Colombia: Bilateral Investment Treaty

Question

14:48:00

Asked by

To ask His Majesty’s Government what assessment they have made of recent comments by the trade minister of Colombia regarding the investor-state dispute settlement provisions in the UK/Colombia bilateral investment treaty.

My Lords, the Government value the UK/Colombia bilateral investment treaty in the investment relationship between our countries. The treaty covered £6.8 billion of bilateral investment in 2023. It provides greater certainty for investors through legally binding investment protection provisions, which ensure that both UK and Colombian investors are protected against unfair and discriminatory treatment and expropriation without adequate compensation.

My Lords, my noble friend will be aware that Colombia seeks renegotiation of the terms of its investment treaty with the UK, concerned—and it is not alone in this concern—that the ISDS provisions are undermining its sovereign democratic right to legislate to protect its indigenous community and environmental rights, or to implement aspects of its national peace plan. In 10 years, it has faced 23 ISDS claims by multinational companies. One was by Glencore mining, prompted by a refusal to authorise the expansion the largest open-pit coal mine—or, if it is not the largest, it is one of the largest—in the world. Last year, we withdrew from the energy charter because of concerns that its ISDS provisions would impede our policy to phase out fossil fuels. It would be somewhat inconsistent to do that while compelling Colombia to abide by similar ISDS provisions in our treaty with it.

My Lords, as of today His Majesty’s Government have not been formally approached by the Government of Colombia about this, but we are of course always open to hearing the views of our trading partners. Established forums exist for civil society organisations to raise and discuss trade-related issues with government Ministers. Most recently, my right honourable friend the Minister for Trade Policy and Economic Security hosted a civil society round table in December, which included a discussion on ISDS. Ministers will continue to engage with a range of stakeholders, including from civil society, across the full range of trade policy issues, including investment.

My Lords, as we have heard, ISDSs are not rare—there are many of them. However, increasingly they are coming under scrutiny and, moving forward, some countries are not seeking them because, as in high-profile cases such as the ones we have heard about, and in others, democratically elected Governments are being challenged and are having to overturn legitimate public policy. Can the Minister tell your Lordships’ House whether she recognises the improper regulatory chill that these agreements can create for democratically elected Governments? Can she set out, in a general sense, the Government’s position for the future? Will the Government continue to seek ISDS agreements in trade deals that they are currently negotiating?

I am grateful to the noble Lord. I appreciate, as he invited me to, that these agreements stand over a very long period of time. Between an agreement being put in place and 10 years later—which is where we are now with Colombia—at which point there is an opportunity to look at it again, many things may change and it is open to either side to seek changes to the agreement, or to walk away entirely. At the moment, the Colombians have not indicated to us that that is their intention. It should be remembered that these bilateral treaties are helpful in providing assurance to investors, and that is something that we would not want to harm in any way.

My Lords, as of last year, ISDS claims pending against Colombia exceeded $13 billion. As the penholder for the Colombian peace process at the Security Council, what assessment have His Majesty’s Government made of the impact of this on Colombia’s ability to resource the implementation of the peace accord? How can we leverage our role as penholder to help Colombia achieve this?

The United Kingdom is absolutely committed to supporting Colombia in the peace process, and enormous progress has been made. We see these things as separate. I think Colombia has faced 26 cases since 2016. Only four of them have been brought by the UK, so we hope that we can continue to trade with Colombia and to invest in Colombia—it is an important partner for us—and to support it as it moves forward with its peace process.

My Lords, the arguments against the ISDS do not come just from the ecological lobby; there is a democratic argument against them, and there is an argument that they give some foreign companies an unfair advantage over domestic ones. None the less, as the Minister correctly says, they are a necessary way of attracting investment. Can she confirm that, wherever we decide to draw that balance, we should apply it consistently across all our trade deals? It would be neither credible nor sustainable to start changing them because of lobbying from one particular country, which would then encourage every other trading partner to do the same thing.

I think so—but there is a difference between being consistent and having a cut-and-paste approach. Every context is unique and Colombia is a particularly special partner for us, for reasons that noble Lords will understand.

My Lords, I declare my interest as director of the Hay Festival Cartagena in Colombia. We will have our 20th anniversary next week, when we will be joined by many politicians, environmentalists and tribal leaders. Perhaps I might extend the question from the noble Baroness, Lady Coussins, about the $13 billion. Australia does not have an ISDS agreement with Colombia. The mega mining group BHP has found a workaround via its UK-registered spin-off company, South32, to sue Colombia for $94 million over alleged unpaid royalties from a mine that the Constitutional Court of Colombia has ruled causes serious long-term health and environmental issues. As the penholder, can we not intervene in this? Colombia has 10% of the world’s unique birds and, just in the last 12 months, it has found 12 new species of plants and an animal, an amphibian, that we did not even know existed.

Colombia is an astonishing country, not least because of its biodiversity. It would not be right to try to leverage our role as penholder for the peace process at the Security Council to intervene in issues of trade. The UK is the fourth-largest investor in Colombia and we seek to work through these issues alongside Colombia in the spirit of mutual respect and partnership.

My Lords, the Colombian Trade Minister said that the Colombian justice system had the tools to guarantee investors all reasonable protections and due process for the protection of their rights. Have His Majesty’s Government conducted an assessment of the Colombian justice system? If a renegotiation of the agreement takes place, are they satisfied that UK investors’ rights will be guaranteed all reasonable protections? That is particularly important given the ongoing dispute between ViiV Healthcare and the Colombian Government over intellectual property rights.

The noble Lord opposite is rather rushing his fences. Of course we would look at these things, should there be a formal request for a review or any change from the Government of Colombia, but, as of today, that is not the case. We regularly speak with our partners in Colombia—I was there myself in December—so we would be very happy to have any kind of dialogue that they wish. However, we have not had that request as of now.

My Lords, does the Minister recognise that a fatal flaw of the ISDS secret court system is that it privileges big corporations over access and rights for citizens and workers? Can she update us on how the Government are pursuing a trade policy that can be a win-win in providing and protecting jobs and levering up labour standards, recognising that Colombia has a history of being one of the most dangerous countries in the world in which to be a trade unionist?

I recognise what my noble friend said. I have met with many civil society organisations, including Justice For Colombia, very recently. It is important that these agreements provide a win-win. The UK wants to be a responsible partner with all our trading partners, but—I think it is fair to say—especially with Colombia.

My Lords, following on from the last question, the United Nations special rapporteur on the right to development has said that ISDSs are crippling for many countries in terms of the impact on development. They have been described as a form of modern-day colonialism. Does the Minister agree with that? Does she agree that ISDSs are a significant barrier to delivering the sustainable development goals to which the whole world has signed up?

I certainly would not describe our relationship with Colombia in any way as being to do with colonialism, and Colombia would not, either. We have a respectful, equal relationship of partnership. We have supported Colombia for a very long time, across multiple Governments both here and there, towards its goal of total peace, and that is what we will continue to do.