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Columbia FDI Perspectives

Perspectives on topical foreign direct investment issues
Editor-in-Chief: Karl P. Sauvant ([log in to unmask])
Managing Editor: Riccardo Loschi ([log in to unmask])

The Columbia FDI Perspectives are a forum for public debate. The views expressed by the authors do not reflect the opinions of CCSI or our partners and supporters.

No. 324   February 7, 2022
Any government official having experienced an investor-state dispute-settlement (ISDS) case knows the long-lasting pain it causes. Likely, many of those from developing countries also felt somewhat lost and overwhelmed by the lack of know-how. They face an on-going conundrum. In their first ISDS case, in-house lawyers realize that they lack adequate ISDS skills. External legal counsel is too expensive; but since ISDS cases are high profile, funds must somehow be found at great opportunity cost. Between cases, the dilemma continues: should developing countries spend scarce resources to develop in-house capacity for disputes that may never arise, or should external counsel be hired at great cost again?
In the debate in UNCITRAL’s Working Group III (WGIII) on ISDS reform, delegates agree on the benefits of an Advisory Centre on International Investment Law (ACIIL).[1] They include: good legal advice at reasonable cost, pre-, during and post-dispute; the training and preparation of in-house lawyers, which also helps governments in negotiating dispute-prevention mechanisms in treaties; a platform for states to exchange experience on ISDS and related matters; and the legitimacy of “branded” legal advice at reasonable cost, facilitating officials to explain to their superiors and the public the reasons for actions that need to be taken—which makes it easier for states that have lost cases to accept ISDS in future treaties. Accessibility to legal advice is the backbone of an equitable and legitimate ISDS regime.   
Despite the apparent benefits of an ACIIL, establishing it is a complex task. In the WGIII negotiations, there is a danger of lack of progress. Too little debate, and the ACIIL does not materialize. Too much debate, and the process gets bogged down at the risk of many countries losing interest. A guiding balance should be struck as soon as possible.  
Within the framework of ISDS reform options, the opportunity to establish an ACIIL is unique because it can be done independently from taking other decisions. With a little political will, acceptance and compromise, the ACIIL could start functioning relatively soon, perhaps in two-to-three years. It could begin modest and grow at a later stage.
For the ACIIL to start, WGIII should address the following issues: 
  • Scope of services. The services provided must be limited at first: fewer services, fewer complications. The ACIIL can give advice (both pre-dispute and their early stages); represent countries in a limited number of ISDS cases; train government officials; and act as a platform for its developed and developing country members to exchange experience. It can provide access to external counsel for litigation services that it cannot deliver with its limited resources, on the basis of a roster of counsel prepared to work for the ACIIL at preferential rates.
  • Beneficiaries. Developing countries—especially the least developed countries—should be the first beneficiaries. Providing services to SMEs—which are often also under-resourced—should be dealt with separately, as this would otherwise give rise to complications and conflicts-of-interest issues for the ACIIL. Discussions of this matter should be left to a later stage. 
  • Possible legal structure and funding. Though an independent and treaty-based organization would be the ideal solution for many countries, limited services could be initially provided by attaching the ACIIL to an international organization with expertise in the investment law area. Countries in a position to do so, and foundations, could contribute to the project, complemented by a tiered-fees arrangement based on the income of each country, similar to that of the WTO’s Advisory Centre on WTO Law
Once in operation, states can decide if the Centre should be scaled up.
The EU has proposed an ACIIL as part of a comprehensive ISDS reform package, including a new Multilateral Investment Court (MIC). This approach, however, faces a controversial debate. Combining the MIC and the ACIIL over-complicates the process and denies the long-awaited benefits of an ACIIL to many developing countries. It would therefore be undesirable to make the ACIIL’s establishment dependent on any other actions. Recent progress on the Code of Conduct shows that WGIII can prioritize issues if it so chooses. Progress on an ACIIL will facilitate timely access to affordable legal advice, strengthen the legitimacy of the international investment regime and generate good will for UNCITRAL’s WGIII negotiations. If and when the establishment of the MIC were successful, the two could be joined if states so wished.
Kick-starting a modest ACIIL now would sow the seeds for a more full-scale ACIIL in the future. Some might want to discuss this matter until a perfect way forward has been found—but, if past repeated failed attempts were to be a lesson, the perfect should not be the enemy of the good. Establishing an ACIIL now is a deliverable that can be done in short time—it is a win-win option for the international community.

* Charlie Garnjana-Goonchorn ([log in to unmask]) is Deputy Consul-General, Royal Thai Consulate-General, Sydney, and an international lawyer at the Ministry of Foreign Affairs of Thailand involved in the UNCITRAL’s WGIII negotiations. The opinion expressed in this Perspective is solely that of the author and does not reflect the position of the Royal Thai Government. The author wishes to thank Abdou El Azizi, Meg Kinnear and two anonymous reviewers for their helpful peer reviews.
[1] For a full discussion, including on issues such as funding, see, Karl P. Sauvant, “An Advisory Centre on International Investment Law: Key features”, University of St. Thomas Law Journal, vol. 17 (April 2021), pp. 354-372. 
The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “Charlie Garnjana-Goonchorn, ‘An Advisory Centre on International Investment Law: Is perfect the enemy of good?,’ Columbia FDI Perspectives No. 324, February 7, 2022. Reprinted with permission from the Columbia Center on Sustainable Investment (” A copy should kindly be sent to the Columbia Center on Sustainable Investment at [log in to unmask].
For further information, including information regarding submission to the Perspectives, please contact: Columbia Center on Sustainable Investment, Riccardo Loschi, [log in to unmask]; Luca Jobbagy, [log in to unmask].
Most recent Columbia FDI Perspectives   
  • No. 323, Julien Chaisse, “FDI and sustainable development in the EU-China investment treaty: Neither high nor low, just realistic expectations,” Columbia FDI Perspectives, January 24, 2022
  • No. 322, Mohammad Saeed, “Implementing an Investment Facilitation Framework for Development: Lessons from the Trade Facilitation Agreement,” Columbia FDI Perspectives, January 10, 2022
  • No 321, Peter Muchlinski, “Promoting responsible business through the revised ILO Tripartite Declaration,” Columbia FDI Perspectives, December 27, 2021
All previous FDI Perspectives are available at

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Karl P. Sauvant, Ph.D.
Resident Senior Fellow
Columbia Center on Sustainable Investment
Columbia Law School - Earth Institute
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Karl P. Sauvant, PhD

Resident Senior Fellow

Columbia Center on Sustainable Investment
Columbia Law School - The Earth Institute, Columbia University
435 West 116th St., Rm. JGH 825, New York, NY 10027
p(212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask] | t: @CCSI_Columbia

"What foreign investors want: Findings from an investor survey", "Incentivising Sustainable FDI", "Leveraging Digital FDI for Capacity and Competitiveness", "Green FDI: Encouraging carbon-neutral investment", "Facilitating Sustainable Investment to Build Back Better", "Extending International Legal Aid from Trade to Investment: An Advisory Centre on International Investment Law", "Increasing Transparency in Investment Facilitation: Focussed Support is Needed", Investment Facilitation for Development: A Toolkit for Policymakers, "More Attention to Policies! Improving the Distribution of FDI Benefits. The Need for Policy-oriented Research, Advice and Advocacy", "More and Better Investment Now!", "Facilitating Sustainable FDI in a WTO Investment Facilitation Framework: Four Concrete Proposals", "Multinational Enterprises and the Global Investment Regime: Toward Balancing Rights and Responsibilities”, "An Inventory of Concrete Measures to Facilitate the Flow of Sustainable FDI: What? Why? How?", are available at .

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