Rules for transparency of international arbitrations are included in a recently leaked draft of a key section of the controversial, still-being-negotiated Trans-Pacific Partnership.
The section on transparency (begins on Page 27) would set standards for the conduct of the arbitrations to resolve complaints by investors against signatory governments.
The transparency rules are good, but not ideal, according to one expert consulted by FreedomInfo.org.
Negotiations among 12 nations, including the United States and Pacific-rim countries, are well-advanced, but opposition in the US appears to be rising. The talks are conducted in secret, another point of much contention, but some drafts have leaked.
The latest leaked document, dated Jan. 20, 2015, was published in WikiLeaks. It is the controversial “Investment Chapter,” which establishes when corporations can sue treaty signatories. (See New York Times report.)
Such “investor-stated” actions could be brought before three-person arbitration organized two arbitration bodies, affiliated with the World Bank and the United Nations.
Both bodies have been criticized for their lack of transparency. See FreedomInfo.org 2014 reports on the United Nations Commission for International Trade Law (UNCITRAL) and the World Bank’s arbitration facility, the International Centre for Settlement of Investment Disputes (ICSID).
The leaked draft chapter includes a section on transparency of arbitrations. It would mandate disclosure of all filings, beginning with “notice of intent.” Minutes or transcripts of hearings would be disclosed, and the hearings themselves would be “open to the public.”
“It goes farther than older models of treaties in requiring transparency of investor-state arbitrations, but it still gives the parties to the dispute the opportunity to restrict information that other otherwise be disclosed under national law,” according to the expert FreedomInfo.org interviewed.
The proposed transparency provisions would mandatory irrespective of what whether the matter is brought under UNCITRAL or ICSID rules, eliminating transparency as a forum-shopping factor.
Some “protected information” could be kept confidential, the draft agreement says in a “Paragraph 3.” Also exempt, the provision says, is information described in an unleaked “Exceptions Chapter” that includes a “Disclosure of Information Article.”
A footnote states:
For greater certainty, when a respondent chooses to disclose the tribunal information that may be withheld under Article CCC.2 (Exceptions Chapter; Security Exceptions Article) or Article CCC.6 (Exceptions Chapter; Disclosure of Information Article), the respondent may still withhold that information from disclosure to the public.
The arbitration panel is empowered to decide in disputes over whether to keep information confidential, but the scope of its jurisdiction is seemingly limited by Paragraph 3 and Paragraph 5.
The draft would let states resist disclosing information to the public even if such disclosure would normally be required or permitted under domestic law. “This may be particularly problematic when the disputing parties and/or tribunal take a broader interpretation of what is “protected information” than domestic agencies or courts do,” commented the expert.
Paragraph 5 says:
Nothing in this Section requires a respondent to withhold from the public information required to be disclosed by its laws. The respondent should endeavor to apply such laws in a manner sensitive to protecting from disclosure information that has been designated as protected information.
Amicus Filings Allowed
Third parties would be allowed to make submissions to the arbitration panel, as they mostly are now, according to another provision, in Article II:22, “Conduct of the Arbitration.”
It says in part:
After consultation with the disputing parties, the tribunal may accept and consider written amicus curiae submissions regarding a matter of fact or law within the scope of the dispute that may assist the tribunal in evaluating the submissions and arguments of the disputing parties from a person or entity that is not a disputing party that has a significant interest in the arbitral proceedings.
Filed under: IFTI Watch