Attack on ICSID is an Attack on the Rule of Law

March 23, 2024

The Republic of Honduras has taken steps to denounce the ICSID Convention, a multilateral treaty rooted in the post-World War II efforts by the United States and its allies to establish an international order based on the Rule of Law.

The ICSID Convention established the International Centre for Settlement of Investment Disputes (ICSID), which is the leading international institution specializing in the resolution of investment disputes between foreign investors and States. For decades, States have consented to resolve their disputes at ICSID as a means of attracting foreign investment and promoting development by assuring investors a neutral forum that is not beholden to uncertain courts and political exigencies inconsistent with the Rule of Law.

In recent years, extremist governments in Bolivia, Ecuador, and Venezuela all denounced ICSID, only to face backlash from the international community; and Ecuador rejoined ICSID under a subsequent centrist government in an effort to bolster its economy.

Notably, Honduran legal scholars have united in criticizing the Honduran government’s denunciation of the ICSID Convention as being contrary to Honduran law and void. This is because it cannot have legal effect without the approval of the Honduran National Congress.  

Despite the Castro Administration’s ongoing attack on the conditions that protect and promote investment in Honduras, Honduras Próspera continues to create opportunities that further the development of Honduras and remedy the root cause leading to mass migration to the United States. Honduras Próspera’s mission is to end poverty by delivering prosperity as a business model. The basic premise involves the investment of private capital to deploy cutting-edge pro-growth, pro-job creation public policy to elevate 100%-willing communities while uplifting the country as a whole.

Last year, direct and indirect employment created by businesses operating in Próspera ZEDE reached nearly 4000 persons. If allowed to flourish, Próspera can create tens of thousands more secure,well-paying jobs for hardworking Hondurans. Not surprisingly, the majority of Hondurans have been supportive of Próspera ZEDE. This is evidenced by poll-after-poll since 2021; whereas any negative opinion represents a tiny 0.9% to 3.1% of the Honduran electorate.

For decades, the United States has been among the world’s foremost advocates for the rules-based international order so necessary for the preservation of the Rule of Law. Broad bipartisan support exists in the U.S. Congress for the Honduras Próspera mission. The truth is that, in attacking Honduras Próspera and denouncing ICSID, the Castro administration threatens to sacrifice the livelihoods of thousands of Hondurans, and repel international investors. All of this is being done in pursuit of an extremist agenda cheered-on by the People’s Republic of China, Venezuela, and Cuba.

But it is not too late to mitigate the damage being done. All the Castro Administration needs to do is follow the law, respect its undertakings, and abandon efforts to expropriate investments and deny U.S. investors their basic rights.


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