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

See all articles by Lise Johnson

Lise Johnson

Columbia Center on Sustainable Investment

Lisa Sachs

Columbia University - Columbia Center on Sustainable Investment

Brooke Guven

Columbia University - Columbia Center on Sustainable Investment

Jesse Coleman

Columbia University - Columbia Center on Sustainable Investment

Date Written: April 2018

Abstract

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

Johnson, Lise and Sachs, Lisa and Guven, Brooke and Coleman, Jesse, Clearing the Path: Withdrawal of Consent and Termination As Next Steps for Reforming International Investment Law (April 2018). CCSI Policy Paper. April 2018. Available at SSRN: https://ssrn.com/abstract=3281144

Lise Johnson (Contact Author)

Columbia Center on Sustainable Investment ( email )

New York, NY
United States

Lisa Sachs

Columbia University - Columbia Center on Sustainable Investment ( email )

William C. Warren Hall, 1st floor
410 West 116th Street
New York, NY 10027
United States
(212) 854-0691 (Phone)

Brooke Guven

Columbia University - Columbia Center on Sustainable Investment ( email )

William C. Warren Hall, 1st floor
410 West 116th Street
New York, NY 10027
United States

Jesse Coleman

Columbia University - Columbia Center on Sustainable Investment ( email )

William C. Warren Hall, 1st floor
410 West 116th Street
New York, NY 10027
United States

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