The Forgotten Voices: Power Imbalances in Guatemalan Investor-State Dispute Settlements

by Ava Peters

On June 13, 2012, Yolanda Oquelii, leader of the La Puya Peaceful Resitance movement in Southern Guatemala, became the subject of an assassination attempt. She was targeted for starting a non-violent protest, together with many other brave women and men from her community, against a gold mining operation near their homes. They led a sit-in at the “El Tambor ” mine to protect their land from the extreme social and environmental degradation caused by exploitative practices carried out by US-based company Kappes, Cassiday & Associates (KCA). Their practices have affected air quality, as well as flora, fauna, top soil and the available quantity of water for local residents. Ever since, community members have continued their sit-in to keep vigil around the clock in the face of violent police harassment, anti-riot intervention and various legal challenges. Eventually, in 2016, their persistent protest triggered a formal lawsuit, setting off a chain reaction of cases which escalated through the Guatemalan court system. 

In 2014, the Guatemalan NGO Centre de Acción Legal, Ambiental y Social de Guatemala (CALAS) filed a case against the Ministry of Energy and Mines (MEM) contending that “Exmingua”, the Guatemalan subsidiary of KCA, did not hold a valid operating permit based on its failure to carry out community consultations required under Guatemalan law and ILO Convention 169. KCA contended that this claim was ‘meritless’ and questioned whether there was any Guatemalan law requiring the implementation of ILO 169 at the time when the mine was constructed.  However, in November 2015, the Guatemalan Supreme Court held in favour of CALAS and issued a final decision in 2016 requiring the suspension of mining activities at El Tambor. But just as the valiant efforts of La Puya seemed successful, KCA launched a counterattack, filing an ISDS case against the state of Guatemala claiming damages of $300 million.

What are ISDS Cases? 

ISDS––or investor-state dispute settlement––cases are legal challenges that allow foreign investors to resolve disputes with the government of the country in which their investment was made. They are based on legislation found in International Investment Treaties between states which typically include substantive protections and obligations that protect the economic rights of the investors. 

The international treaty relied upon in the case of Guatemala was the DR-CAFTA (Dominican Republic-Central American Free Trade Agreement). KCA argued that Guatemala was in breach of the international investor agreement terms that ensured ‘fair and equitable treatment, a minimum standard of treatment, indirect expropriation, and full protection and security.’ They claimed that the ongoing protests illegally blocked the entrance to the mine sites, preventing Exmingua from “using and enjoying” its exploration license. In addition, they argued that they were “arbitrarily and unlawfully” harmed by the MEM’s suspension of the export certificate. They calculated that they were deprived of the value[h] of the El Tambor project, amounting to $150 million, and the Santa Margarita project (of at least the same, if not greater value). Additionally, they allege that they have suffered a loss of $500,000 when they prohibited the exporting concentrate shipments. 

KCA martialled a convincing argument in the eyes of arbitrators: it is their gold mine, but the case fails to incorporate the struggles of those involved: it is also a gold mine responsible for numerous abuses against local communities, posing health and environmental risks to Guatemalan citizens. Local communities have faced violence, repression, and criminalization, whilst background forces continue to deplete the region’s natural resources. It’s an interesting consideration to make given that these claims aren’t rooted in empirical evidence. Considering this, should these facts be considered in the ISDS case? Past cases involving the DR-CAFTA suggest otherwise. Guatemala faced another claim arising out of an investment in a Guatemalan electricity distribution company by the U.S. investor Teco Guatemala Holdings LLC––a case that was decided in favor of the investor. Similar to the KCA case, Teco claimed Guatemala breached the ‘fair and equitable treatment / minimum standard of treatment including denial of justice claims’ under the IIA. The ruling emphasized the distinct power asymmetry in ISDS cases: the tribunal reasoned purely on the basis of the treaty, making no effort to acknowledge the stake held by third parties. 

Problems with ISDS

While particularly problematic, the Guatemalan case is not unique. Hundreds of ISDS cases are still pending, forcing us to question the effectiveness of the system and the millions of communities left waiting for their fate to be determined by a system pitted against them. 

Arguably, the most pressing flaw of the ISDS system is that it tends to cause a “chilling effect” on the regulatory system: a situation in which the threat of an investor’s potential claims leads to governmental reluctance to adopt policies out of fear of being sued by huge conglomerates. In other words: simply knowing that a company might sue stops smaller host states from protecting the rights of their citizens. With reference to the KCA case, the minimum claim of $300 million, if granted, would place an extortionate burden on Guatemala’s coffers. While Guatemala is in a better position than other developing countries to satisfy this debt, many other countries would face bankruptcy when confronted with such a large claim. 

Of greater concern is the lack of transparency during ISDS disputes. Compared to the US legal system, ISDS proceedings are relatively opaque and exclusive. Tribunals can decide whether to accept or reject third-party amicus briefs and, unlike other legal recourse[s], third parties have no ability to intervene, leaving local communities without a say in which their interests are significantly impacted.

ISDS cases do not enjoy a consistent thread of jurisprudence. While precedents in this form of international arbitration do exist, there is no doctrine of stare decisis, so that a previous ruling on one issue from an analogous case does not ensure that a ruling in a pending case will be the same. Cases decided regarding similar matters, even involving the same country and with the same kind of investor have produced different results. This lack of consistency is exacerbated by the absence of an appellate system to correct substantive errors and ensure predictable outcomes. Arbitrators and decision-makers can be subject to bias or constrained by a lack of independence, resulting in decisions favoring investors, with no checks and balances. The rights of local communities and the state at large are left unacknowledged, whilst the rights of investors have the potential to be overemphasized. Creating a trend, the power imbalance inherent to ISDS is only set to increase. 

Finally, the cost and duration of ISDS cases is particularly problematic. Arbitration is usually a long, drawn-out process that negatively impacts host states far more than investors. A King’s College London study revealed that ISDS tribunals took on average 181 days, and 103 days for annulment committees to reach a decision. The written phase for submitting briefs – without annulment – took on average 407 days. The KCA case was brought to the court in 2016, and for 5 years has been consuming money, time, and resources whilst wreaking havoc on powerless local communities. As environmental journalist Louis Magriel observed …”This type of arbitration rejects community self-determination and the role of the government to make decisions that protect the best interests of their population.” (Gold Mining and Violence by Louis Magriel).

Potential Solutions 

ISDS dispute resolutions must produce fair, efficient, coherent and consistent solutions. At present, this is not the situation – we need to consider improvements which recognize and uphold the rights of all parties involved. Various short and long term solutions have been proposed. 

The ‘quick fix’ solution to the shortcomings of ISDS would be dispute prevention. This involved creating institutions that act as a precautionary structure aiming to reduce the legal temperature between investors and states. It would focus on developing specific working mechanisms which mediate between all parties involved. As appealing as the immediacy of this solution sounds, it is not viable long term; more permanent solutions need to be considered to properly uphold the rights of those other than the investors. 

Longer-term reform of the ISDS system could be a hopeful, albeit lofty, aspiration to redress the power balance.  Adapting ISDS policy through the institution itself, for example through making it easier to submit amicus briefs or allow the state to establish bi-legal challenges that mirror the ISDS suit, could help create a more equal system. However, the efficacy of these outcomes are limited. Any reform of the ISDS system will be long and tiresome, and at present, there is no clear solution. 

Another potential solution, as advocated by the Columbia Center for Sustainable Investment, is to terminate or withdraw from IIA’s altogether. The Center produced a report posing some potential reforms: “Chief among [ways for states to exit or mitigate the recognized adverse effects of the more than 3,300 treaties], we’ve advocated for termination (or withdrawal of consent to ISDS arbitration) of these treaties, as a near-term solution, alongside any longer-term project.” However, this impacts the economic interests of both state and investor, so is likely to be opposed by both the governments and corporate actors involved. 

Arguably, the most extreme yet effective solution would be to create an entirely new system alternative to ISDS. Countries in Latin America have led in this pursuit, establishing the ‘Centro de Solución de controversias en Materia de Inversiones’ which aims to establish a new mechanism to resolve investment disputes. However, progress has been slow and the states involved have faced various disagreements. The EU has also attempted to create a ‘multilateral investment court,’ but the changes made from the current ISDS system are minor and have failed to consider the key shortcomings of inefficiency, lack of transparency and failure to uphold the rights of all parties. Ultimately, whilst the idea of creating an entirely new system seems optimal, the actual act of establishing one that fits the needs of all stakeholders is complex and the potential for completion is low. 
Through briefly outlining some major potential solutions, it’s obvious there is no clear answer. Yet, there is a clear goal: to make the ISDS structure more equitable and to protect the rights of marginalized, developing nations that have been exploited by huge companies. We need to continue the fight to reform the system and ensure that stakeholders don’t get left out of the conversation.

The U.S. Criminal Justice System Needs to Start Treating Children Like Children

by Bianca Ortiz-Miskimen

On any given day, tens of thousands of incarcerated children are forced to eat, sleep, and learn in juvenile detention centers and adult prisons across the United States. 

News stories of children being charged for harmless behaviors have become increasingly publicized, with examples ranging from not completing homework and participating in cafeteria food fights to stealing 25-cent candy. While there are child offenders who commit more serious crimes, they all deserve fair trials and sentences that take into account their young age.  

Research from Stanford University shows that children have difficulty understanding the long-term consequences of their decisions and lack cognitive control during emotional situations. Experts also link moral conscience to the prefrontal cortex, which does not fully develop until adulthood and is often delayed in children who experience trauma as a result of being victimized early in life.

When a child is charged with a crime, a court will decide whether they will be tried as a child or an adult based largely on the severity of the crime. Those with less serious offenses are treated as children and have their cases heard by juvenile judges that have the power to remand them to a juvenile detention center while those treated as adults may be remanded to an adult prison with protective custody.

Meanwhile, parents of child offenders are forced to foot the bill for nightly housing in juvenile detention centers. Laws requiring these parental payments were meant to avoid burdening taxpayers and to encourage parents to keep their children out of trouble. However, the reality is that most of these parents are low-income and incapable of paying. Although some states have decided to end this practice, laws about charging parents are highly decentralized and can vary from county to county, creating large disparities.

To combat the stress of incarceration on young children and their parents, both New York and New Jersey have recently passed legislation to raise the age at which children may be tried in court as adults. However, the fact remains that in 22 states, there are no minimum age requirements for transferring a child into adult criminal courts, meaning that a child of any age in those states could end up in an adult prison for the rest of their life.

The U.S. Supreme Court has acknowledged the issue of excessive sentencing for child offenders in landmark cases Roper v. Simmons (2005) and Graham v. Florida (2009), in which the Court reversed decisions to impose the death penalty on a juvenile offender and to sentence a minor to life without parole for a non-homicidal offense, respectively. The Supreme Court opinions to reverse these prior holdings were made on the grounds that the childrens’ original sentences violated the U.S. Constitution’s Eighth Amendment prohibition on “cruel and unusual punishment.”

Rights for juvenile offenders were expanded further by the Supreme Court in Miller v. Alabama (2012) and Montgomery v. Louisiana (2016). In Miller v. Alabama, Miller appealed his sentence of life in prison without parole for a homicidal offense on the grounds that punishing a 14-year-old for the rest of his life was cruel and unusual. In a 5-4 decision, the Supreme Court reversed his sentence, with the majority opinion concluding that life without parole is a disproportionate punishment for a juvenile, thus affirming that sentencing for child offenders must be treated as constitutionally different from adult offenders.

This decision was reaffirmed in Montgomery v. Louisiana, in which Miller v. Alabama was used as precedent to assert that sentencing schemes that impose mandatory life sentences onto juvenile offenders are unconstitutional. The Court held a 6-3 decision in favor of Montgomery, stating that the Miller decision applied retroactively to Montgomery’s case. 

In the majority opinion, Justice Kennedy wrote, “In light of what this Court has said in Roper, Graham, and Miller about how children are constitutionally different from adults in their level of culpability, […] prisoners like Montgomery must be given the opportunity to show their crime did not reflect irreparable corruption; and, if it did not, their hope for some years of life outside prison walls must be restored.”

Montgomery, who is 73 years old but was just 17 years old at the time of his crime, is now eligible to be considered for parole. His case has also opened the door for other cases of child offender sentencing decisions to be re-evaluated based on this new standard. Thus far, Montgomery v. Louisiana has allowed more than 500 offenders to be released on parole. 

However, the Supreme Court ought to recognize the capacity for rehabilitation of child offenders beyond the scope of life sentences. Even short stays in juvenile centers can have a profound negative impact on children due to harsh living conditions. For example, two juvenile correctional facilities in Wisconsin were recently hit with a class-action lawsuit in J.J. v. Litscher (2017) for keeping children in solitary confinement, spraying them with mace, and denying them therapeutic programs. 

Confinement in juvenile centers has become particularly harmful during the COVID-19 pandemic, which has caused centers to cut visits from families and friends to prevent the spread of the virus, leaving thousands of incarcerated young people feeling extremely isolated.

Despite clear issues, some have argued that punishing minors will serve a positive long-term function by teaching children at a young age that their actions have consequences. The problem is that not all children are subject to the same punishments. 

While white children make up the largest share of juvenile detainees in 45 of 50 states in the U.S. as of 2019, children of color — particularly African American children — are disproportionately represented in juvenile detention centers and are referred to juvenile courts at a higher rate than their white peers. This can be attributed to a number of factors, the most troubling of which include racial bias from judges and prosecutors.

In 2018, the Senate reauthorized the Juvenile Justice and Delinquency Protection Act to update national standards on the judicial treatment of minors. The bill, introduced by Senators Chuck Grassley (R-IO) and Sheldon Whitehouse (D-RI) aims to create restrictions on locking children up for statute offenses (eg. skipping school or running away from home), reduce racial disparities in the juvenile justice system, and support alternatives to incarceration for nonviolent offenders. Proposed alternatives include behavior management programs, problem-solving courts, street and home-based services, and drug abuse prevention and education services.

Experts in the fields of psychology and constitutional law have made steps towards affirming that children are not as capable as adults of understanding the consequences of their actions. Now, federal, state, and local laws must reflect this truth and discontinue practices that are overly punitive and insufficiently rehabilitative towards child offenders who cannot yet fully appreciate the weight of their transgressions.

It’s Not Just Me, It’s Also You: How Shared DNA Complicates Consent

by Ethan Magistro

With just a sample of your DNA, you, your immediate family members, and many other distant relatives can be identified. Your genetic information can be used to determine you and your families’ insurance policies, expose medical conditions you didn’t even know you had, and, in the worst case, be used to identify and arrest someone you may be distantly related to. The deoxyribose nucleic acid (DNA) contained within every cell of our bodies holds intimate details about each of us. Yet when users send sample DNA to direct-to-consumer (DTC) testing kit companies, only their consent is needed to share information that belongs to many of their family members. Because of this, I argue we should drastically rethink our understanding of DNA. Rather than conceptualizing DNA as analogous to other types of private property that can be traded with individual consent, DNA trade should require the shared consent of family members. The difficulty in obtaining that consent points to a colossal need for the development of genetic privacy laws.

To understand why DNA should be understood as a form of shared property, it will be helpful to outline the economic and legal landscape of consumer genetic testing. The past few years saw a spike in interest for DNA testing and an explosion in the DTC testing kit market, which is dominated by AncestryDNA and 23andMe. Although the market has died down since then, worries about political and enforcement abuses of genetic information and medical privacy concerns are still in focus. 

Concerns about enforcement abuses of genetic information usually involve the Fourth Amendment, which protects citizens from unreasonable searches and seizures. This was exemplified in Maryland v. King, a U.S. Supreme Court case which held that genetic testing is similar to fingerprinting, and is therefore a reasonable search under the Fourth Amendment, to the chagrin of privacy advocates. The latter issue of medical privacy deals with Title I and II of the Genetic Information Nondiscrimination Act Of 2008 (GINA) and the Health Insurance Portability and Accountability Act of 1996 (HIPAA), both of which are notoriously lackluster in protecting privacy, especially regarding DTC testing, which neither law protects. Beyond this, some states have genetic privacy laws with varying levels of consent required by companies. Many of them provide little extra protection. This lack of privacy protection has caused the DTC industry to mostly self-regulate, which has been spotty at best: in their privacy policies, some genetic-testing companies wrongly claim they comply with HIPAA, while some companies have no privacy policies at all.

A lack of strong DNA privacy laws presents an imminent threat to genetic privacy because of how valuable a sample of DNA can be. Genetic information’s longevity, immutability (you cannot change your DNA like you can a lost password) and predictive ability about future health make it extremely valuable. Yet DNA is unique in that it is able to identify an individual as well as their family members, since people share large portions of DNA with their relatives. This is why it has been so often used to gain leads in criminal cases

Being so valuable, it makes sense why shoddy privacy policies exploit a lack of laws to gain control of DNA. Deceptive policies mislead individuals to give away most of the control over genetic information, and, therefore, their family’s genetic information, without ever knowing it. With that control, companies can trade or exchange this data, often selling it to unknown third-party companies who can use it as they wish. Bigger companies like AncestryDNA or 23andMe are no safer. They may truthfully claim they do not sell your genetic data to third party companies, but the independent labs they send the sample to for analysis make no such guarantees

It is hard for consumers to notice that. A large company’s connection to third parties is often inconspicuously snuck into their privacy policies. Before it was shut down in late 2020, AncestryHealth, the division of AncestryDNA designed to identify genetic health risks, sent DNA samples to a third-party group called PWNHealth for analysis. A link to PWN’s privacy policy is at the very end of AncestryDNA’s terms and conditions, which itself is in small print at the bottom of the AncestryDNA webpage. PWNHealth’s privacy policy is far less robust than Ancestry’s. Two points stick out:

You have the right to request in writing that we restrict how your health information is used or disclosed. For most requests, under the law, we are not required to agree to your request.

and

“If you request that Ancestry delete your information held by Ancestry, such request will not result in the deletion of information held by PWNHealth. Such information will be retained by PWNHealth in accordance with applicable law and this Privacy Policy.”

It is clear that PWNHealth has no intention of removing or restricting its use of submitted genetic data. Even if PWNHealth claims that they will only trade “non-identifiable data,” the shocking ease with which genetic data can be re-identified makes this claim essentially worthless. So while AncestryDNA will not sell your genetic data, PWNHealth can and will.

Despite all of these concerns, PWNHealth is still acting within the law so long as a user consents to its terms of use and, therefore, how it uses your genetic data. But is an individual’s consent enough considering that their DNA sample contains information about their relatives? It should not be. DNA contains valuable, identifiable information about a user’s family and distant relatives that should not be shared without their knowledge. Instead, companies who offer DTC genetic testing should require consent from those with whom an individual shares the majority of their DNA.

Already that idea sounds burdensome. Should someone really have to call their parents, grandparents, and siblings if they want to understand more about their own medical information? What about those who are estranged from their families, or people who are adopted and do not know their biological relatives? Here, a middle path exists between individual consent and shared consent. Perhaps for medical information, relevant to an individual who may want to alter their lifestyle to decrease the risk of a condition manifesting, an individual should use a DTC without providing shared consent. A kit designed to find unknown relatives who may wish to remain private, on the other hand, should require companies to ask for consent from those relatives.

Yet this argument ignores the threat that third-party actors pose. The importance of genetic privacy is less about keeping individual issues private from the family and more about keeping familial DNA out of the hands of third parties like PWNHealth who can trade that genetic information and other groups who could de-identify it or sell it. If you must get a genetic test for medical reasons, it would be wiser to do so in a clinical setting, where HIPAA and GINA offer comprehensive privacy and protection. Without that same protection, DTC tests put many of your relatives’ information at risk.

What could a stronger form of shared consent look like in the DTC arena? One analogy that provides some insight comes from a complaint filed by the Federal Trade Commission (FTC) against Facebook in which the FTC challenged Facebook’s misleading privacy policies and deceptive practices. The complaint alleged that Facebook “told its users that they could limit those who could see their posts to just ‘Friends,’ when in reality—and without warning to the user—doing so would also allow developers of third-party applications used by their ‘Friends’ to access the post.” In other words, “third party applications” of a user’s Facebook friends could look at that user’s posts even if the user did not consent to that action.

This is not a perfect analogy. A post shared with a friend, which is then unwittingly shared with a third-party application, is not the same as DNA, which is physically shared by multiple people. Nonetheless, the FTC acted when Facebook gave third parties access to a user’s post, even when that user had no option to consent to this. In a case involving genetic data, it’s feasible that the FTC could challenge DTC companies for not adequately informing users that their familial genetic data, which they provided without their family’s consent, was now in third-party companies’ hands.

Like those users who had a reasonable expectation that only their friends would see their posts, people who have never taken a DNA test or given away a DNA sample would not expect their genetic information to be in the hands of a group such as PWNHealth. There is a reasonable expectation that genetic information is private. If someone wants to give away valuable information about you — even if it is partly their information too — they ought to seek out your consent.   

Ultimately, the easiest remedy for the lack of genetic familial privacy and the need for shared consent would be stronger genetic privacy laws. The lack of robust genetic privacy laws already leaves consumers unprotected against bad actors looking to profit from their DNA. As genetic testing technology improves and we become able to gain more information from smaller samples of someone’s genome, not having ownership over your DNA could pose a threat to your descendants in the future. Technology that fails to respect these repercussions and ignores the need for consent from multiple parties cannot continue to outpace legislation. Although the complexity of shared consent and its complication of privacy policies leave room for the FTC to police weaker terms and conditions, it would be far more beneficial for all parties if strict regulation, created through legislation, protected the blueprint of life.