[New blog post] Investment treaties: protecting transition investments, but are they just?

In a new post on the blog of the Business and Human Rights Journal, former Asser intern Rafaella Monesi and Asser researcher Stephanie Triefus argue that international investment law is more a hinderance than a help to the clean energy transition. Taking the example of the closure of the Cobre Panamá copper mine, the researchers show that investment arbitration is being used to protect foreign investment projects that are detrimental to the environment and associated with human rights abuses. 

The authors challenge the narrative that investment arbitration plays a positive role in the transition to renewable energy. While proponents argue that investment treaties provide certainty for critical mineral investments essential for green technologies, the Panama case reveals a darker reality. 

Cobre Panamá, one of the world's largest copper mines, became the centre of deadly protests in 2023 when Panamanians rose up against what they perceived as environmental destruction and foreign exploitation. Despite copper's importance for renewable technologies like solar panels and wind turbines, local communities reported severe ecological damage, water resource competition, and human rights abuses. 

Following sustained protests, Panama's Supreme Court declared the mining concession unconstitutional, emphasising the fundamental right to a healthy environment. The government subsequently closed the mine and imposed a moratorium on new mining operations. 

In response, the Canadian company First Quantum Minerals and other affected parties initiated five international arbitration cases against Panama under the Canada-Panama Free Trade Agreement. These cases highlight the controversial nature of Investor-State Dispute Settlement (ISDS) mechanisms, which allow corporations to bypass domestic courts and sue governments directly. 

The authors point out that ISDS proceedings lack transparency, exclude affected communities, and primarily benefit large multinational corporations. The threat of massive compensation awards can create "regulatory chill," preventing governments from implementing environmental and social protections. 

Most critically, claims that investment treaties facilitate the just energy transition are increasingly being debunked. Research shows no evidence that such agreements increase renewable energy investment flows, and the inflexibility of ISDS contradicts the adaptability needed for evolving climate policies. 

The blog concludes that a truly just transition cannot accommodate a dispute resolution system that undermines justice itself by protecting corporate interests at the expense of human rights and environmental protection. 

Read the full analysis at the BHRJ Blog. 

Read more

[New publication] Investment arbitration perpetuates environmental injustice
New research sheds light on how extractive foreign investment projects affect local communities and their environment. In their chapter "Polenta and Cyanide? Investment Arbitration as Prospective Environmental Injustice in Roșia Montană", researchers Stephanie Triefus and Irina Velicu (CES-UC, ULBS) talked to people affected by these projects and found that the system used to settle foreign investment disputes often excludes local community voices. Read more.

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About the authors

Dr Stephanie Triefus is a Researcher at the T.M.C. Asser Instituut and the Academic Coordinator of the Netherlands Network for Human Rights Research. Her research interests include business and human rights, climate change and international economic law.

Rafaella Monesi holds an LL.M. in International Law and Global Governance from Tilburg University, she was previously a research intern at T.M.C Asser Institute in the field of business and human rights.

Dr Stephanie Triefus