A series of further judgements against developing countries has put the International Centre for the Settlement of Investment Disputes (ICSID) increasingly in the spotlight. ICSID, an arm of the World Bank Group, is an arbitration forum between governments and foreign investors to settle investment disputes (see Bulletin Dec 2013).
In April, a letter from 303 civil society organisations urged World Bank president Jim Yong Kim to “review the role of the International Centre for the Settlement of Investment Disputes (ICSID)” because mining corporation “Pacific Rim is using ICSID to subvert a democratic national debate over mining and environmental health in El Salvador.” The company is asking for $300 million, 2 per cent of El Salvador’s GDP.
In addition, ICSID recently accepted a request for arbitration against Venezuela by mining giant Anglo American for $600 million in relation to breaching the UK-Venezuela Bilateral Investment Treaty, and against Uruguay by tobacco company Philip Morris for $25 million in relation to cigarette packaging regulations, igniting debates about whether disputes should be handled by ICSID or national courts.
George Kahale, an international lawyer, criticised ICSID in a keynote speech at the eighth annual juris investment treaty arbitration conference held in Washington in May. He said ICSID is “seriously flawed” with a “perceived bias against states,” that calls into question “the legitimacy of the entire system”.