BITing points

WilfStevenson.jpgWilf Stevenson on placing our concerns with the UK-Columbia Bilateral Investment Treaty on the parliamentary record

The UK-Colombia Bilateral Investment Treaty (BIT) is designed to provide important protections to British investments in Colombia. As ‘procedures’ however, mean there is no other chance to discuss the issues many inside and outside Parliament would like raised, Labour has decided to put down a motion (debate today in the Lords) on the fact that these protections are controversial.

It is important to note at the start that UK businesses don’t appear to need this agreement in order to encourage investment in Colombia. Colombia is one of UKTI’s 20 High Growth markets, and we’re already its second largest foreign investor – much of it in the extractives industry. Between 2009 and 2012, our exports of goods and services to Colombia rose by 126% - the highest level of any major market. It has been predicted that Colombia will invest £50bn in oil and gas over the next four years, and around £60bn in infrastructure over the next eight.  

Because of EU considerations, the UK has been slow to ratify BIT, even though the current Colombian government did so last year. And the fact that Colombia, at both ministerial and official level, has been pressing our government to do so as soon as possible suggests they consider the entry into force of BIT as positive, bringing benefits that outweigh the risks of investor claims and impacts on public policy.

In case anyone thinks that this is a hypothetical risk, Colombia’s neighbours Ecuador, Peru and Mexico have, respectively, been the subject of 14, 3 and 10 such claims. $81.4m is the average compensation paid to investors over the 83 known ruling in favour of investors and last year’s $1.17bn to Occidental from Ecuador was the equivalent of that country’s entire education budget. I hope today we can persuade the UK government to reflect carefully on whether BIT correctly balances providing protection for investors and giving Columbia the space it needs to regulate in the wider public interest. 

Nearly six million people have been forcibly displaced in recent years in Columbia, and land reform is thought by many to be key to the peace discussions with the rebel agrarian group, FARC currently taking place in Cuba. But BIT does not seem to be supportive of the Colombian government’s approach, and some have argued that it puts at risk the implementation of the Land and Victims Law passed in 2011.

BIT was drafted before the emergence of the UN Guiding Principles on Business and Human Rights. The European Union is, rightly, committed to only signing treaties with countries that meet its values of democracy, the rule of law and respect for human rights. Also, the UK has made significant commitments recently in its Action Plan for the Implementation of the UN Guiding Principles, giving the undertaking that 'agreements facilitating investment overseas ... incorporate the business responsibility to respect human rights, and do not undermine the host country’s ability to meet its international human rights obligations'.

That wording however does not appear in the treaty – something that we will question Ministers about today. We also want an explanation of how the UK will ensure BIT does not undermine Colombia’s ability to meet its international human rights obligations. Of course, the government could go further and provide an annual monitoring of BIT, with the results of this monitoring being incorporated into the Foreign Office’s annual Human Rights report.

Lord Wilf Stevenson of Balmacara is Shadow Business Minister in the House of Lords

Published 30th July 2014

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