iT n r An increasing number of international trade disputes are settled through the va World Trade Organization (WTO) dispute settlement (DS) procedure. In parallel, en s an increasing number of international investment disputes are settled through Ts p m an investor-host state arbitration procedure. What does “transparency” mean in a the context of international trade and investment dispute settlement? Why is er ne enhanced transparency demanded? To what extent and in what manner should Tn these dispute settlement procedures be transparent? The book addresses these dc iy issues of securing transparency in international trade and investment dispute s i settlement. pn u Tin e Transparency in international trade and investment dispute settlement drew the T se attention of international economic law scholars in the late 1990s, but most er literature discusses the transparency in trade DS and investment DS separately. Tn Ta The book deals with the issue in a comprehensive and coherent manner, combining lT Transparency in the analyses of the issue in both DS procedures and comparing the pros and cons ei mo to enhanced transparency in them. The main argument of the book is, firstly, n inTernaTional Trade and invesTmenT e that transparency in these procedures should be enhanced so that they may be na Tl dispuTe seTTlemenT accountable to a wider range of stakeholders, but, secondly, that the extent and T the manner of transparency might differ in these two procedures, reflecting their r a structural and functional differences. d e The book appeals to both scholars and students interested in international a n economic law and international relations, as well as lawyers and government d officials who deal with international trade and investment regulation. EditEd by JunJi nakagawa Junji Nakagawa is Professor of International Economic Law at the Institute of E d Social Science, University of Tokyo. Born in Hiroshima, Japan, in 1955, Nakagawa i t obtained his BA, MA and Ph.D. from the University of Tokyo. He has also taught E d at Tokyo Institute of Technology, City University of Hong Kong, University of b Denver, Tufts University and El Colegio de México. His publications include y International Harmonization of Economic Regulation (2011, Oxford University Ju Press), Multilateralism and Regionalism in Global Economic Governance (2011, n J Routledge), Anti-Dumping Laws and Practices of the New Users (2007, Cameron i n May) and Managing Development: Globalization, Economic Restructuring and a k Social Policy (2006, Routledge). a g a ECONOMICS w a ISBN 978-0-415-52873-3 www.routledge.com 9 780415 528733 Cover image © Getty Images Transparency in International Trade and Investment Dispute Settlement An increasing number of international trade disputes are settled through the World Trade Organization (WTO) dispute settlement (DS) procedure. In parallel, an increasing number of international investment disputes are settled through an investor-host state arbitration procedure. What does “transparency” mean in the context of international trade and investment dispute settlement? Why is enhanced transparency demanded? To what extent and in what manner should these dispute settlement procedures be transparent? The book addresses these issues of securing transparency in international trade and investment dispute settlement. Transparency in international trade and investment dispute settlement drew the attention of international economic law scholars in the late 1990s, but most literature discusses the transparency in trade DS and investment DS separately. The book deals with the issue in a comprehensive and coherent manner, combining the analyses of the issue in both DS procedures and comparing the pros and cons to enhanced transparency in them. The main argument of the book is, fi rstly, that transparency in these procedures should be enhanced so that they may be accountable to a wider range of stakeholders, but, secondly, that the extent and the manner of transparency might differ in these two procedures, refl ecting their structural and functional differences. The book appeals to both scholars and students interested in international economic law and international relations, as well as lawyers and government offi cials who deal with international trade and investment regulation. Junji Nakagawa is Professor of International Economic Law at the Institute of Social Science, University of Tokyo. Born in Hiroshima, Japan, in 1955, Nakagawa obtained his BA, MA and Ph.D. from the University of Tokyo. He has also taught at Tokyo Institute of Technology, City University of Hong Kong, University of Denver, Tufts University and El Colegio de México. His publications include International Harmonization of Economic Regulation (2011, Oxford University Press), Multilateralism and Regionalism in Global Economic Governance (2011, Routledge), Anti-Dumping Laws and Practices of the New Users (2007, Cameron May) and Managing Development: Globalization, Economic Restructuring and Social Policy (2006, Routledge). Transparency in International Trade and Investment Dispute Settlement Edited by Junji Nakagawa First published 2013 by Routledge 2 Park Square, Milton Park, Abingdon, Oxon, OX14 4RN Simultaneously published in the USA and Canada by Routledge 711 Third Avenue, New York, NY 10017 Routledge is an imprint of the Taylor & Francis Group, an informa business © 2013 Editorial matter and selection: Junji Nakagawa; individual chapters: the contributors The right of Junji Nakagawa to be identifi ed as the author of the editorial material, and of the authors for their individual chapters, has been asserted in accordance with sections 77 and 78 of the Copyright, Designs and Patents Act 1988. All rights reserved. No part of this book may be reprinted or reproduced or utilised in any form or by any electronic, mechanical, or other means, now known or hereafter invented, including photocopying and recording, or in any information storage or retrieval system, without permission in writing from the publishers. Trademark notice: Product or corporate names may be trademarks or registered trademarks, and are used only for identifi cation and explanation without intent to infringe. British Library Cataloguing in Publication Data A catalogue record for this book is available from the British Library Libra ry of Congress Cataloging in Publication Data Transparency in international trade and investment dispute settlement / edited by Junji Nakagawa. p. cm. Includes bibliographical references. 1. Arbitration and award, International. 2. Dispute resolution (Law) 3. Foreign trade regulation. 4. Investments, Foreign (International law) I. Nakagawa, Junji, 1955- K2400.T73 2012 382′.9—dc23 2012023856 ISBN 13: 978-0-415-52873-3 (hbk) ISBN 13: 978-0-203-07726-9 (ebk) Typeset in Times New Roman by Refi neCatch Limited, Bungay, Suffolk Contents List of contributors vi Acknowledgements vii List of abbreviations viii 1 Introduction 1 JUNJI NAKAGAWA AND DANIEL MAGRAW 2 The Ordre Public dimensions of confi dentiality and transparency in international arbitration 15 FLORENTINO P. FELICIANO 3 Transparency and the role of domestic process 30 YUKA FUKUNAGA 4 Why should there be public knowledge and understanding of East Asia’s regional trade disputes? 49 CHIN LENG LIM 5 Webcasting 84 SOFIA PLAGAKIS 6 Transparency of investment awards 119 FEDERICO ORTINO 7 International investment activities 159 PETER L. LALLAS Index 217 Contributors Florentino P. Feliciano is a Senior Counsel at the Law Offi ce of SyCip Salazar Hernancez & Gatmaitan. He was a former member of the WTO Appellate Body from 1995 to 2000, and a Justice of the Supreme Court of the Philippines from 1986 to 1995. Yuka Fukunaga is a Professor at the School of Social Sciences, Waseda University, Japan. Peter L. Lallas is the Executive Secretary of the World Bank Inspection Panel. Chin Leng Lim is Professor at the Faculty of Law at the University of Hong Kong. Daniel Magraw is the President Emeritus and Distinguished Scholar at the Center for International Environmental Law, Washington, DC. Junji Nakagawa is a Professor of International Economic Law at the Institute of Social Science, University of Tokyo. Federico Ortino is Reader in International Economic Law in the School of Law at King’s College London. Sofi a Plagakis is a Policy Analyst at the OMB Watch, Washington. She was former Program Associate at the Center for International Environmental Law. Acknowledgements This book arose from an international joint research project funded by the Japan Society for the Promotion of Science (JSPS). The three-year project, which ran from 2008 to 2010, produced a couple of intermediary results. The fi rst was the panel discussion on ‘Transparency in International Trade and Investment Dispute Settlement’ at the Society of International Economic Law Inaugural Conference in Geneva in July 2008. Nakagawa chaired the panel, and Yuka Fukunaga, Dan Magraw and Federico Ortino read their papers. Dr. Isabelle Van Damme also joined the panel and read her paper on the inherent powers of the WTO’s Appellate Body. The members of the project learned a lot from the arguments of Dr. Van Damme and those who attended the panel. The second intermediary result was the panel session on ‘Transparency in International Trade and Investment Dispute Settlement’ at the Asian Society of International Law 2nd Biennial Conference at the University of Tokyo in August 2009. Nakagawa chaired the panel, and Florentino Feliciano, Federico Ortino and Peter Lallas read their papers. The members of the project were grateful for the comments they received at the ensuing fl oor discussion, most notably from Professor Edith Brown Weiss. The results of the discussion were later refl ected in each member’s contribution to the book, though, of course, the fi nal responsibility of each contribution is owed by its author. Chin Leng Lim has been one of the most enthusiastic members of the project. Although he could not attend either of the above two panels, he and I have worked closely throughout the project. Dan Magraw kindly introduced Sofi a Plagakis as the fi nal member of the project; she has immense research and working experience on webcasting international trade and investment dispute settlement cases. I wholeheartedly appreciate these members of the project for their unfl agging enthusiasm and support to the project. Thanks are also due to Yong Ling Lam at Routledge, who has been as enthusiastic and creative as before in supporting the publication. Finally, let me express my sincere gratitude to my wife, Akimi, for her support, encouragement and affection. Like my previous publications, this book will be dedicated to her. Tokyo, June 2012 Junji Nakagawa Abbreviations AANZFTA Australia and New Zealand FTA ADR alternative means of dispute resolution AEM ASEAN Economic Ministers’ Meeting AFTA ASEAN Free Trade Area APEC Asia Pacifi c Economic Cooperation ASEAN Association of Southeast Asian Nations BIT bilateral investment treaty BRIC Brazil, Russia, India and China CEC Commission on Environmental Cooperation CIEL Center for International Environmental Law CSR Corporate Social Responsibility DDA Doha Development Agenda DR-CAFTA Dominican Republic–Central America-United States Free Trade Agreement DSB Dispute Settlement Body DSM WTO Dispute Settlement Mechanism DSS WTO Dispute Settlement System DSU WTO Understanding on Rules and Procedures Governing the Settlement of Disputes EC European Communities ECHR European Court of Human Rights EPA Economic Partnership Agreement EU European Union FAO Food and Agriculture Organization of the United Nations FDI Foreign Direct Investment FTA Free Trade Agreement GATT General Agreement on Tariffs and Trade IACHR Inter-American Commission of Human Rights IAM independent accountability mechanism IBRD International Bank for Reconstruction and Development ICA International Court of Arbitration ICC International Chamber of Commerce ICCPR International Covenant on Civil and Political Rights Abbreviations ix ICJ International Court of Justice ICSID International Centre for Settlement of Investment Disputes ICTY International Criminal Tribunal for the Former Yugoslavia IFC International Finance Corporation IFI international fi nancial institution IIA International Investment Agreement IISD International Institute for Sustainable Development ILO International Labour Organization ISO International Organization for Standardization ITLOS International Tribunal for the Law of the Sea LCIA London Court of International Arbitration MAI Multilateral Agreement on Investment MNE multinational enterprise NAAEC North American Agreement on Environmental Cooperation NAFTA North American Free Trade Agreement NCP national contact point NGO non-governmental organization ODA offi cial development assistance OECD Organisation for Economic Co-operation and Development PCA Permanent Court of Arbitration PRC People’s Republic of China RTA Regional Trade Agreement SCC Stockholm Chamber of Commerce TNC transnational corporation TOR Terms of Reference TPP Trans-Pacifi c Partnership Agreement UN United Nations UNCITRAL United Nations Commission on International Trade Law UNCTAD United Nations Conference on Trade and Development UNEP United Nations Environment Program WTO World Trade Organization