They claimed that the lawsuit that Philip Morris filed against the Uruguayan State before ICSID -the World Bank’s dispute settlement tribunal- shows that no country is free from the risks that Investment Protection Treaties imply for national sovereignty and the implementation of public policies.

“The regional scenario is determined by two forces that are going in opposite directions: on the one side, there is the big economic, political and legal power of national companies and transnational corporations; while, on the other side, there is a demand to reform the multilateral system to make it more democratic and to support all the countries’ right to development”, said the organizers of the event.

Karin Nansen, of REDES-Friends of the Earth Uruguay, said bilateral investment treaties “proliferated in the 90s” and that many Latin American organizations began to analyze this problem in 2004 mainly because the investor-State relationship was an important part of the Free Trade Agreements that were being discussed at the time.

More recently, in February of 2010, Philip Morris filed a lawsuit before ICSID as a result of the anti-tobacco laws passed in Uruguay, claiming the provisions were in violation of the bilateral investment treaty signed between Uruguay and Switzerland.

The tobacco corporation claimed that Uruguay had violated intellectual property rights and that would amount for an expropriation. Although Philip Morris should have first filed a lawsuit in an Uruguayan court, the company said that requirement was not included in other investment protection treaties signed by Uruguay.

Nansen emphasized that Uruguay claimed the tobacco corporation did not actually invest in the country, so it is not a matter to be resolved by ICSID.

“This opened up an interesting debate of when an investment implies development and when it affects it. We should discuss what is the more convenient framework for this development”, said Nansen.

Sebastián Valdomir, also member of REDES-Friends of the Earth Uruguay, recalled that in 2004 there was a referendum in Uruguay that resulted in a constitutional amendment to nationalize water. As a result of this, all water privatizations were considered illegal and the concessions had to be terminated.

In this scenario, company Suez, which had the concession of water services to the east of Maldonado creek, told the government that they could sue the State based on an investment treaty signed between Uruguay and France. “The government at the time had to negotiate and paid damages. The people’s decision was limited by corporate pressure”, said Valdomir.

Another example mentioned was the second container terminal in Montevideo Port (Uruguay’s capital). In this case, Belgian company Katoen Natie threatened to sue the State and ended up influencing public policies on logistic issues.

“The corporate threat restrains government action” said Valdomir, who also mentioned the example of Montes del Plata, a Finnish- Chilean company who cited the same arguments when opposing the Tax on Rural Property Concentration (ICIR).