Dear Members of the World Investment
It is my pleasure to share with you UNCTAD's IIA Issues Note entitled
“Reform of Investor-State Dispute Settlement: In Search of a Roadmap”.
The Note comes out at a time when the number of new claims reached a new
peak, and the debate about the pros and cons of the investor-State dispute
settlement (ISDS) mechanism has been gaining momentum. This is especially
true in countries and regions where ISDS is on the negotiating agenda and
where countries face controversial investor claims.
ISDS is included in the majority of today's 3,000 plus international investment
agreements (IIAs). It grants foreign investors the right to initiate
international arbitrations against host governments and to seek monetary
compensation for losses suffered as a consequence of governmental conduct.
Over the last few years, an increasing number of concerns have emerged
about the current ISDS system. These relate, among others things, to a
perceived deficit of legitimacy and transparency; contradictions between
arbitral awards; difficulties in correcting erroneous arbitral decisions;
questions about the independence and impartiality of arbitrators, and concerns
relating to the cost and length of arbitral procedures.
These concerns have prompted broad-based discussions of the ISDS system’s
reform in the international investment-development community. To give shape
to this debate, the Note identifies five main reform paths:
· Promoting alternative dispute resolution;
· Tailoring the existing system through individual
· Limiting investor access to ISDS;
· Introducing an appeals facility;
· Creating a standing international investment
Each of the five reform options comes with its specific advantages and
disadvantages and responds to the main concerns in a distinctive way. Some
of the options can be implemented through actions by individual governments
while others require joint action by a larger group. The options that require
collective action would go further in addressing the existing problems,
but would also face more difficulties in implementation.The Note calls
for a multilateral policy dialogue on ISDS to search for a consensus about
the preferred course for reform and ways to put it into action.
I hope that you find our IIA
Issues Note interesting and useful.
Investment and Enterprise
Palais des Nations, Geneva
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