Between the devil and the deep blue sea—towards access to justice for local communities in investor-state arbitration or business and human rights arbitration

Abstract

This article focuses on the proposal to adapt international arbitration to business disputes involving human rights. The Business and Human Rights arbitration (BHR arbitration) proposal seeks to give local communities who are victims of multinational corporations’ human rights and environmental abuses access to justice in a specialized international BHR arbitration tribunal. Through a comparison between investor-state arbitration (ISA) and BHR arbitration, this article contends that it would be more efficient to reform ISA than to create a BHR arbitration tribunal. Reforming ISA would avoid the possible parallel arbitration systems that may arise from the duplication of international governance efforts. It would also reduce local communities’ need to resort to transnational litigation, which is procedurally complex and often unsuccessful. Therefore, the possibility of ISA reform makes the BHR arbitration proposal superfluous or, at best, limited in its potential application. Creating a new arbitral structure that is untested and fraught with procedural and substantive complexities may not be worth the trouble. Considering the parallels between the ISA and proposed BHR arbitration, and the prospect of creating a one-stop shop for business and human rights abuse, this article suggests that BHR arbitration is an unnecessary governance effort in international arbitration and a distraction from necessary ISA reform.