Privatisation of the Argentinean social security system: ICSID must consider that protecting human rights is a government obligation

On 30 March 2021, seven civil society organisations including GI-ESCR presented an amicus curiae before the International Centre for Settlement of Investment Disputes (ICSID) in the context of the arbitration between private company MetLife and the State of Argentina, calling for the recognition of the Argentinian State’s obligations regarding human rights and particularly the right to social security. It is the first case in which an arbitration is made in respect of a country's decision to reverse the privatisation of its pension system. The outcome may set an important precedent for other ongoing cases or for future requests for international arbitration.

The signatories of this amicus curiae brief seek to intervene as a non-disputing third party in this process, so that ICSID considers the international human rights obligations of the State, and in particular, its obligations concerning the right to social security during the arbitral proceedings. During the privatisation of the social security system, more than 12% of the pensioners, especially women, were left out and their pensions lost at least 10% of their real value.

The dispute dates back to 2008, when after 15 years of having a privatised pension system, the Argentinian Congress decided to renationalise the social security system. MetLife, one of the private pension companies that operated in the South American country until then, filed a request for arbitration against the Argentinean state demanding compensation for the termination of its pension business. The company claims that this measure violated the Bilateral Investment Treaty concluded between the United States and Argentina.

The privatisation of the Argentinean social security system occurred in 1993 in the context of the rise of neoliberal policies, promoted by the IMF and the World Bank, which led to the limitation of social, economic and cultural rights, such as the rights to education, health, and social security. Chile was a pioneer in the implementation of similar privatisation policies, and 29 other countries followed suit. The result of these privatisations schemes was disastrous. According to the International Labour Organisation, of the 30 countries that privatised their pension systems, 18 reversed it due to its poor results.

The organisations that filed this amicus curiae brief are the Centro de Estudios Legales y Sociales (CELS), the Asociación Civil por la Igualdad y la Justicia (ACIJ), the Centro de Políticas Públicas y Derechos Humanos - Perú EQUIDAD, Project on Organization, Development, Education and Research (PODER), European Center for Constitutional and Human Rights (ECCHR), Center for Economic and Social Rights (CESR) and the Global Initiative for Economic, Social and Cultural Rights (GI-ESCR).

On 15 July the tribunal decided to formally accept the amicus curiae in the dispute settlement process. However, it ordered the orgnizations to edit several paragraphs related to the social security reform process in Argentina and to restrict the focus of the amicus curiae on the issue: ‘how International Human Rights Law and International Investment Law are related and the interests at stake may be balanced as well as the threshold issue of why the Tribunal should deliberate on matters external to the terms of the BIT.’ The tribual also requested a full list of authorities as refrence.