U.S. Investment in Vietnam and Human Rights

The governments of the United States and the Socialist Republic of Vietnam will soon launch negotiations for a treaty to protect American investment and investors in Vietnam. The proposed treaty, called a BIT for Bilateral Investment Treaty, offers a natural opportunity to include human rights provisions, but so far there is no sign that the present U.S. administration plans to do so.

The 40 BITs that the United States already has with other countries do not have any human rights provisions. A new BIT with Vietnam could change that pattern, however, if Congressional advocates of international human rights get mobilized.

According to a report adopted unanimously by the UN Human Rights Council in June, the present BIT pattern creates an “imbalance” that weakens the host government’s obligations on human rights. The report, authored by Professor John Ruggie of Harvard, states:

“Investor protections [under BITs] have expanded with little regard to States’ duties to protect [human rights], skewing the balance between the two. Consequently, host States can find it difficult to strengthen domestic social and environmental standards, including those related to human rights, without fear of foreign investor challenge, which can take place under binding international arbitration.”

A joint U.S.-SRV statement on June 25 announced the decision to initiate the BIT negotiations. Separately, it also “noted the benefit of an open and candid dialogue on issues relating to human rights.” But it said nothing about the impact that U.S. investment in Vietnam – topping $12,000,000,000 in 2007 – has on the rights of Vietnamese workers and others.

The U.S. will use its standard “model agreement” as the starting point for negotiations with Vietnam. It defines “investment” so broadly that it includes patents, copyrights, trademarks, and other forms of intellectual property rights, and lays down strong enforcement mechanisms, including access to international arbitration for the investor.

Another “model BIT” has been developed by a Canada-based NGO, the International Institute for Sustainable Development (IISD). After extensive research, IIISD found that existing BITs are “one-sided instruments” that guarantee extensive protection of of the rights of foreign investors but without any corresponding investor responsibilies. The IISD model corrects that imbalance. (See “Linking Global Rights with Responsibilities": scroll down to the next-to-last item.)

Congressional concerns about this issue is reflected in the Trade Reform, Accountability, Development, and Employment Act, introduced on June 4. Among its provisions is that BIT protections of investor rights could no longer override a country’s efforts to protect the rights of its own workers.

It is probably too late to enact that bill into law, but it’s not too late to hold hearings on the proposed U.S. Bilateral Investment Treaty with Vietnam. Up till now, Congress has rubber-stamped BIT after BIT without drawing any public attention. It’s time to let the sunshine in.

Both Senators Obama and Clinton have pledged to review the labor provisions of trade agreements under a Democratic administration. They don't have to wait that long. They can insist that the Senate review the proposed BIT with Vietnam for its impact on the human rights of Vietnam's workers.

So one big question is: Will Congress rubberstamp the U.S.-Vietnam BIT without studying how it impacts the rights of Vietnam's working men and women? Another is: Will it rubberstamp that BIT without studying how facilitating more investments to Vietnam will facilitate the transfer of American jobs to the Socialist Republic of Vietnam?

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