Foreign investors in Honduras enjoy “extraordinary privileges” that hinder the government’s ability to implement reforms that could benefit human rights and the environment, a report has found. These advantages allow corporations to sue the Central American country for policy changes that allegedly harm their investments using controversial investor-state dispute settlement (ISDS) mechanisms, resulting in a surge of lawsuits amounting to billions of dollars. The report from the Institute for Policy Studies, the Transnational Institute, TerraJusta and the Honduras Solidarity Network reveals that the impact of these legal disputes creates a “chilling effect,” otherwise known as a “deterrent effect,” in which the state may be discouraged from enacting public interest legislation due to the costly risk of liability under investment agreements. “The lawsuits directly undermine the government’s ability to listen to local communities and make sovereign decisions about protecting their land and resources,” Karen Spring, coordinator for the Honduras Solidarity Network and co-author of the report, told Mongabay. Honduras has faced 19 claims over the past two decades, 14 of which have occurred since 2023. The chart highlights the various sectors involved and the legal pathways investors have used to file these lawsuits. Image via ‘Corporate Assault on Honduras’ report. The ISDS provision allows private sector lawyers to determine whether countries are treating foreign investors fairly. The report says that many lawsuits in Honduras stem from companies that made questionable investments after the 2009 coup d’état, with around a third of the investments facing significant resistance from affected communities. ISDS is…This article was originally published on Mongabay
