Are Historic Fishing Rights protected under Bilateral Investment Treaties?
A practical example of Customary International Law in International Investment Law
Published on ICAR ON 22 December 2020
This analysis addresses historic fishing rights (HFRs) in the context of investment arbitrations. Firstly, it provides for a definition of HFRs. Secondly, it assesses whether that definition may fit within the definition of qualified investments under Bilateral Investment Treaties (BITs), and, accordingly, whether HFRs may be protected under BITs. Finally, it presents a potentially double investment arbitration case for the protection of this special set of rights.
What are historic fishing rights?
HFRs are special customary-based, non-exclusively exercised and privately acquired rights that have come into existence by virtue of the longstanding and unobstructed practice of individuals and their local communities who have pursued their livelihoods by fishing in a certain area.
They are customary rights because they are not established by any international agreement (they may be acknowledged by an international agreement, though), nor are they granted by the coastal State. They are established instead by the custom of fishermen of a given nation exercising over a considerable period of time their right of freedom of fisheries either on the high seas or in a maritime area regarded as a res communis – common to all – or considered as a condominium (a joint ownership) of the adjacent littoral communities. Hence, such custom used to be unobstructed by the coastal State or States concerned. They are special rights because they would not normally arise under general rules of international law, if it wasn’t for the underlying historical circumstances.
They are non-exclusively exercised because they allow for the continuation of a shared and traditionally open access regime for the enjoyment of the fisheries resources. They constitute effectively an international servitude short of territorial sovereignty, according to which the servient State is subjected to the permanent use of the dominant State for a certain purpose. As such, the dominant State cannot rely on HFRs for the purpose of maritime boundary delimitation, also because the State is not the holder of these rights. Instead, they are vested rights of the inter-generational functional group of individuals involved in the fisheries activities. Such rights only indirectly accrued in favour of the State or States whose nationals currently hold these rights thanks to their forebears who have exercised them for a long period of time. Consequently, such privately acquired rights are akin to private property. The crystallization process of HFRs into property rights is a lengthy process that takes place over different generations rooted in local fishing communities who depend for their livelihood on the resources of the sea. Accordingly, such rights have a well-defined localized character.
A further characterization of these rights is that they are geographically-defined by the portion of the sea where they have been practiced. Therefore, these customary rights are unaffected by the maritime zones subsequently established domestically by coastal States’ legislations or conventionally set at the international level by the United Nations Convention on the Law of the Sea (UNCLOS).
The UNCLOS itself does not expressly address HFRs and there is no evidence that its drafters wished to terminate such rights, which form part of the “other rules of international law” that the UNCLOS Contracting States still have to abide by. Caselaw, such as Eritrea v. Yemen, confirms that these rights continue to exist regardless of the maritime zones established by the UNCLOS, both within and beyond the territorial sea or the Exclusive Economic Zone (EEZ) of coastal States.
Do HFRs meet BITs’ usual investments definition?
One of the main functions of BITs is the protection of nationals’ investments abroad against political risks. In order to benefit from this protection in a foreign country, such private investments need to qualify as investments under the applicable BIT, meaning they need to meet the definition of foreign protected investments provided therein. Such definition may vary from BIT to BIT; however, it is usually an open-ended definition, often, clarified by a non-exhaustive list of examples of what can be regarded as a qualified investment in the host-State. Foreign investors’ right to property for the purpose of economic activities as well as their right to natural resources accruing by law are virtually omnipresent in any BIT’s non-exhaustive list.
To the extent that HFRs are private rights – similar to property rights – owned by foreign nationals to carry out economic activities in the host-State (i.e., the exploitation of fisheries resources in the coastal-State for the livelihoods of their right-holders), such rights qualify as foreign protected investment under BITs.
Being similar to property rights, HFRs might be susceptible of being expropriated by the coastal/host-State. Tribunals in State-to-State disputes grappling with these special rights – e.g., South China Sea Arbitration – have emphasized that they deserve a particular protection in international law given their fragility. As the expropriation of property rights by the host-State calls for appropriate compensation, the exercise of foreign nationals’ HFRs cannot be frustrated by the coastal-State without reparation.
Should foreign nationals be hindered in the exercise of their HFRs by the coastal/host-State, they may rely on the investment protection provided by the relevant BIT to claim the compensation due to the expropriation of their property-like rights as well as their restoration.
Mazara del Vallo and Marsala, two Italian small coastal towns on the Strait of Sicily, have always been inextricably linked to the Mediterranean Sea to which they owe their millenary history and economic subsistence.
Originally Phoenician settlements, they have hosted important ports. Ever since their foundation, they have kept cultivating their ancient fishing custom and fish-mongering tradition as well as investing in them.
As early as the 1920’s, the individuals inhabiting these communities motorized their fishing boats and applied mechanical power to their fishing gears. Thus, over a century, the motorization of their boats became part of their consolidated fishing tradition and led to a flourishing fisheries-based economy. So much so that at the end of the 20th century, Mazara was home to the oldest and largest fishing fleet in the Mediterranean catching the famous red prawn nicknamed after the Sicilian town itself.
The beneficial effects of this fisheries-based economy have been spread and shared by these two Sicilian communities with their littoral neighbours – chiefly, Tunisia and Libya – throughout the formation of partnerships and joint-ventures in the fishing sector. This cooperation has been possible thanks to the common and traditional understanding of the openness of the fishing grounds located in international waters to all fishermen of the littoral communities. Indeed, Sicilian fishermen have been accustomed to exercise their freedom of the high seas by catching in that body of waters of the Mediterranean considered as international waters by the locals.
However, over the recent years, at a steadily increasing alarming rate, Sicilian fishing boats and their crews – while exercising their freedom of fishing on the high seas – have been repeatedly subjected to firearms attacks, seizures, kidnappings, and ransom requests by the navies of northern African countries (especially, Tunisia and Libya). These measures – directly attributable to the coastal States concerned – are de facto expropriating the local communities of Mazara and Marsala of their HFRs. To these days there have been overall more than 300 arrests of Sicilian fishermen, 27 wounded, 3 killed, 150 seizures of fishing boats, and the payment of hundreds of thousands of euros to set them free. It has been estimated that the damages caused by such actions to the local fishing sector amount to over 100 million euros. Reportedly, this sector has plummeted by 40% because of the conducts of the adjacent African countries, who are implementing a series of measures – tainted with excessive use of force – equivalent to expropriation in relation to the Sicilian fishermen’s HFRs.
In 2005 and 2009, respectively, Tunisia and Libya declared an EEZ engulfing the portion of the Mediterranean where Sicilians have been fishing for centuries. Such EEZs may be in conformity with international law only if they do not interfere with pre-existing HFRs, as these customary rights still prevail regardless of whatever maritime zone may be unilaterally proclaimed.
Fishermen from Mazara and Marsala may initiate a double investment arbitration against Tunisia and Libya, based on Italy’s BITs with these two countries. Sicilian fishermen may claim the damages suffered so far (over 100 million euros) for the expropriation of their HFRs and the restoration of the same. The circumstance that Sicilian fishing boats have been recurrently attacked or seized on Libya’s or Tunisia’s EEZ is not an obstacle to advocate for the protection of Sicilian fishermen’s HFRs before an investment arbitral tribunal. On the contrary, the fact that such international violations occurred within an area over which Libya and Tunisia claim to exercise sovereign rights may ease the application of the relevant BITs, as BITs have a geographical scope of application dependent upon the exercise of sovereign powers. In any case, the geographical scope of application of a BIT may be stretched if the respondent State has unduly exercised de facto transboundary sovereignty. Finally, being HFRs property-like rights owned by individuals and local communities, an investor-State arbitration may be the most appropriate forum to seek redress, rather than having to resort to a State-to-State arbitration.