LatinNews Daily - 07 March 2024

*Honduras’s government led by President Xiomara Castro has denounced the World Bank (WB)’s International Center for Settlement of Investment Disputes (ICSID) as “a system that undermines the sovereignty of nations”, according to a statement from the procurator general’s office (PGR). This follows Honduras’ decision to exit the ICSID of which the WB received written notice on 24 February according to an ICSID statement. The government’s decision follows an ICSID dispute with Honduras Próspera, one of the so-called employment and economic development zones (Zedes), the legislative framework for which was revoked by the Castro government in 2022. Citing legal uncertainty over the zone, Honduras Próspera alleged that President Castro’s partial repeal of the Zede framework law was a barrier to past investments and future prospects – filing a claim against the government for US$10.8bn in damages in December 2022. In its statement, the PGR pointed to “corporate media bias, which is in favour of ceding sovereignty to transnational companies that – without any right – are demanding the state to pay them multimillion dollar sums of money”. The statement affirms Honduras’ compliance with international law – citing Article 54 of the Vienna Convention on the Law of Treaties and Article 71 of the ICSID Convention – in its move “to safeguard public finances” and “correct the imbalance that favours foreign investors and harms domestic investors”. Honduras’s exit from the ICSID will take effect six months after the receipt of the written notice, falling on 25 August 2024, according to the ICSID statement.