human rights obligations in the context of BITs. In this part we will also analyze the limited circumstances under which human rights concerns can be raised before an arbitral tribunal set up under BITs (in their present form). Part C of this chapter concretely examines how future BITs should be drafted (and existing ones amended) in order to impose human rights obligations on corporations. One of the many practical issues examined in this part is the identification of the types of obligations that should be imposed upon investors. Another question is how those obligations should be incorporated into BITs. We will also examine the reasons for choosing to incorporate some international instruments and not others. Another important aspect of our proposal is the inclusion of an enforcement mechanism to sanction corporate violations of human rights obligations contained in BITs. We will examine in detail three different options that can be envisaged: the clean hands doctrine, the off setting of damages, and counterclaims.

Keywords: Bilateral investment treaties, human rights, corporations, ICSID

Suggested Citation

Dumberry, Patrick and Dumas-Aubin, Gabrielle, How to Impose Human Rights Obligations on Corporations Under Investment Treaties? (March 3, 2014). 4 Yearbook on International Investment Law and Policy, 2011-2012. Available at SSRN: https://ssrn.com/abstract=2404054

Patrick Dumberry (Contact Author)

University of Ottawa - Civil Law Section ( email )

57 Louis Pasteur Dr
Ottawa
Canada

HOME PAGE: http://www.droitcivil.uottawa.ca/index.php?option=com_contact&task=view&contact_id=148&Itemid=118

Gabrielle Dumas-Aubin

University of Ottawa - Faculty of Law ( email )

57 Louis Pasteur Street
Ottawa, Ontario K1N 6N5
Canada

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