Openness in Investment Dispute
An UNCITRAL panel is ready to hear a US investor's US$800 million claim against Peru over liability for environmental pollution—with the proceedings to be administered by ICSID and open to the public. The claim is the first to be brought under the investor-state disputes mechanism in the US-Peru trade promotion agreement, which entered into force in 2009 and contains far-reaching transparency provisions comparable to those in NAFTA and DR-CAFTA, as well as provisions for the participation of amici curiae. Implementing those provisions, the tribunal has held that its decisions will be published, along with submissions by the parties and transcripts of hearings. The hearings will also be open to the public, subject to "the appropriate logistical arrangements."
Although the proceedings are governed by the UNCITRAL rules, the parties have agreed that ICSID will administer the case and—in an apparent first—maintain a record of procedural developments on its website as it would for a case under the ICSID rules. ICSID has long provided administrative services for investor-state disputes under UNCITRAL rules but has not previously published details of such cases. The procedural order also holds that the arbitration will be seated in Paris, but with hearings to take place in Washington, DC, with the possibility of alternate locations for hearings in Paris or the Americas. The proceedings will be in English and Spanish.
Renco and its affiliates are currently facing personal injury lawsuits in the US courts by around 35 Peruvian children who claim they were exposed to high levels of air contamination in La Oroya. As well as the US court proceedings, residents of La Oroya have brought a complaint against Peru before the Inter-American Commission on Human Rights, claiming the state should have done more to protect their health. The collision of human rights and environmental law with the investment treaty regime have led some observers to draw comparisons between Renco v Peru and the Chevron v Ecuador dispute.
Commenting on the tribunal's procedural order, lead counsel to Peru, White & Case partner and head of Latin American arbitration Jonathan Hamilton, said, "It is time that investment arbitration reflects the transparency, human rights and third-party implications of the intersection between economic and human development, under applicable treaties. That was the aim for establishing this kind of procedure, given that scores of children may be impacted and a clash of legal paradigms is in play. Peru also holds out the possibility of hearings in Peru or another reliable jurisdiction in Latin America."
Renco originally filed its claim in April 2011 but later withdrew it, submitting an amended claim four months later that removed Doe Run Peru as a co-claimant and state entity Activos Mineros as co-respondent. The constitution of the tribunal was also suspended pending developments in the Peruvian bankruptcy proceedings. The case is The Renco Group, Inc. v. Republic of Peru (ICSID Case No. UNCT/13/1).