Originally from World Arbitration and Mediation Review (WAMR)

PREVIEW

ABSTRACT

Investor-state dispute settlement (“ISDS”) is the mechanism for resolving conflicts involving private companies and states.  The legal framework governing the parties is regulated by bilateral treaties between the country of the investor company and the state where the investment will take place. However, during the execution of the investment project, construction contract, or concession, the parties may incur breaches, some minor and others material, leading to a violation of the bilateral contract and the potential for a compensation claim before the chosen arbitration forum, such as the International Centre for Settlement of Investment Disputes (“ICSID”). In conflicts involving environmental damage and public health impacts by the investor company, the situation becomes more complex as it introduces new voices into the process, such as affected native communities, labor leaders, government authorities, environmental groups, among others.  This article explains the concept of cultural expertise, also known as anthropological expertise, and its current use during the evidence stage in criminal judicial courts in South America, as well as how it could be incorporated into investor-state dispute settlements concerning mining activities, the environmental impact, and public health.

I.INTRODUCTION

The law is never black and white. Reality reveals grey areas that compel us to make difficult decisions to safeguard an interest.  However, just like the law, this safeguarded interest is not absolute and is relative depending on the beneficiary.  This is the case with mining conflicts involving environmental damage.  When deciding government officials must balance a series of factors. These include the economic interests that mining activity brings to the country’s gross domestic product (“GDP”), and the economic benefits sought by the investing company, versus the integrity of the environment, the health impact on local populations, and the economic consequences on their lives.

An improper or illegal action by the government may lead to the violation of a bilateral treaty.  As mentioned above, this is the legal framework within which both parties should interact, and in the event of a potential conflict, determine the way it should be addressed.  This is where the involvement of the International Centre for Settlement of Investment Disputes (“ICSID”) comes into play.

However, factors such as idiosyncrasies, customs, and the culture of the mining zone’s local area are not taken into account by the arbitral tribunal when analyzing the substance of the dispute.  This is because the cultural and normative conflicts that arise in a multicultural nation, such as those involving indigenous communities or small local towns in Latin American countries,

are not necessarily explainable or understandable through empirical experimental approaches or from the standpoint of “Western common sense.”  The diverse nationalities and backgrounds of the arbitrators make it inherently challenging to achieve a comprehensive and fully informed perspective on the origins of the conflict.