elpais.com
Investment Treaty Allows Lawsuit Against Chile Over COVID-19 Measures
Two French companies sued Chile for $2 billion due to COVID-19 sanitary measures reducing their airport concession profits by 90%, highlighting how investment treaties prioritize investor interests over public health and enabling lawsuits against states for various public policies.
- What specific legal mechanisms and interpretations allow investors to sue states for policies that reduce their profits, and how are these mechanisms used strategically?
- The case highlights how investment treaties, initially designed to protect investors from state abuse, are now used to challenge public policies. The broad interpretation of treaty clauses allows companies to sue governments for policies like tax increases or health measures, chilling policy innovation and potentially prioritizing investor profits over public well-being. This has resulted in at least seven lawsuits against Chile seeking $2 billion in compensation.
- How do investment treaties impact the ability of Latin American governments to implement public health measures, and what are the immediate financial consequences for these states?
- In 2020, two French companies, Groupe ADP and Vinci Airports, sued the Chilean government for implementing COVID-19 sanitary measures that reduced their airport concession profits by 90%. This lawsuit leveraged a 1992 investment treaty allowing investors to sue states for policies impacting their profits. The Chilean government, facing a second wave of the pandemic and 18,000 deaths, prioritized public health over immediate payouts.
- How does the rise of third-party litigation funding affect the balance of power in investor-state disputes, and what long-term consequences does this have for the implementation of public policy in Latin America?
- The rise of third-party litigation funding exacerbates the problem, providing investors with virtually unlimited resources to pursue lawsuits against states. This lack of regulatory oversight in Chile, coupled with the high costs of legal defense (averaging $5 million per case), creates a significant impediment to implementing public policies that may negatively affect investor profits. The Chilean government's efforts to create a specialized office to handle these cases illustrate the growing systemic issue.
Cognitive Concepts
Framing Bias
The narrative strongly frames the situation as a David versus Goliath struggle, pitting powerful multinational corporations against a vulnerable Chilean government. Headlines and the opening paragraphs emphasize the disadvantage faced by Chile, creating a sense of injustice. The repeated use of "plata o plomo" (silver or lead) further reinforces this framing.
Language Bias
The article uses charged language such as "absurdo" (absurd), "ahogar a los Estados" (to drown the States), and repeatedly emphasizes the high costs and negative consequences for Chile. While factually accurate, this word choice contributes to a negative and biased tone against the investment treaties and the corporations. More neutral alternatives could include "unusual", "challenge", and focusing on the specific financial implications without value-laden adjectives.
Bias by Omission
The article focuses heavily on the lawsuits against the Chilean government, but omits discussion of the potential economic benefits of the airport concessions or other perspectives on the impact of the pandemic restrictions on the Chilean economy. It also doesn't mention the specifics of the 1992 investment treaty with France beyond its clauses allowing investor lawsuits, neglecting any positive impacts or details of its negotiation.
False Dichotomy
The article presents a false dichotomy between prioritizing investor wellbeing and public health. The implication is that these are mutually exclusive, ignoring the possibility of finding a balance or alternative solutions that accommodate both.
Sustainable Development Goals
The article highlights how investor-state lawsuits prevent the implementation of public policies aimed at improving the lives of citizens. These lawsuits, costing millions in legal fees and settlements, divert public funds that could be used for poverty reduction initiatives. The inability to implement policies like increased taxation or improved labor regulations hinders efforts to alleviate poverty and reduce inequality.