Public Services in the Crosshairs
The impacts of investment protection regimes on the public services sector in Latin America and the Caribbean
published: April 2023
The report outlines the risks that the investor-state dispute settlement (ISDS) mechanism poses to the public services system of Latin American and Caribbean countries.
Latin America and the Caribbean is the region with the second highest number of investment protection treaty claims before arbitration tribunals in the world, and one third of the claims received are related to public services. In Argentina and Bolivia, more than 60% of ISDS claims are related to the utilities sector.
The most affected public service is energy supply, followed by telecommunications. 72% of the claims already settled in these cases ended in a decision that benefited investors and states were ordered to pay out more than $3.901 billion.
While the promise of BITs is to encourage foreign investment, there is no direct relationship between more BITs and more foreign investment, while the danger to sovereign state action is very high, affecting governments’ possibilities to take policy measures that put the common good at the centre and ensure the proper functioning of public services.
This report aims to provide elements for debate, while analysing examples of states that have already modified or even terminated their investment protection treaties, such as Bolivia, Ecuador, Indonesia and South Africa.
