In Part I of this series, Dr Anil Yilmaz and Assistant Editor Stephanie Triefus discussed how international investment treaties are being used in a way that unduly expands the reach of this controversial legal regime. This part elaborates on why existing safeguards are not sufficient, and how states should proceed with investment treaty reform to combat this issue.
ST: An ISDS case brought against Australia by Phillip Morris was unsuccessful because the tribunal found that Philip Morris’ claim was an abuse of rights – Phillip Morris Asia acquired an Australian subsidiary for the purpose of initiating arbitration under the Australia-Hong Kong BIT. Is this an example of the current system working to prevent claims that states have not consented to? What are the problems with abuse of rights arguments and other challenges to corporate identity that states have used in arbitration to combat this issue?
I’ll start by saying a few things about the Australia case. It was a very well-known case because of the tobacco measures and public health questions around it, and it was going somewhat in parallel with the Philip Morris v Uruguay case. Unlike the Uruguay case, the Australia case didn’t proceed to the merits, because Australia was successful in its objection that Philip Morris was abusing its right to invoke that investment treaty. And that was because in anticipation of the dispute, Philip Morris restructured its investment in Australia to move its holdings to Hong Kong, and that was found to be an abuse of rights in this particular case, and therefore the claim was dismissed. The tribunal didn’t consider Philip Morris genuinely to be a Hong Kong investor to be able to benefit from that investment treaty and that’s a successful outcome in this context. But it was a difficult and hard-fought decision, probably by skilled Australian counsel, and there were very particular circumstances.
It’s very difficult to make a successful abuse of rights argument. First, you have to demonstrate that there was a lack of good faith in the acquisition of the investment, which requires you to go into the intentions of the investor at the time they acquired that corporate entity. The other question is about the timing of when the investor restructured their investment and that seems to be a condition on its own, but it also helps to demonstrate whether the investor was lacking good faith. Timing is important to demonstrate whether a dispute was already reasonably foreseeable at the time of restructuring. In this particular case, the timing of the restructuring was off: the plain packaging policy plans were already announced, and the dispute was foreseeable by Phillip Morris because Australia had already expressed its intention to regulate the tobacco industry through plain packaging. The Tribunal also looked at whether access to the investment treaty was the only or the dominant purpose of the restructuring or whether there were other legitimate reasons. In this particular instance, it was held that Philip Morris’ dominant reason for restructuring was benefitting from that investment treaty. As the timing of the restructuring was off and Philip Morris seemed to lack good faith in that restructuring, the tribunal found there was an abuse of rights. But there have been quite a few other cases where states haven’t been able to make this argument successfully because it’s quite difficult to show that an investor has restructured their investment in a certain way, only or primarily for the purpose of benefiting from investment treaty protection. And indeed, there might be other reasons for it as well, such as tax reasons.
International investment law is ostensibly designed to protect investors from unfair treatment when they invest outside their home jurisdiction. The rationale behind such special protections is to encourage foreign direct investment, which is meant to have a positive impact on host state development and economic growth. However, it is common for corporations to engage in ‘nationality shopping’ to gain access to investor-state dispute settlement in their own jurisdiction, or in circumstances where states have not necessarily consented, under bilateral investment treaties. It is often legal for a company to channel investments through overseas shell corporations, with investment tribunals considering such arrangements to be a legitimate means for accessing protection under investment treaties. In her monograph The Nationality of Corporate Investors under International Investment Law, published in 2020 by Hart Publishing, Dr Anil Yilmaz argues that such expansive interpretations of corporate nationality are not warranted by international law and are in fact unduly expanding the reach of international investment law in ways that seriously impact its operation and the local communities affected by investment projects.
Dr Yilmaz is a Senior Lecturer in the School of Law at the University of Essex and a co-director of the Essex Business and Human Rights Project. Her research bridges the gap between corporate law, international investment law, human rights law, and tort law, examining how these areas can and should interact so as to operationalise human rights standards in the modern business context. She is interested in reimagining business regulation to prevent adverse impacts suffered by communities and workers due to the privileges of capital embedded in the law. She has published works in leading international law journals and in edited collections on parent-subsidiary relationships in the business and human rights context, non-financial reporting, duty of care in supply chain relationships, human rights in investment contracts and the embedded inequalities in the investment treaty regime.
Dr Yilmaz joined Assistant Editor Stephanie Triefus for a conversation about her monograph and why controversial treaty protections should not be extended beyond reciprocity.
It has now been six months since the Brereton Report detailed credible evidence of a series of alleged SASR war crimes in Afghanistan from 2005-2016. According to the Report, 39 Afghans had been wilfully and unlawfully killed by 25 ADF members in 23 incidents, along with two instances of cruel treatment, in circumstances where it “was or should have been plain that the person killed was a non-combatant, or hors-de-combat” (paras 15-16 of Chapter 1.01). The killings and abuse were accompanied by a damning catalogue of slips in military discipline, culture and oversight, involving the “blooding” or initiation of young soldiers, a practice of covering up deliberate killings by placing “throwdowns” on bodies to make them look like legitimate kills, sanitising operational reports to make it appear that the laws of engagement had been complied with, and a marked culture of impunity. There were other issues relating to a lack of command and control of Special Forces in theatre, and insufficient impartial and effective investigatory mechanisms (paras 322-349 of Chapter 1.01, and Chapter 3.03). Brereton recommended the cases be referred to the AFP as there was a realistic prospect of a criminal investigation obtaining sufficient information to charge the perpetrators with the war crime of murder, and/or counselling, procuring or inciting the war crime of murder (Criminal Code (Cth) ss11.2, 11.4 and 268.70), in some cases on the basis of command responsibility (Criminal Code (Cth) s268.115). For the two instances of cruel treatment, there was sufficient evidence for charges under Criminal Code (Cth) s268.72. Overall, 36 matters arising out of 23 incidents by 19 individuals were recommended for potential prosecution (para 21 of Chapter 1.01).
Since the Inquiry, the (related) Ben Roberts-Smith case has dominated media coverage. A series of suppression orders have to date prohibited public release of a range of material in Roberts-Smith’s defamation case against Nine media outlets. However, sensational reports of his alleged attempts to conceal evidence from the AFP and from the Brereton Inquiry in relation to an already ongoing war crimes investigation into his conduct, including alleged storage, altering and transmission of classified Defence Department footage and NATO information, have rightly drawn much attention. Arguments for Nine will reportedly rely on the defence of truth, and link to allegations contained in the Brereton Report. The defamation case is scheduled to commence in the Federal Court on 7 June and will be closely followed.
Although the regular drip of reporting on Roberts-Smith has given Australians a taste of some of the issues that may arise if cases head to court, in general the issue of prosecutions for other alleged SASR war crimes has largely fallen off the public radar. So, six months since the Brereton Report shocked Australia, it is worth examining what the potential for these prosecutions really is.
An examination of the People’s Republic of China draft Personal Information Protection Law published for consultation on 30 April 2021 reveals that its regulation of cross-border data transfer will have important consequences for individuals, businesses and judicial assistance.
To better protect personal information and develop the digital economy, China is taking action to enact its Personal Information Protection Law. On 30 April 2021, the second deliberation draft of the Personal Information Protection Law (hereinafter ‘Proposed Chinese Personal Information Protection Law’) was published by the Standing Committee of the National People’s Congress for public opinion (official version and unofficial English translation available). Regulating cross-border information flow is a highlight of the Proposed Chinese Personal Information Protection Law. Five important issues deserve attention.
The COVID-19 pandemic has been a breakpoint for global health governance, necessitating unprecedented cooperation worldwide. However, the success of global initiatives has been hampered by lack of state interest. This piece investigates why one such initiative, the COVID19 Vaccine Global Access Facility (COVAX), was abandoned by its high-income state supporters, setting out its vision, development and failings. In doing so, this piece seeks to outline issues within the Global North’s approach to multilateral health governance more broadly.
In July 2020, when the development of an effective vaccine against COVID-19 was in sight, assuring timely access to this vaccine became the essential instrument in the Global North’s political toolbox. The UK secured a ‘portfolio’ of vaccines through privately contracting with a number of pharmaceutical manufacturers, while Australian Prime Minister Scott Morrison announced an agreement with AstraZeneca, before this in fact had been finalised. Now, in May 2021, a 40-year-old may be vaccinated tomorrow, by the end of the year, in some years, or has already been vaccinated – depending on their country of residence. Such disparity in access to vaccines is often attributed to the inadequacy of governmental agreements with private companies. However, this analysis presupposes contemporary knowledge of which vaccines indeed proved effective, and glosses over broader issues of vaccine inequity entrenched by global power differentials and healthcare’s commercialisation.
To that end, the COVID-19 Vaccine Global Access Facility (COVAX) appeared a promising solution. Initially floated at the extraordinary G20 meeting in March 2020, and launched by a number of state leaders the following month, COVAX swore to maximise access to vaccines, ensuring populations in all participant countries could soon receive a vaccine. Yet, COVAX remains underfunded, and vaccine nationalism – with states competing to secure doses from manufacturers – stymied its ability to acquire and distribute vaccines. COVAX, set out as a multilateral solution to the COVID-19 pandemic, has been reduced to a vessel for financial contributions to lower-income states; its failure represents a broader failure of collective action, and a continuation of neo-colonialist attitudes towards health governance.
In Georgia v Russia (II), the European Court of Human Rights (‘ECtHR’ or ‘Court’) was asked to decide on numerous alleged breaches of human rights by the Russian Federation (‘Russia’) during a five-day armed conflict between Georgia and Russia. Despite the legal trend favouring the complementarity between International Human Rights Law (‘IHRL’) and International Humanitarian Law (‘IHL’), the Court ultimately held that Russia lacked jurisdiction over extraterritorial breaches of human rights under art 1 of the European Convention on Human Rights (‘ECHR’ or ‘Convention’), signalling a regrettable turnaround from recent case-law.
The ECtHR was handed the perfect opportunity to move past, as rightly underscored by Judge Chanturia, the legally ‘lifeless’ Bankovićdecision and enrich the interplay between IHRL and IHL in Georgia v Russia (II),but ultimately failed to do so.
For legal purposes, the events under scrutiny may be divided in two parts. The first part concerned the armed conflict between Georgia and Russia, with South Ossetians and Abkhaz forces also playing an important role. Hostilities started on the night of 7 to 8 August 2008 and lasted for about five days, resulting in significant losses, including an alarming number of civilian casualties. Secondly, following a ceasefire, Georgia submitted that Russia perpetrated a number of human rights abuses, including the killings and displacement of civilians, the degrading treatment of civilians and prisoners of war, lootings and destruction of civilian objects, which would constitute significant violations of the ECHR. The scope of this written work is to assess the ECtHR’s approach to the first part and assess whether said approach adequately grasped the interplay between IHRL and IHL, as the latter comprises the body of international law applicable to armed conflicts.
The interplay between IHRL and IHL has been subject to much scrutiny in international law. It is internationally recognised that the two bodies of international law are mutually complementary, thus meaning that the protection of certain human rights, in particular, as the International Court of Justice in its Advisory Opinion on the Legality of the Threat or Use of Nuclear Weapons argued at § 25, the ‘right not arbitrarily to be deprived of one’s life’, does not cease during armed conflict (see also Orakhelashvili and the ICTY in Prosecutor v Kunarac et al§ 467). On the other hand, the ‘intricate legal issues of interplay that sometimes arise’ have arguably posed practical challenges in the way the interplay is to be understood, such as matters of derogation, jurisdiction, discretion, accountability, etc. (see also Bethlehem, 180– 82). The opportunity Georgia v Russia (II) presented for furthering the interpretation of applicable human rights norms in situations of armed conflict was therefore invaluable.
On 12 February 2021, Karim Khan QC was elected as the third Prosecutor of the ICC. This piece revisits the long process to that election, focusing on two key issues: the role of the Committee for the Election of the Prosecutor and the need for consensus. The election brought to the fore multiple important issues for states, civil society, academics, lawyers and the Court to consider. Now that the election is over, it is important to take this opportunity to reflect on some of the lessons learned for the future.
On 12 February 2021, Karim Khan QC, a barrister from the United Kingdom, was elected as the third Prosecutor of the ICC. The election process was long and fraught. This election was the first time that states parties did not elect the Prosecutor by consensus; four men were nominated to contest the final ballot. Only one of those nominees, Fergal Gaynor, was among the shortlisted candidates identified by the Committee for the Election of the Prosecutor (CEP). The other three nominees were drawn from the CEP’s longlist – Carlos Castresana Fernández, Francesco Lo Voi and Khan.
The way the election ultimately unfolded was far from what was envisaged when the process to elect a new Prosecutor commenced in 2019. This piece focuses on two key issues that emerged during the election – the role of the CEP and the need for consensus. (Other issues that arose, such as the need for improved vetting of candidates and female underrepresentation among candidates, have been discussed elsewhere.) In reflecting on these issues, this piece hopes to identify some lessons and questions for future prosecutorial elections.
This is the second article in a two-part series examining the Malabo Protocol on the Statute of the African Court of Justice and Human Rights (ACJHR). When it comes into effect, the Malabo Protocol will empower the ACJHR to exercise jurisdiction over international crimes as well as introduce a regulatory scheme for corporate criminal liability. The first part of this series outlined the scope of the Court’s new jurisdiction with respect to international and transboundary offences. This second part explores the new corporate criminal liability provisions in more detail.
Traditionally, only natural persons could be prosecuted for the commission of international crimes in either domestic or international jurisdictions. Corporate criminal liability has been recognised in most domestic jurisdictions, but not under international criminal law. The ACJHR is set to change this with the introduction of Malabo Protocol provisions regarding the international criminal jurisdiction of the court (Article 28A), and a regulatory scheme for corporate criminal liability (Article 46C).
This article analyses emerging international human rights law jurisprudence on climate change displacement and the right to life, notably Ioane Teitiota v New Zealand. This case is the first time the Human Rights Committee has recognised climate change is a threat to the right to life, and thus that states may have non-refoulement obligations to ensure ‘climate change refugees’ are not returned to dangerous environmental conditions. This article will first critically analyse Ioane Teitiota v New Zealand, before discussing how these emerging human rights norms on climate change displacement are expanding state obligations to address climate change.
The South Pacific is at the forefront of climate change, often portrayed as a region drowning in rising seas. The IPCC reports that the mean sea level of the tropical South Pacific is rising faster than the global average, increasing the frequency of extreme weather events, salination of fresh water sources, and predictions of territory loss in the coming decades. These changes heighten food and water insecurity, contribute to higher disaster-related fatalities and damage, and increase migration and the risk of inter-communal violence.This emerging reality has been labelled by the Human Rights Council as a ‘pressing’ human rights threat, notably to the right to life with dignity. Indeed, in Ioane Teitiota v New Zealand, the Human Rights Committee accepted that climate change was a threat to life that would make countries like Kiribati ‘uninhabitable’ in the coming decades. But human rights – deemed inalienable and fundamental – exist in tension with another pillar of international law – state sovereignty.
International investment agreements are coming under increasing fire for the threat that they pose to the global phasing out of fossil fuel energy sources. Foreign investors can challenge state measures addressing climate change via investor-state dispute settlement, which can lead to huge compensation awards that may deter states from taking such action. This piece discusses how investment law can be problematic in regard to climate change measures and calls for states to acknowledge this threat as they move forward with reforms to the international investment law regime.
Recently, it was announced that German energy company RWE is suing the Netherlands for €1.4 billion in response to the country’s decision to phase out coal energy. The case was brought via the investor-state dispute settlement (ISDS) provisions of the Energy Charter Treaty (ECT), a 1994 multilateral treaty for energy industry cooperation across borders. ISDS is a dispute settlement mechanism through which foreign investors can bring claims directly against host states if investors consider that they have been treated unfairly. The ECT has come under fire in recent years for being a threat to state efforts to switch to renewable energies, because it enables fossil fuel companies to sue states that make regulatory changes aimed at reducing carbon emissions. It has been reported that suits under the ECT could cost taxpayers up to €1.3 trillion by 2050 and protect up to 216 Gt of carbon, which exceeds one-third of the global carbon budget that can be emitted if we are to keep global warming below 1.5 degrees by 2100.