Public services

Utility corporations have used investor-state dispute settlement (ISDS) provisions found in trade and investment agreements to challenge state attempts to regulate privatized public services such as water, social security or other services.

In response to several governments which have tried to lower public services rates for poorer populations or in face of a significant economic crisis, foreign companies have initiated ISDS disputes, claiming they were treated “unfairly”, due to their loss of profits.

Potentially, any significant reforms of standards in relation to major infrastructure or utilities and associated services could be the target of ISDS.

As of end of June 2015, 6% of all ICSID disputes concerned water services issues.

Most well-known disputes include:

• Azurix (US) v. Argentina: US$165 million awarded in 2006 to the investor, a water company. The dispute arose from the contamination of a reservoir, which made the water undrinkable in the area. The firm claimed the government had expropriated its investment and denied the firm “fair and equitable treatment” by not allowing rate increases and not investing sufficient public funds in the water infrastructure (Argentina-US BIT invoked).

• Tampa Electric Company “TECO” (US) vs. Guatemala: the US-based energy company challenged Guatemala’s decision to lower the electricity rates that a private utility could charge. TECO was awarded US$25 million in 2013 (CAFTA invoked).

• TCW (US) vs. Dominican Republic: the US investment management corporation that jointly owned with the government one of the Dominican Republic’s three electricity distribution firms, sued the government for failing to raise electricity rates and to prevent electricity theft by poor residents. Case settled in 2009 for US$26.5 million paid to the investor (CAFTA invoked).

(November 2015)

iPolitics | 30-Jan-2018
While “significant” challenges remain, all three ministers said some progress has been made this round.
Le Monde | 30-Jan-2018
Les dossiers techniques avancent bien, mais c’est surtout sur les sujets qui fâchent que l’abcès a été crevé à Montréal.
Les Echos | 25-Jan-2018
Le président argentin compte présenter à son homologue français un plan de remboursement de la dette historique de l’Argentine auprès de Engie.
BAE Negocios | 12-Jan-2018
Argentina le pagará a Suez u$s275 millones, lo que representa un descuento del 25 por ciento en relación a los u$s367 millones que se le deben.
ABC Bourse | 12-Jan-2018
L’Argentine paiera au groupe français 275 millions de dollars (environ 230 millions d’euros), soit 75% de la somme qu’il devait à Suez.
Bloomberg | 12-Jan-2018
French co. agreed to $275 million to settle 12-year dispute. Engie is the biggest shareholder in water, sewer company.
Los Andes | 3-Jan-2018
Luego de 13 años, el último laudo del Ciadi quedó firme y fijó la indemnización en U$S 42 millones. El primer fallo disponía 142 millones.
Pulso | 3-Jan-2018
La francesa Brigit Stern representará al Estado, mientras que el argentino Oscar Garibaldi será quien argumentará a favor de la firma colombiana de transportes.
IATP | 12-Dec-2017
A new report finds that the Investor State Dispute Settlement (ISDS) process, included in NAFTA and other trade and investment agreements, is threatening the right to water around the world.
Radio Mundo Real | 28-Jun-2017
Criminal charges pending against 18 community leaders and a billion-dollar court case at ICSID.

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