National Security and Essential Security Interests

Contrary to the dynamic between public order and essential security interests, it is even more complicated to differentiate essential security interests from national security. The Argentine government referred to essential security interests in the Argentina-US

46 _{Case C-367/98 Commission v. Portugal, ECR [2002] I-04731, para 52.} 47_{Eglise de Scientologie,supra note 42, para 17.}

48_{Campus Oil, supra note 42, paras 32-37.} 49_{Continental Award, supra note 8, para 174.}

57 BIT. The BIT adopts the expression of essential security interests rather than national security. The preference of adopting essential security interests over national security is prevalent in IIL. For example, Article 3 of the OECD Codes of Liberalisation of Capital Movements 2013 takes the same approach.

Article 3. Public Order and Security

The provisions of this Code shall not prevent a Member from taking action which it considers necessary for:

i) the maintenance of public order or the protection of public health, morals or safety;

ii) the protection of essential security interests; or

iii) the fulfilment of its obligations relating to international peace and security. (Emphasis added)

Article 3 (Public Order and Security), in similar terms with the Argentine-US BIT, uses the term “essential security interests” rather than national security. On the contrary, Article 2.3 of the BIT between Hungary and the Russian Federation (1995) adopts the term “national security” among other emergency situations, and provides:

This Agreement shall not preclude the application of either Contracting Party of measures, necessary for the maintenance of defence, national security and public order, protection of the environment, morality and public health.50

(Emphasis added.)

This contrast then begs the question whether there is a meaningful difference between national security and essential security interests.

According to the findings in the OECD 2009 report, while the terms essential security interests and public order have frequently been incorporated in IIAs, the term “national security” has rarely appeared in IIAs.51 _{Rather, national security is more likely to be}

used in national security strategy (NSS) reports, as will be shown in Chapter 3 regarding the examination of security policies. Threats that appear in NSS reports focus mostly on terrorism, WMD, attacks by foreign countries, global pandemics,

50 _{Article 2.3 of the BIT between Hungary and the Russian Federation (1995).} 51 _{OECD, 2009, supra note 29, p. 6.}

58 natural disasters and man-made emergencies as well as energy security, failed states and organised crime in the absence of security issues pertinent to an economic crisis or foreign investment.52 This may indicate that the term national security is preferred in ‘national’ reports rather than in ‘international’ agreements.

By examining the security exception clauses of different BITs, it can be also found that essential security interests and national security do not coexist in one article. This may mean that they share the same scope of situations. Another hypothesis could be that removing ‘national’ in national security may be intended to diversify referent objects to secure such as individuals, governments and societies as well as nations. The UNCTAD in its report also poses a similar question whether the two terms cover the same circumstances or if there is any fundamental difference between them.53 It could be contended that the term essential can result in making the scope of essential security interests narrower than that of national security. However, the UNCTAD report suggests that it is not evident that Contracting Parties intended such a distinction by choosing between essential security interests and national security, and called for further clarification by arbitration tribunals.54 Yet, unless there is a situation where a state invokes both national security and essential security interests, which is highly rare – since BITs or IIAs do not incorporate the two terms in the same exception – dispute settlement bodies are less likely to distinguish the terms. Despite the difficulty in clarifying the distinction between the two terms, it can be argued that, by adding ‘essential’ to security, contracting parties may wish to safeguard their measures to protect certain interests during their emergencies with additional shields. According to the Oxford Dictionary, essential means “absolutely necessary; extremely important; fundamental or central to the nature of something.” Thus, provided that ‘essential’ security interests are at stake, a state should take measures to protect national interests which are fundamental or central to the nature of the state. As mentioned in Chapter 1, by a speech act that security agents give a label of security, a state declares that a particular issue becomes securitised, thereby legitimising extraordinary governmental measures. Likewise, a state can retain regulatory space to define what is essential by

52 _{Ibid p. 11.}

53 _{UNCTAD, ‘The Protection of National Security in IIAs’, UNCTAD Series on International}

Investment Policies for Development, New York and Geneva, UN, 2009, (UNCTADDIAE/IA/2008/5), p. 73.

59 labelling national interests as such. This can be utilised as an impregnable excuse for a state to be exempted from its international obligations as long as they meet the requirements for invocation of the exceptions. Yet, it is unclear if the addition of essential was devised out of such intention.

The distinction between national security and essential security interests is not addressed in the awards of the Argentine cases since the clause invoked provides for essential security interests and no claim for clarification of the distinction was requested. Rather, the tribunals showed a certain relationship between a necessity exception and an essential security interest exception. The next section will demonstrate how the tribunals interpreted necessity and essential security interests in the Argentina-US BIT. It will also interrogate if the emergency measures taken by the Argentine government were justifiable.