The Union of South American Nations (Unión de Naciones Suramericanas) (”UNASUR”) has held additional gatherings and proposed that it should serve as a mechanism for resolving energy disputes involving Member States.

In December 2004, twelve South American states created the “South American Community” through the signing of the Cuzco Declaration. Nearly four years later, in May 2008, representatives of those countries met in Brasilia, Brazil to execute the Constitutive Treaty (the “Treaty”) of UNASUR. The goal of UNASUR is to expand and build upon smaller regional organizations such as the Common Market of the South (Mercado Común del Sur) (“Mercosur”) and the Andean Community (Comunidad Andina). In this respect, UNASUR encompasses the entirety of the South American continent with the exception of French Guiana—including the nations of Argentina, Bolivia, Brazil, Chile, Colombia, Ecuador, Guyana, Paraguay, Peru, Suriname, Uruguay and Venezuela.

Article 19 of the UNASUR Treaty establishes that it will enter into force 30 days following the deposit of the ninth instrument of ratification. For Member States that ratify the Treaty after the ninth instrument of ratification, it will enter into force 30 days after the deposit date of that instrument of ratification. The legislative measures emanating from the organs of UNASUR will be binding on the Member States once they have been incorporated into each Member State’s domestic law, according to its respective internal procedures. To date, Bolivia and Ecuador have ratified UNASUR.

With respect to UNASUR’s structure, Article I of the Treaty contemplates “an entity with international juridical character,” comprised of the following bodies: (i) the Council of Heads of State and Government; (ii) the Council of Ministers of Foreign Affairs; (iii) the Council of Delegates; and (iv) the General Secretariat. UNASUR’s General Secretariat is permanently headquartered in the city of Quito, Ecuador, while a separate legislative body—the South American Parliament—is to be established in the city of Cochabamba, Bolivia. The organization is further overseen by a Presidency pro tempore, which will rotate among the member states on an annual basis.

Article 2 of the UNASUR Treaty describes its task as “build[ing], in a participatory and consensual manner, an integration and union among its peoples in the cultural, social, economic and political fields.” In this regard, UNASUR has established a number of top priorities, including: the promotion of physical integration, social cohesion and political dialogue; the creation of symmetries among member states; developments in the areas of the environment and telecommunications; and energy integration.

In the area of dispute resolution, Article 21 of the UNASUR Treaty provides only for the resolution of disputes among Member States relating to the interpretation and implementation of the Treaty itself. As such, the UNASUR Treaty does not itself provide a framework for resolving investment disputes against Member States. Nonetheless, as described below,

UNASUR’s Member States have begun the process of exploring options for the regional resolution of investment disputes relating to the energy sector. UNASUR convened the First South American Energy Summit in April 2007 on Margarita Island, Venezuela, during which it was proposed that UNASUR itself—as a possible alternative to ICSID or other choices—should establish a mechanism for the resolution of energy disputes involving UNASUR Member States.