Investment Treaties is a new face of Colonialism Reading Notes The Postcoloniality of International Law, Sudhya Pabuja

International Law is simply a cloak of legality thrown over the subjugation of colonized peoples by the imperial powers in a distortion of international laws true spirit [Christopher Weeramantry, Universalising Int Law 4(2004)] International law must be culturally sensitive to grab the spirit of international law which lies in the universality and soverign equality. [John Strawson, Book Review, 5 MELB U L Rev. 513 (2004) (reviewing the Universalising Int Law)] [What is exactly the cultural sensitive issues the writer refers to?] International law in the past was developed only for interests of empires. The writer claims that the present system of international law, to certain extent, supports the practice of neo-colonialism. [P 459] What is coloniality conditions? If there is a due process of making certain law in international arena, is it still considered as coloniality or just the asymmetry of bargaining power between two or more nations.

Interesting article recommended on the ambivalences of international law in relation to Empire and its legacies [P460]. Nathaniel Bermann, In the Wake of Empire, 14 AM UNI INTL REV 1521 (1999)

Definition of postcolonial reflects on: 1) break on the continuity of the empire domination in the past 2) Ability of the international law to stands for liberation, instead of imperial interests. *Page 460+ *Peter Fitzpatrick, God Would be Needed American Empire and the Rule of (International) Law,], [the same author, Latin Roots: Imperialism and the Formation of Modern Law, CLAVE: Counterdisciplinary Notes on Race, Nation and the State (2005)] Notion on that European or Western identity is constituted in opposition to an alterity that it has itself constructed. What is the Other? Europeans define the Other by negative definition, i.e., defining characteristics that the West lacks or rejects. In the course of defining, the Others are excluded from the very meaning of being.

However, by this way of definition, the West claimed that what they believe is universalthe values that the West wishes the rest of the world should be. It leaves the Others with the dilemma by being excluded from being and being demanded to include themselves to be being. [P 461] The above view creates paradox whereby the Wests valueswhich is self-constructed by the West by way of excluding the Others--may demand the liberalisation of the Others and at the same time imperialising them. [P 461] After decolonizing period, many scholars have explained that its time for universal equality. All those who were excluded have now been participating in the making of international law. [P 462] [Antony Anghie, Imperialism, Sovereignty, and the Making of International Law 197 (2004)] Postcoloniality Conditions The writer argues that during the colonialism era, the international law had been universally applicable to all nations. However, it is NOT universality of international law. It is just the shift to the different determinative system. It is thus can be seen as illustration of postcoloniality of international law. John Strawson argues that the Wesphalia treaty 1648 has granted the monopoly of legal personality in international law to the European powers, rather than having established the sovereign equality. [it may possibly be because a state in order to be a subject of international, it needs consent from other states. See Taiwan-Thai international relationship [P 462]. The circular inauguration of law and subject and the capture of legal personality by the nation state are accompanied by a universal claim of nation made in both spatial and temporal terms. The modern nation covers the earth. The terms of international comity, then society, and now community, effect a closure around nation *and+ confirm its universal reach becayse those terms are secured in the pervasion of nation leaving no space that is not national space *P462+ In international legal terms, the only way to decolonize was through self-determination as a nation state. Historicism plays a vital role in granting or recognizing a nation state (which wants to claim universality). The concept is that whether to define its coming into being, one must consider unity and historical development thereof. [464]

(self determination) ( )

 decolonizing homogenous empty time ()

Imperialism, Eurocentrism and International Investment Law: Whereto From her for Asia? Kate Miles, Paper Submission for the Second Biennial General Conference of the Asian Society of International Law , International Law in a Multi-Polar and Multi-Civilizational World: Asian Perspectives, Chaleenges and Contributions Miles, K, Imperialism, Eurocentrism and International Investment Law: Whereto from Here for Asia?, presented at International Law in a Multi-Polar and Multi-Civilizational World: Asian Perspectives, Challenges and Contributions, the Second Biennial General Conference of the Asian Society of International Law, Tokyo, Japan, August 2009. Miles started with historical background that the international inv law was and still remain to certain extent a tool for imperialism. She said that the emergence of rules for foreign property protection was firstly created for the interests settled among European nations [FN 2]. However, the fundamental change of the law characters was witnessed when the law was applied to other nations outside Europe. Foreign investment and trade protection rules became part of the array of tools used ti further the political and commercial aspirations of European states, and, in so doing, became embedded within the processes of colonialism and oppressive protection of commercial interests *FN3+ The international investment law is the product of colonial encounter *the phrase was coined by Anghie. He conceptualized that the regime of international law had been shaped by the the colonizers when solving legal issues in their colonies.] The key argument of Miles is that the international investment law regime is a mechanism that protected only the interests of capital-exporting states *fn5+. Therefore, the host states are excluded from appropriate protection. Even now, the host state cannot claim against investors investing in its country for any damages suffered from activities of the investors. [p 2]

 19 18 [fn12] BIT
1 host state

Shell Oil Operation in Nigeria, Freeport and Rio Tinto in Indonesia,

Chevron Texaco Corp in Ecuador, Broken Hill Proprietary Co (BHP) in Ok Tedoi, Papua New Guinea, and Union Carbide in Bhopal, India. ( ) 2. pillar State-Investor Arbitration ICSID Convention Washington Convention ( New York Convention) the tribunal

BIT BIT [fn23] host state ( Albert H Cho and

Navroz K Dubash, Will Investment Rules Shrink Policy Space for Sustainable Development?) 3. commercial diplomacy BIT

4. BIT decolonization

New International Economic Order

 BIT Benton assertions of power and

responses to power http://books.google.co.uk/books?id=F50Bc68XlIC&pg=PA307&lpg=PA307&dq=standing+guard+charles+lipson&source=bl&ots=IYn3MW9APe&sig=E QlJC1UO3AwSjFRbtqn8OfpeQiQ&hl=en&sa=X&ei=u9oFT5qvKJSQ8gP1wHzBQ&sqi=2&ved=0CCkQ6AEwAA#v=onepage&q=standing%20guard%20charles%20lipson&f=false

BIT
[ Gus Van Harten, Investment Treaty Arbitration and Public Law (2007) 40-41, Carlos G Garcia, All the Other Dirty Little Secrets: Investment Treaties, Latin America, and the Necessary Evil of InvestState Arbitration 2004 16 Florida Journal of Int Law 301, 316+

1980 BITs economic liberalism Washington Consensus

IMF


Gus Van Harten ... international investment law

investment treaty (reciprocal obligations) treaty one-sided

state-investor arbitration national treatment or minimum standard [CMS

Argentina]

ICSID Convention self-contained commercial arbitraion

arbitration

 unfair treatment public welfare

Schreuer Dolzer universalist

( !)

Van Harten ( Chorzow case ICJ Van Harten ICJ treaty ) mandate
A fundamental purpose of investment treaties, as indicated by their titles, is to protect and promote investment, As of 2008, the total number of BITs in existence was 2,608, and 179 countries were parties to at least one of them United Nations Conference on Trade and Development (UNCTAD), World Investment Report 2008 (2008) 14. 41 percent of all BITs concluded as of 2008 were between a developing and a developed country, while only 9 percent were between developed countries ibid 16, Salacuse addressed that the developing countries after decolonization period contended to the ideal of universality of international law, particularly of foreign investment protection law because the international legal regime itself was created and adopted among the western countriesi.e. the former colonizers. The Law of Investment Treaties, Jeswald W. Salacuse, (OUP 2010),P 68, see also T Walde, Requiem for the New International Economic Order (1998) 761 Salacuse explained that because of challenges being made by many newly decolonized countries after WWII was part of the reason why developed states needed to enter into BITs. The Law of Investment Treaties, Jeswald W. Salacuse, (OUP 2010) P 68-77

Definition of Neo-colonialism The result of neo-colonialism is that foreign capital is used for the exploitation rather than for the development of the less developed parts of the world. Investment under neo-colonialism increases rather than decreases the gap between the rich and the poor countries of the world. The struggle against neo-colonialism is not aimed at excluding the capital of the developed world from operating

in less developed countries. It is aimed at preventing the financial power of the developed countries being used in such a way as to impoverish the less developed. Kwame Nkrumah. Neo-Colonialism, The Last Stage of Imperialism. First Published: Thomas Nelson & Sons, Ltd., London (1965). Published in the USA by International Publishers Co., Inc., (1966); Neocolonialism is the state where the economic (and) social relations of dependency and control ensure both captive labour as well as markets for European industry as well as goods.

Miles, K, A Political Juncture for International Investment Law: Breaking from the Past or Reproducing Economic Imperialism? presented at The Politics of International Economic Law: The Next Four Years, American Society of International Law, International Economic Law Interest Group Biennial Conference, Washington DC, United States, November 2008.

Evolution in Investment Treaty Law and Arbitration, Edited by: Chester Brown, University of Sydney Edited by: Kate Miles, University of Sydney ISBN:9781107014688 Publication date:November 2011, Cambridge University Press. Evolution or revolution in international investment arbitration? The descent into normlessness pp. 631-657,By M. Sornarajah Sornarajah explained that the international investment legal regime is rapidly moving toward the state of normlessness. There are obvious concerns from states in many manners against the expansionism of treaty interpretation by arbitral tribunals to, in affected states view, have created wide responsibilities more than original intentions of the states when entering into a treaty. [Page 632] Free-market fundamentalism and economic neo-liberalism are widely upheld by the arbitral tribunals in the 90s until 2008 *He borrowed the term free fall from Joseph Stiglitz.+ *P 633+. Because of this ideological motivation of the era, the arbitrators have expanded the law to the point where it was not originally intended. Sornarajah shares the same view of Van Harten, that the arbitrators profits from having the neoliberalism ideology. [633] Normlessness is the concept that has an affinity to the theory of anomie put forward by the sociologist, Robert Merton. Merton explained crime on the basis of the existence of groups which did not accept the rules stated by the community but accepted their own value and norms. When large-scale dissent takes place a situation of anomie results giving rise to crimes as behaviour which is in accordance with one set of norms, but which is criminal according to the other set of norms. [633]. Thsese two sets of norms have its own legality and credible explanation. The result is chaotic schism.

Pacta sun is used in the discourse to straighten the colonolism. The problem lies at the fact the 3rd world accepts this, particularly in this era of neo-liberalism which is characterized by intense competition among third Wordl states for foreign investment and an intensifying inequality of bargaining power, whether with respect to private actors or international financial institutions, the whole discourse of contracts conceals the enormous inqualities in power between parties. The device of contract and consent played a crucial role in sustaining this set of ideas and creating and enfocing limits on sovereignty through, for example, stabilization clauses. Now unequak treaties are created not because of force, but because of economic powerlessness, a feature prominent indeed, inescapablein the international system, and yet, incapable of remedy, at least through international law. 240-241 Anghie Anghie further argues that international continuously attempts to efface its complicity with colonialism. Contractual approaches to international law futher serve to obscure the imperial past. The whole framework of contracts is curcial to the attempt to establish that international law is neutral, that the arbitrators are doing no more than enforcing the agreemetns that had been freely entered into by soverign states on the one hand and MNCs on the other. The point, however, is that it is international law that legitimized, through doctrines of conquest and by upholding unequal treaties, the imbalances and inqualities in social and political power that are inevitably reflected in international contracts which are then characterized as expressing the free will of the parties. The old international law of conquest creates the inequalities that the new international law of contracts perpetuates, legalise and substantiates when it neutrally enforces the agreements, however one sided, entered into by sovereign Third World states. It is in this way that the old international law of imperialism, based on conquest, is connected with the new international law of imperialism, based on contract. 241 Anghie Anghie argues that "...it is precisely when the Third World threatens the exitsing system that that system reveals most clearly the mechanisms of control on which it relies. ...moment when the Third World enters the international realm to be bound. This is the moment when the non-European world enters the realm of international law as a 'colonial subject', a phrase which, as opposed to an alternative term, 'colonial object', suggests the recognition of the native for the sole purpose of effecting his subordination and dispossesion in a manner which appears legally coherent.

China, India, and the international economic order, edited by Muthucumaraswamy Sornarajah and Jiangyu Wang, Cambridge ; New York : Cambridge University Press, 2010. The same logic is evident in arbitral decisions. Lord Asquith dismissed Abu Dhabi as having no law in the 1950s. By the time of the AMINOIL arbitration in 1982, the arbitrators insist by contrast that another Middle Eastern state, Kuwait, possess a very sophisticated legal system. They assert that Kuwait law is a highly evolved system, even whole gracefully making the transition to international law on the basis that established public international law is necessarily a part of the law of Kuwait and, further, that general principles of international law is are part of public international law. The international law that proclaims general principles that protect acquired rights is thus transformed into the law of Kuwait itself. It is only at this point, when these self-negating, colonizing principles of

acquired rights have become an integral part of its foundation, that the Kuwait legal system is recognized as having any validity. The Middle Eastern state is bound by an international law that nullifies its sovereignty." In Methanex case, it was recognized that an interference to regulate investment in the interests of the health and safety of the community would be regarded as non-compensatable regulatory expropriation. However, this is because USA is the defendant. It is unlikely that Methanex case would be regaded as creating an exception which favours the vew that takings which can be justified on environmental grounds are not compensatable. A certain uniform view had developed, at least, before, Methanex case, that property protection must be given priority over the interests of environmental protection. The articulation of this view is to be found in the award in Compania del Deserello Santa Elena v Costa Rica. The host state had sought to rescind a project as it was thought that the building of a resort in an area that provided the habitat of the black puma, a threatened species, would harm the continued survival of that species. The arbitrators ruled that this was not a legitimate justification for the recession of the foreign investment. They observed: Expropriatory environment measuresno matter how laudable and beneficial to society on the wholeare, in this respect, similar to any other expropriatory measures that a state may take in order to implement its policies, whether domestic or international, a states obligations to pay compensation remains.

It is interesting to note that the threatened species, the black puma, was protected by the Convention on Engangered Species to which Costa Rica was a party. This disregarding of international obligations in preference to investment protection found in a bilateral or regional investment treaty has been a feature of investment arbitration. Thus in SD Myers v Canada, a NAFTA tribunal discarded the fact that Canada was in compliance with the Basle Convention on the Export of Hazardous Waste in contemplating the refusal to permit an American company engaged in disposal of toxic wastes to remove toxic waste from Toronto for processing in its factory in Ohio. Likewise, in Metalclad v Mexico, the protection of rare cactus was held not to be a sufficient ground for violating investment agreement. Same principle applies to the case between Tecmed V Mexico.

The system is based itself on expansive power of arbitrators, empowering arbitrators to examine and make judgment on regulations made by host states government for the purpose of public welfare, thus limiting host states of public policy space. [Van Harten].

When characterising international law, two pillars of thoughts will be used. One would explain that international law was just corrupted by imperialist states and it is important to reform international law to create the system of law which upholds the sovereign equality and universality. Another end is the international law was created and has been the tool for empires all along. Powerful nations

are always capable to use the system to advance its colonialist goal. It may be the best way to use the postcolonialist view to explain the paradoxical characters of international law that the international law has character of supporting imperialism and at the same time anti-imperialism. Sundhya Pahuja, The Postcoloniality of International Law, 46 Harv. Intl L.J.459 (2005) 459 460.