Since 2008, Argentina’s pension scheme has been in state hands – as it should remain. Social security is a human right that governments must guarantee, and cannot be secondary to corporate profit.
Yet, in 2017, the US company MetLife sued the Argentine government at the World Bank’s International Centre for the Settlement of Investment Disputes (ICSID). It argues that the state’s pension scheme violates the company’s rights as a private insurer. In response, ECCHR and Argentine partner organizations submitted an amicus curiae brief to point out Argentina’s human rights obligation to guarantee social security for its citizens, which can only be done through a public pension system.
In 1993, Argentina’s pension scheme was privatized. The consequences were catastrophic. The country experienced old-age poverty, social division, and high private and public debts. Therefore, Argentina decided to renationalize pension insurance in 2008. However, MetLife believes it is disadvantaged and demands compensation for its alleged lost profit.
But privatizing human rights is problematic because it outsources states’ obligation to protect their citizens to companies driven by profit demands. For example, the ICSID has already dealt with several cases of renationalizing water supplies after private schemes could not guarantee access to water for all. Regarding the right to social security, the United Nations highlighted that states have a fundamental responsibility to ensure that private actors do not jeopardize access to social security.
The proceedings initiated by MetLife before the ICSID are the first of their kind regarding the privatization of pensions. The case relies on a bilateral investment agreement between the US and Argentina. The exact demands of MetLife’s lawsuit are not yet public. However, in the past, states have often lost cases before the arbitration tribunal, and were obliged to pay millions to compensate companies. As a result, the body fails to protect human rights – in many cases, it acts on behalf of powerful companies.
ECCHR also supports other cases before the ICSID. We advocate for the rights of those affected by bilateral investment projects, such as residents of a gold mine in Romania, and the land rights of indigenous people in Zimbabwe.