The Washington, DC-based centre is the most visible venue devoted to resolving legal disputes between foreign investors and their host countries. While other dispute resolution venues operate under more stringent confidentiality rules, ICSID gets most of the attention – both positive and negative.
In recent years, the centre has been a magnet for critics of unrestricted economic globalisation. Several Latin American governments have criticised it for having a perceived bias in favour of foreign investors, and the government of Bolivia has gone so far as to withdraw from the centre altogether.
Lawyers representing foreign investors grouse privately about the length of time it takes to perform basic tasks such as registering new cases and appointing arbitrators to hear the disputes.
Part of the blame for ICSID’s woes can be attributed to the fact that the secretary-general was long a consolation prize for the person selected to be the World Bank’s general counsel. In addition to being the bank’s top lawyer, the general counsel was supposed to oversee ICSID in his or her spare time.
That model may have worked 30 years ago, when ICSID could go a year or more without taking on a new arbitration case, but from the 1990s the centre has witnessed a boom in investor-state disputes.
With more than 125 investor-state arbitrations currently being handled by the centre – and tens of billions of dollars at stake – it is high time that ICSID had its own full-time chief. For too long, the centre stagnated under a series of political appointees. Most recently, former Spanish foreign minister Ana Palacio took the helm for a brief stint, after joining the World Bank at the behest of her political ally (and Iraq War proponent) Paul Wolfowitz.
Following Ms Palacio’s resignation last year, a public search was conducted to find her replacement.
In the coming weeks, observers expect the World Bank to announce the choice of a five-member selection committee: former government of Canada lawyer Meg Kinnear. World Bank member states are understood to be signing off on her nomination.
Ms Kinnear has had one of the more challenging jobs in the investment arbitration field: overseeing the dozen or more claims filed by unhappy foreign investors against the government of Canada. (Although the North American Free Trade Agreement has greased the wheels of trade between Canada and the US, it has also exposed Canada to more crossborder lawsuits from its litigious southern neighbour).
Ms Kinnear has spent her career in government service but her job has required that she balances the interests of government and foreign investors. On the one hand, she has fought to preserve the prerogative of government to regulate foreign investment activity so that it conforms to broader social goals (including health and environmental protection), but at the same time, she has been intimately involved in the negotiation of investment protection treaties, relied upon by Canadian businesses to protect their own overseas investments.
Observers wonder if this blend of experiences will make her the right pick for righting an institution which has endured ample criticism from investors and governments alike.
Luke Peterson is the editor of Investment Arbitration Reporter (www.iareporter.com) a legal news, analysis and intelligence service.