Public Citizen | 7 June 2024
The corporate colonization of Latin America
By Iza Camarillo
This report presents a critical examination of the enduring marginalization and vulnerability of Indigenous peoples1 and local communities in Latin America, tracing its roots to centuries of colonial exploitation and its perpetuation through the Investor-State Dispute Settlement (ISDS) system.
Under colonialism by the Spanish crown, Indigenous peoples in Latin America were subjected to violence, exploitation, and diseases brought from Europe, causing a catastrophic loss of life and culture.2 Furthermore, colonialism brutally imposed forced labor to extract vast wealth from the region, primarily in the form of precious metals like gold and silver.
The extractive industries established during this era continue to shape the economic disparities within Latin American nations and contribute to issues of inequality and underdevelopment.
The indelible scars of Spanish colonialism continue to mar Latin America.4 Large corporate interests based in former colonial powers feared that newly independent states would nationalize or expropriate foreign investments as they sought to reclaim their natural resources and key industries.
As a result, Western nations established the ISDS system — predominantly characterized by arbitration proceedings aimed at resolving disputes between foreign investors and host states under the auspices of international law — and convinced former colonies that including ISDS provisions in trade and investment agreements was essential to attract foreign direct investment (FDI).
In the post-colonial era, ISDS has continued the legacy of injustice, particularly impacting Indigenous peoples by favoring foreign corporations at the expense of Indigenous lands and resources, mirroring colonial power dynamics. ISDS acts as an extension of colonialism, prioritizing influential nations and corporations over the sovereignty and development of post-colonial Latin American states.
Furthermore, ISDS harms the environment in numerous ways, including by serving as a tool for corporations that pollute countries to demand payment from governments regulating public health and the environment, causing the taxpayers to suffer from pollution and the deviation of public funds to lining corporations’ pockets.
Latin America faces a disproportionate number of ISDS treaty-based disputes, with 360 out of 1,303 (over one-fourth) of known global cases, despite being home to less than 10 percent of the world’s population.5 Latin American governments have been ordered to pay over USD 33.2 billion in taxpayer money by ISDS tribunals, diverting critical resources away from social needs.
Download the Executive Summary