And here's the final non-discrimination post of the day. U.S. company Renco Group, on its own behalf and on behalf of its affiliate Doe Run Peru (DRP), has brought an investor-state claim against Peru under the U.S.-Peru Trade Promotion Agreement. The Notice of Intent to Commence Arbitration is here, and this is the National Treatment claim:
2. Peru's Pattern of Treating DRP Less Favorably than it Treats Centromin/Activos Mineros Violates Article 10.3 of the Treaty.
54. Peru's unfair treatment of DRP is in direct contrast to its treatment of Centromin, a company owned by Peru, in violation of Article 10.3 of the Treaty. As described above, DRP went through an extensive request process for each of the PAMA extensions that it received. This process included conducting detailed studies, submitting the reports of the studies to the Ministry of Energy and Mines, providing the public with notice and conducting public hearings. With respect to the first of the extensions that Peru begrudgingly granted, Peru imposed upon DRP obligations to complete more projects and to satisfy additional environmental standards. Peru also subjected DRP to continuous daily inspections by an inspector living in La Oroya. With respect to the second extension that Peru granted, Peru subjected DRP to financial conditions so onerous that DRP could not possibly complete its last remaining PAMA project.
55. Meanwhile, Centromin requested a PAMA modification in 2000 that included an extension of its time to complete its PAMA projects. Centromin did not even notify DRP. DRP had no opportunity to object or participate in the process. Peru did not require Centromin to conduct any studies or submit any reports or notify the public or conduct public hearings. Peru granted Centromin's request for a PAMA modification without imposing any additional obligations or more stringent environmental standards on Centromin.
56. Moreover, while Peru subjected DRP to rigorous inspections, Peru seemingly imposed little quality control over Centromin. For example, one of Centromin's PAMA projects was the abandonment of the arsenic trioxide deposit that Centromin used during its operations of the Complex. While Centromin claims to have completed this project and Peru seems to be satisfied that this project is complete, studies completed by DRP indicate that the deposit still leaks substantial amounts of arsenic into the river. In addition, even though its PAMA was modified to extend its deadline to remediate the soil in and around La Oroya until 2010, Centromin has yet to make any substantial progress toward completing this project.
Here is Article 10.3:
Article 10.3: National Treatment
1. Each Party shall accord to investors of another Party treatment no less favorable than that it accords, in like circumstances, to its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments in its territory.
2. Each Party shall accord to covered investments treatment no less favorable than that it accords, in like circumstances, to investments in its territory of its own investors with respect to the establishment, acquisition, expansion, management, conduct, operation, and sale or other disposition of investments.
3. The treatment to be accorded by a Party under paragraphs 1 and 2 means, with respect to a regional level of government, treatment no less favorable than the most favorable treatment accorded, in like circumstances, by that regional level of government to investors, and to investments of investors, of the Party of which it forms a part.
So for Renco, as stated in the Notice of Intent, all that matters for its National Treatment claim is the treatment it received in comparison to that of Peruvian company Centromin. In other words, it appears to take an individual investor/best treatment approach, although if these are the only two investors in the industry, perhaps in effect they also constitute the relevant foreign and domestic "groups."
