In a mixed decision for international investors, the International Centre for Settlement of Investment Disputes (ICSID) recently published a tribunal’s award finding that the Republic of Colombia breached its obligations under the Canada-Colombia Free Trade Agreement when it blocked Eco Oro Minerals Corporation’s mining project in an effort to protect a high-altitude wetland known as the Santurbán Páramo but held that Colombia did not indirectly expropriate Eco Oro’s concession contract with the government pursuant to which Eco Oro’s investment was made because its actions were a legitimate exercise of Colombia’s right as sovereign state to protect its environment. ICSID arbitration, as its name implies, exclusively deals with international commercial disputes, where “investors” (as defined by applicable treaties and include both companies and individuals) submit claims under international treaties against foreign governments. The Eco Oro decision and its underlying analysis are not unique to investor-state arbitration and illustrate how domestic policy concerns, such as the protection of the environment, may result in States acting against the interests of foreign commercial investment.
