For Immediate Release: Contact: Heesob Nam (hurips@gmail.com)
August 1, 2019
Trade Minister of South Korea should not undermine the ISDS reform objectives pursued by the Prime Minister
On
July 12, 2019, the Korean Prime Minister officially stated at the
National Assembly that he “agreed to abolish investor-state dispute
settlement (ISDS)”.[1] This remark is in line with the recommendation of UN human rights experts to UNCITRAL member states,[2] which
calls for a structural and systematic reform of ISDS. The underlying
idea of both the Korean Prime Minister and the UN human rights experts
is that investors should not be privileged to ignore domestic laws,
institutions and culture or to undermine the ability to protect the
environment, human rights and labours’ rights of the investment hosting
countries. The best way to implement such ideas is to abolish ISDS.
But
it is shocking to see that the Korean negotiators of RCEP, especially
the Trade Minister, Ms. Yoo, Myung-hee, still maintains the position to
support ISDS at the 27th round of Regional Comprehensive Economic
Partnership (RCEP) taking place in China this week. Unlike the
old-fashioned perception of the Korean negotiators, ISDS is not a matter
of win or lose game between Korean investors and developing countries.
It’s about the regulatory space of states in the public interest versus
the private interest of investors. As a civil servant, the Trade
Minister should take seriously into account public interests and
national obligations under international human rights instruments.
ISDS
cases against South Korea also show that the Korean negotiators’
position fails to understand the nature of ISDS. The latest ISDS case
against South Korea was brought by Malaysian investor, Berjaya Land
Berhad.[3] Further, the first ISDS dispute that South Korea lost was raised by a Singaporean entity, D&A, which was invested by Iranian company, Dayyani group.[4] These cases illustrate that the nationality of the investor and degree of development of hosting countries
has nothing to do with the possibility of ISDS disputes. Moreover,
various investors ranging from the US-based hedge fund such as Elliott
Management, Lone Star Funds and Mason Capital Management, to individual
investors, Korean-American, Korean-Canadian, US real estate development
company, and European manufacturers have relied upon ISDS to
progressively seek profits by attacking South Korea. The amount of
monetary compensation foreign investors have sought against South Korea
now exceeds USD 11.7 billion in just seven years.
We
call for the Korean Trade Minister to stop supporting ISDS in the RCEP
negotiation. We also call for the Prime Minister to discipline the Trade
Minister to be consistent with the Prime Minister’s position, and to
coordinate relevant administrative branches such as the Ministry of
Justice and the Ministry of Foreign Affairs to develop policy options to
remove ISDS from international investment agreements involving South
Korea. These options should be developed in a transparent way and with a
full consultation with civil society. We also urge the RCEP negotiators
to develop more fundamental solutions to solve the problems of ISDS,
including removal of ISDS from RCEP.
[1] https://occupyfta.blogspot.com/2019/07/korean-prime-minister-agreed-to-abolish.html
[2] UN Special Procedures Mandate Holders' Letter to UNCITRAL WG III on ISDS Reform, 7 March 2019, https://uncitral.un.org/sites/uncitral.un.org/files/public_-_ol_arm_07.03.19_1.2019_0.pdf, https://www.ohchr.org/Documents/Issues/Development/IEDebt/OL_ARM_07.03.19_1.2019.pdf.
[3] https://occupyfta.blogspot.com/2019/07/10th-isds-case-against-south-korea.html
[4] http://www.theinvestor.co.kr/view.php?ud=20180704000746
###
- People’s Solidarity for Participatory Democracy
- MINBYUN-Lawyers for a Democratic Society, International Trade Committee
- Knowledge Commune
- Trade & Democracy Institute
