Clearing the Path: Withdrawal of Consent and Termination As Next Steps for Reforming International Investment Law
CCSI Policy Paper. April 2018
11 Pages Posted: 3 Dec 2018
Date Written: April 2018
This paper recommends that governments explore two near-term options to address the most concerning aspect of the current investment regime, investor-state dispute settlement (ISDS), alongside their longer-term work on reform of substantive treaty standards and procedural dispute settlement mechanisms. These are (1) a joint instrument on withdrawal of consent to investor-state arbitration, and/or (2) a joint instrument on termination of investment treaties.
It is important to emphasize that these steps toward coordinated withdrawal of consent to investor state arbitration and/or termination are not anti-investment, anti-investor, anti-foreigner, antiglobalization, or anti-international law. Rather, they would reflect an important conscientious effort to govern effectively and fairly, ensuring that investment treaties and their dispute settlement mechanisms achieve their desired ends, produce legitimate decisions that are respected by countries (even those that lose their cases), and do not undermine international economic cooperation and sustainable development more broadly.
To elaborate on these points, this paper first discusses the two factors driving change: mounting concerns regarding ISDS and a growing understanding of the importance of aligning investment policy with sustainable development objectives. Second, this paper briefly considers potential ISDS reform options, and advantages and disadvantages of those options. Third, it provides an overview of the current UNCITRAL1 process. Finally, the paper outlines two pragmatic options that can be pursued for addressing the current stock of thousands of treaties with ISDS, namely, a joint instrument on withdrawal of consent to ISDS and/or termination of investment treaties, and suggests how progress on these two options could be addressed in connection with ongoing negotiations at UNCITRAL.
Keywords: International Investment Law, Investor-State Dispute Settlement, Investment Policy
JEL Classification: F21, P33
Suggested Citation: Suggested Citation