(CARICOM Secretariat, Turkeyen, Greater Georgetown, Guyana) Secretary-General of the Caribbean Community (CARICOM) Ambassador Irwin LaRocque had fruitful discussions with United States Secretary of State Mr Michael Pompeo at the CARICOM Secretariat Headquarters, Turkeyen, Guyana on Friday 18 September.
The discussions included exchanges on the Covid-19 Pandemic and the severe economic fall-out being experienced by CARICOM Member States, the renewal of the Caribbean Basin Trade and Partnership Act (CBPTA), the de-risking of regional banks by US financial institutions and co-operation under the Caribbean Basin Security Initiative (CBSI).
The Secretary-General took the opportunity to thank Mr Pompeo for the response by him and US Treasury Secretary Mr Steve Mnuchin to the issues raised in a letter to them by the then Chair of the Community, the Honourable Mia Mottley, Prime Minister of Barbados earlier this year. The Community sought US support for initiatives to assist in combatting among other things, the economic fall-out from the pandemic.
Ambassador LaRocque emphasised the need for CARICOM Member States to have access to concessional development financing which is denied to them due to the criteria applied of GDP per capita and the classification of Member States as middle income in that context. This access, he noted, was critical as the Region sought to emerge from the grave economic crisis brought on by Covid-19 as well as to build resilience to natural disasters.
The preceding is a press release from the Caricom Secretariat.
All Caribbean countries have signed at least one treaty containing provisions meant to reciprocally protect, promote and liberalise the flow of investments between themselves and their treaty partner(s). Unfortunately, the vast majority of our countries’ international investment agreements (IIAs) are older generation bilateral investment treaties (BITs) which lack many of the development-friendly language and best practices of newer vintage IIAs. The end result is that Caribbean countries could potentially face significant legal exposure to claims brought by investors under these treaties.
Although most Caribbean countries’ experience thus far with investor claims have been contract-based and not treaty-based, the threat for treaty-based claims looms larger now in the midst of the novel coronavirus (COVID-19) pandemic. This is because Caribbean governments, like those governments around the world, have had to take measures to contain and mitigate the spread of the virus, and may face claims from foreign investors who feel aggrieved by these measures and seek legal protection under these BITs.
This article argues that the time is long overdue for Caribbean countries to re-evaluate whether their BITs remain ‘fit for purpose’ and to take proactive steps to mitigate the risk for investor disputes post COVID-19.
CARICOM Investment treaty landscape
CARICOM countries are party to a spaghetti bowl of IIAs. Some are investment chapters in free trade agreements, such as the CARIFORUM-EU Economic Partnership Agreement. However, the majority are the 83 BITs signed by individual Caribbean governments with external treaty partners, many dating back to the 1980-1990s. Of these BITS, 56 are currently in force according to data from UNCTAD’s IIA Navigator.
Although the effectiveness of IIAs at attracting foreign direct investment (FDI) inflows remains debated in the academic literature, countries sign these agreements in order to increase their attractiveness to foreign investors. Signing IIAs shows their commitment to guaranteeing investors and their investments certain minimum standards of treatment, as well as protection from heavy-handed State action, such as, for example, direct or indirect expropriation of investors’ investment(s) without compensation.
Another feature of IIAs is the inclusion of Investor-State Dispute Settlement (ISDS), allowing investors to by-pass domestic courts and bring a claim against a host State before a neutral and independent arbitration tribunal, either ad hoc or established under the rules of an established arbitration centre, such as the International Centre for Settlement of Investment Disputes (ICSID).
Though popular back in the 1980s-90s, in recent years, however, the legitimacy of ISDS internationally has been increasingly questioned for many reasons. Firstly, arbitral tribunals have been criticized for their generous interpretation of vaguely drafted provisions, such as the Fair and Equitable Treatment (FET) standard, in favour of investors. Secondly, in many cases, tribunals have arrived at different decisions on the same facts. Thirdly, there is concern about the lack of geographic and other diversity of persons who serve as arbitrators on these panels. Fourth, there is the potential of using Most Favoured Nation (MFN) clauses for treaty shopping.
A study I conducted a few years shows that there is no consistency in Caribbean countries’ BIT practice, which is reflective of our unequal bargaining power as rule-takers. Moreover, because of their vintage, our older BITs lack the best practices in development, such as more express provisions for the State’s right to regulate in the public’s interest, development exceptions and provisions on investor obligations.
There are, of course, defences that States can make to investor claims, but many of these older BITs have very broadly drafted protections and lack the exceptions or defences newer BITs have included permitting the State to take action in the interest of public health. Failing this, States would have to rely on other defences under international law, such as necessity.
ISDS and Caribbean countries
Caribbean countries have had some experience with claims brought by foreign investors. Although the majority of these claims have been contract-based, one of the most well-known examples of a Caribbean country which was on the losing end of an investor dispute under a treaty-based claim was that of the Dunkeld International Investment Ltd. V Government of Belize. Following Belize’s compulsory acquisition of certain shares in Belize Telemedia Company, in which Dunkeld held an interest, Dunkeld brought a claim against the Government of Belize under the Belize-UK BIT. Belize was ordered by the arbitral tribunal to pay millions of dollars in compensation.
In an excellent article from April 2020, the International Institute for Sustainable Development (IISD) raised the alarm about a possible deluge in investor claims post-COVID-19 and called for a ‘global, coordinated response’ to this risk. This fear and call to action are not unfounded as in the aftermath of the Global Financial Crisis, Argentina faced a litany of investor claims. The stakes are even higher for small States like ours. Defending investor claims is costly and the award amounts, if on the losing end, can be in the millions or billions of dollars, a cost which cash-strapped Caribbean governments, whose economies have been severely impacted by months of shutdowns and border closures, can ill-afford to pay. There is also the potential for reputational damage for those countries involved in investor disputes, which could affect their investment attractiveness.
How can we get around this?
Even prior to the COVID-19 pandemic, a growing number of countries around the world have already either suspended or completely overhauled their BITs to limit their legal exposure to investor claims under these treaties. For example, a couple years ago India unilaterally terminated its BITs with over 50 treaty partners, including Trinidad & Tobago, and South Africa terminated BITs with several EU countries. More recently, in May 2020, 23 EU countries signed an agreement to terminate all intra-EU BITs.
The CARICOM Secretariat has for many years been working on a Draft CARICOM Investment Code, as well as a template Member States could use for investment agreements with third country partners, incorporating many of the most recent investment treaty best practices. However, to my knowledge, there has not been a systematic review by individual CARICOM countries of their BITs and whether they are indeed ‘fit for purpose’, that is, drafted in a way that promotes investment for sustainable development. Moreover, current economic exigencies may make such a comprehensive evaluation of our BITs low down on the policy totem pole for Caribbean countries.
Despite this, Caribbean governments should support calls for a multilateral solution to prevent what many anticipate could be a slew of investor claims arising from governments’ COVID-19 measures. However, there are interim mitigating measures they can take, such as deciding with their treaty partners to issue interpretive notes for some of the most used (and abused) provisions by investors or carving out COVID-19 related measures from the application of ISDS.
On a final note, Caribbean governments need to be more actively involved in efforts to ensure investment rule-making actually creates an environment conducive to attracting investment for sustainable and inclusive development. We must move from simply being ‘rule-takers’ to part of the ‘rule-makers’. As such, our governments should, for example, consider taking an active part in the UNCITRAL Working Group III on ISDS reform.
Alicia Nicholls, B.Sc., M.Sc., LL.B is an international trade and development specialist. Read more of her commentaries here or follow her on Twitter @licylaw. All views expressed herein are her personal views and do not necessarily reflect the views of any institution or entity with which she may from time to time be affiliated.
(CARICOM Secretariat, Turkeyen, Greater Georgetown, Guyana) Caribbean Community (CARICOM) Heads of Government will hold a special conference on Friday, July 3, which will see Barbados Prime Minister Mia Amor Mottley handing over the six-month CARICOM Chairmanship to Prime Minister Dr. Ralph Gonsalves of St. Vincent and the Grenadines.
This Twentieth Special Meeting of CARICOM Heads will be held via video conference beginning at 10:00 a.m. Eastern Caribbean time.
The handing over segment of the meeting will be Live-streamed on the CARICOM Secretariat’s Face Book page – https://www.facebook.com/caricom.org
Remarks will be delivered by CARICOM Secretary-General Ambassador Irwin LaRocque, and Prime Ministers Mottley and Gonsalves.
The Caribbean Community has 15 Member States – Antigua and Barbuda, The Bahamas, Barbados, Belize, Dominica, Guyana, Grenada, Haiti, Jamaica, Montserrat, St. Kitts and Nevis, Saint Lucia, St. Vincent and the Grenadines, Suriname and Trinidad and Tobago, and five Associate Members – Anguilla, Bermuda, British Virgin Islands, Cayman Islands, and the Turks and Caicos Islands.
The preceding was a press release from the CARICOM Secretariat.
In the context of Small Island Developing States (SIDS) such as Caribbean countries, historically, the agriculture sector provided the single most important platform for employment, income generation and food security, and is presently still capable of driving poverty reduction especially in rural areas; through increased productivity, value addition and links to other sectors inclusive of tourism.[1]
‘Agriculture Employment’ or ‘Agriculture Labour’ in its traditional view has been defined as the ‘involvement of any person in connection with cultivating the soil, or with raising, harvesting any agricultural or horticultural commodity, management of livestock, bees, poultry’[2] etc. In today’s world, cognisant of advancement in cultivation and harvesting technologies, processing innovations and the proliferation of the Internet of Things, Artificial Intelligence and Big Data and the consequent impact on the agriculture sector, it is prudent to recognise that a modern and more accurate definition of agriculture labour should include professional careers along the entire agri-food value chain, covering disciplines ranging from scientist, greenhouse growing specialist, agronomist, inter alia.
Current Agriculture Challenges
CARICOM’s agriculture is at a critical juncture to meet the food demands and nutritional requirements of the Region, influenced by the countless incidences of agricultural output shocks emanating from climate change impacts, natural disasters, prevalence of pest and diseases, increasing food loss and food waste and increased competition for arable lands by other sectors including housing. Food systems reorientation including the supply of agriculture labour is therefore mandatory in repositioning CARICOMs agriculture in its quest to achieve improved food security.
‘In 2000, the CARICOM Region had an agri-food trade surplus of US $20 million or 2%. Over the last eighteen years, the regional agri-food landscape has undergone significant transformation having agri-food imports of US $3.7 billion (2018) and an annual agri-food trade deficit of just above US $2.2 billion[3].
Between the periods 2016 to 2018, CARICOM’s total agriculture export growth in value was significantly immaterial when compared to its imports of over US$200 million for the same period (figure 1). CARICOM’s protracted trade deficit places pressure on fiscal positions of Member States and other macro-economic indicators including the ability of the Region to address its high level of unemployment especially among the youthful population and the growing health and economic cost visited to the region by the coronavirus pandemic (COVID-19).
Figure 1 – Total Agriculture Trade
Source: Author’s compilation
In this regard, the improved recognition of agriculture labour within the Caribbean Community, can directly strengthen the Region’s food security and nutritional adequacy while it is also aptly positioned to: catalyse greater intra-regional travel; reduce community wide unemployment; and improve the cultural and overall regional integration process. Early harvest evidence of the regional agriculture integration process is noticeable with the agreement struck between Suriname and Barbados for the Black Belly Sheep project[4].
International Market for Caribbean Agricultural Workers
Globally, there appears to be a snowballing call for agriculture workers with heightened demand in the United States, Canada, United Kingdom and other parts of Europe. Evidence of the demand for agriculture workers was confirmed through an article where the suggestion was made for British nationals who have been furloughed to get involved in harvesting crops[5].
The integration of the Caribbean into the world economy was noted to have commenced during the colonial era when the production of agricultural commodities required the exportation of labour from the metropole (mainly English working class) to the colony, to work on plantations to produce predominantly cash crops and other raw materials for export. The sugar revolution which ensued, resulted in the mass importation of African slaves to work on plantations. Following the abolition of slavery and prevailing foreign domination of the ownership of capital and other factors of production except labour, created an excess supply of semi and unskilled labour, which, if left un-utilised could have created instability and major upheavals in the colonies.
The Region therefore began exporting labour en masse, with the exodus of migrant workers heading to the Panama Canal, the gold fields of Venezuela, banana plantations in Central America and the H-2 Programme of the United States.
More recently, the Commonwealth Caribbean Agricultural Workers Program (CCAWP) in Canada, that hires approximately 25,000 foreign agriculture labourer spread over 200 farms as part of a US$100 billion industry[6], has become the temporary worker programme of choice for Caribbean Agriculture Workers. The CCAWP has been placed centre stage in the Region, receiving greater prominence as global supply chains faced disruption, and the stability of food supplies threatened by ‘stay at home’ orders imposed by countries to address the threat posed by COVID-19 became acute.
Whilst Mexico and Central America dominate the US H-2A Program[7], a number of CARICOM Member States from Jamaica (the first country to engage in the migration programme in 1966) in the north to Trinidad and Tobago in the south are participants in the CCAWP. These economies benefit from salaries repatriated by the emigrant workers.
Revised Treaty of Chaguaramas and Free Movement of Labour
Article 45 – Movement of Community Nationals provides the basis in Treaty where ‘Member States commit themselves to the goal of free movement of their nationals within the Community’.
Furthermore, in Article 46, Member States have agreed, and undertake as a first step towards achieving the goal set out in Article 45, to accord to the following categories of Community nationals the right to seek employment in their jurisdictions: university graduates, media workers, sportspersons, artistes and musicians.
Having regard to the above, and the huge vulnerability to Regional food security and nutritional adequacy, high levels of unemployment, inter alia, on the occasion of the 18th Special Meeting of the Conference of Heads of Government (HOG) of CARICOM[8], HOG have agreed to include ‘Agricultural Workers among the categories of skilled nationals who are entitled to move freely and seek employment within the Community’.
This declaration by Heads of Government provided the legal basis for the creation of the necessary infrastructure, administrative and enabling environment for the Region to benefit from the vast pool of skilled, semi-skilled and unskilled labour available for the competitive development of its agri-food sector.
At present, it is not yet clear whether or not the free movement regime for Agriculture Labour has become operational and if in the affirmative, the number of people who have already taken advantage of the Treaty’s provision.
The discussion on creating a regional bread basket and having persons who are in the industry travel to provide the majority of the farm workers holds promise. The CARICOM Private Sector Organisation (CPSO), in a presentation to HOG in February 2020, articulated the benefits of the Region in focussing on the development of regional ‘agri-food corridors’ (RAC) within the CSME, and the ability of RACs to assist in reducing transactions, transport and logistics costs. The presentation further suggested that the RACs can support overriding non-tariff barriers (NTB), and can also be used to develop ‘clusters’ or investment poles that create the business to business and business to customer linkages, which is the oxygen for sustained growth and development of agri-food ventures in the CSME, ultimately yielding greater employment.
A key feature of the RAC is premised on high volume production of selective agri-food products (corn, soy, cassava, livestock) to benefit from economies of scale. Such a philosophy will naturally lend itself to countries with larger land masses such as Belize, Guyana, Haiti, Jamaica and Suriname. CARICOM nationals from other Member States can then ultimately travel to these countries as an initial pilot to operationalise the Free Movement Regime for Agricultural workers.
Conclusion
There is no denying that the current image of regional agriculture is one that is cloaked with the stigma of being pro-poor and dominated by the uneducated or citizens who are generally on the margins of society. Drawing from the parallels of the CCWAP, repositioning regional agriculture can provide the citizens of the region with improved consistency of income that can be similarly repatriated to their home states to meet the needs of their families.
Simultaneously, other direct benefits that can be accrued can range from the increase in intra-regional travel, greater consumption of regionally produced food, increased cultural exchanges and deepening of the CARICOM spirit of ‘oneness’.
To this end, regional leaders, the private sector, development partners, and the wider NGO community should collectively agree on a roadmap to aggressively rebrand the image of agriculture to include the modern availability of high-tech jobs to encourage greater youth involvement. Only with additional sector involvement and investment will the region be able to adopt and adapt the plethora of innovative agriculture technology that supports increased productively and profitability, necessary elements for the creation of a virtuous cycle.
Sandiford Edwards, MA, MBA, ACCA is a Development Finance Specialist with experience in many countries in the Region.
[6] Budworth et al, 2017 Report on the Seasonal Agriculture Worker Program: Inter-American Institute for Cooperation on Agriculture Delegation in Canada.
Caribbean Trade Law and Development 
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