The Bilateral Agreement for the Promotion and Protection of Investments between the United Kingdom and Colombia

Lord Bishop of Oxford Excerpts

Wednesday 30th July 2014 Grand Committee

[The Lord Bishop of Sheffield]

My Lords, I shall speak briefly to support and echo the excellent remarks of the noble Lord, Lord Stevenson, and the points made by other noble Lords on the dangers posed by this treaty, in three specific areas.

First, on the protection of land ownership rights, as we have heard, this is no small issue in Colombia. A concern for the common good of the international community must surely include ensuring the ability of Colombia to continue to regulate in the interests of its own people, especially on this key issue. Such a concern would clearly preclude the binding of the Colombian people to corporate rather than national interests. We must therefore work to achieve greater reciprocity in the balance of protections afforded to investors, the Colombian Government and the wider citizenry, including the indigenous peoples in respect of land ownership rights. To this end I, too, urge the Government to incorporate safeguards to the investor-state dispute settlement provision to ensure that the UK complies with its human rights obligations and commitments made in Good Business: Implementing the UN Guiding Principles on Business and Human Rights.

Secondly, I wish to echo the excellent remarks of the noble Lord, Lord Stevenson, on the dangers posed by this treaty to the protection of the human rights of the Colombian people. Assurances are needed from the Government that the necessary changes will be undertaken to ensure that the treaty does not undermine Colombia’s ability to meet its international human rights obligations. This is particularly necessary with respect to upholding the indigenous peoples’ right to free, prior and informed consent, and their right to self-determination and their own development, as guaranteed in the United Nations ILO Convention 169 and the treaty on the rights of indigenous peoples.

Thirdly, I strongly urge the Government to establish an annual monitoring system for the treaty, to measure the impact of this agreement on both human rights and peace agreements. In the interests of accountability, as has been suggested, such monitoring ought to be incorporated into the annual FCO human rights report.

[The Minister of State, Department for Business, Innovation and Skills & Foreign and Commonwealth Office (Lord Livingston of Parkhead) (Con)]

My Lords, I thank the noble Lord, Lord Stevenson, for proposing this debate and I thank other noble Lords, particularly on the last day of the session, for their contributions. I know that many in this House take a close interest in Colombia, the progress that that country has made and the challenges it has faced over recent years. As I think noble Lords will be aware, this matter has also been debated in the other place.

I make it clear at the outset that the Government believe that the UK-Colombia investment treaty will benefit both countries. It will encourage increased levels of investment that will contribute towards economic growth, which I believe is in everyone’s interests. This view is shared by the democratically elected Colombian Government. They ratified this treaty in 2013 and have been pressing since then for the UK to ratify it as soon as possible. They have stated that they believe it will stimulate investment flows, guarantee the transparency and protection of investments within the standards recognised by international law, strengthen Colombia’s commercial ties with the rest of the world and guarantee equal treatment to Colombian investors in the UK.

In the next few years, there will be significant investment opportunities in Colombia in sectors where British companies are world leaders, including infrastructure, extractives, education, science and innovation. With the investment treaty in place, I believe that British companies are more likely to invest in projects which will help to deliver the right answer for Colombia. Colombia has investment treaties with many other major trading partners, including the US, China, India and Spain. They have also recently reached an agreement with France and it is right that UK investors should enjoy similar protections.

A number of concerns have been expressed in this debate and in other fora. I believe that some fears are exaggerated, but I understand them. First, it is suggested that the treaty will harm Colombia by impacting on the ability of the Colombian Government to regulate because of the risk of having to compensate investors who may bring compensation claims under the agreement, particularly through the ISDS clause, which has been mentioned.

Before I deal with individual questions, some facts are useful. For example, the UK has 94 such agreements. In aggregate, if you add them all together, they have been in existence for more than 2,000 years. There have been two cases and neither of them have been successful. The point about ISDS clauses is that they kick in only when there is not sufficient domestic process to deal with such matters. ISDS clauses are instead of adequate domestic processes. In that context, it is worth pointing out that I do not believe that Colombia has ever faced an ISDS claim.

However, despite the fact that history tells us that that is not a route for corporates to override domestic policy—a view that many have expressed—we have sought to modernise the ISDS clause to protect the state. Several noble Lords have mentioned TTIP and CETA. Although this agreement was made before they were, it contains many of the items raised in relation to TTIP. We cannot replicate the TTIP clause—not least because the TTIP clause does not exist. In fact, there is some debate in the EU whether there will ever be an ISDS clause in TTIP. I think that there may well be.

I would like to go through some of the protections in the treaty. First, it excludes shell companies from investment protection. That is important because some of the more egregious uses of ISDS clauses between third-party countries have been through the use of shell companies. There are also measures to prevent vexatious or frivolous claims. The scope of what is deemed to be fair and equitable treatment is limited; that is important. Indirect expropriation is explicitly defined; I will mention that later in relation to public policy matters. Investors must pursue resolution through the domestic legal system first for six months before submitting the claim. Having read through the treaty again, it aims to cover many of the issues raised.

Taken as an overall package, this is designed to discourage speculative claims. The Colombian Government and the UK Government negotiated it at some length. Investors should rightly have grounds for a claim if they have suffered discriminatory and genuine mistreatment. It has been used in other countries in that manner. By prioritising domestic resolution, ISDS itself would represent a last resort.

The noble Lord, Lord Alton—and, I think everyone else—raised issues about human rights. Of course, in Colombia, this issue is complex and difficult. The Government recognise the progress that the Colombian Government have made in tackling human rights issues, but clearly they are not there yet. There are still challenges and more that can be done to improve the situation in Colombia, especially for human rights defenders, victims and land restitution claimants and to prevent sexual violence. The UK Government will continue to discuss the matter and raise it with the Colombian Government.

The continuing armed conflict is one of the major issues—