Latin American energy projects, such as Chile's Punta Alcalde thermal power project, are facing challenges from courts, which have delayed or stopped their progress.
"The energy sector is a microcosm of key issues of our age in investment and development," says Jonathan C. Hamilton, member of the Energy Advisor board and partner and head of Latin American arbitration at White & Case LLP. "The development of the sector requires significant investment and corresponding environmental protections. Some countries in Latin America have respected the rule of law through reliable and contemporary legal frameworks for investment in the sector, while reasonably seeking to protect people and the environment. That includes both domestic legal frameworks, contractual frameworks and also undertakings under international treaties providing for investment, human, and environmental protections. Legal processes inevitably follow at times, ranging from domestic and foreign courts to international arbitral tribunals (such as at the World Bank) to international human rights proceedings applying a range of legal norms. In this context, there is nothing remarkable about the circumstances of the Chile project.
The dividing line is not between investors and states, but rather between those that respect rules versus those that do not - investors or states. Some investors have chosen to run afoul of applicable rules. Some countries in the region have disrupted the balance of legal protections to the detriment of investment and people alike, sometimes creating chaos in the name of ideology.
The time has long since arrived when thinking about the promotion and protection of investment should be hand-in-hand with protecting human rights and the environment. For too long, abusive investors or abusive governments have sought to capitalize on an artificial dichotomy of investment versus people, or economic development versus social development. The journey beyond that tired dichotomy must be the norm."