Discussions on Draft Provisions on Damages in the Investor-State Dispute Settlement System in UNCITRAL Working Group III
By José Manuel Alvarez Zárate
This paper summarizes the discussions within the United Nations Commission on International Trade Law (UNCITRAL) Working Group III (WG III) on the reform of investor-state dispute settlement (ISDS) regarding the two draft provisions on damages prepared by the UNCITRAL Secretariat as part of the two drafts on procedural and cross-cutting issues. It covers the period from September 2022 to July 8, 2024. It describes the draft provisions on damages and related provisions on procedural and cross-cutting issues of document A/CN.9/WG.III/WP.231, dated 26 July 2023, as well as the comments made on it by some members of WG III and observers. It also describes the changes to the above document contained in the second draft on the procedural and cross-cutting issues, dated July 8, 2024, contained in document A/CN.9/WG.III/WP.244.
The purpose of this paper is to provide an overview of the comments made by some States on the draft provisions on damages, the substantive changes made by the Secretariat to the first draft, mostly based on the comments made by some States, and the exclusion of important aspects highlighted by some Global South States in their interventions. In the light of this review, countries of the Global South may consider commenting on document A/CN.9/WG.III/WP.244 to ensure that their concerns are effectively taken into account.
Painting the Grass Green: A Climate Change Carve-Out in Investment Agreements
By Daniel Uribe
During the Twenty-Eighth Session of the Conference of the Parties (COP-28) of the United Nations Framework Convention on Climate Change (UNFCCC), States recognised the critical need to accelerate efforts to mitigate climate change and called on Parties to take action to transition away from fossil fuels in energy systems, to achieve net zero emissions by 2050. However, implementing such a transition finds obstacles in investor-state dispute settlement (ISDS) mechanisms, which can undermine regulatory actions necessary for climate policies, leading to a ‘regulatory chill’. As a response to these challenges, the Organisation for Economic Co-operation and Development’s (OECD) Future of Investment Treaties program has proposed a model carve-out provision to exclude fossil fuel sectors from ISDS protection with procedural safeguards, but its effectiveness may be limited. A holistic reform of investment agreements and additional measures, such as withdrawal from international investment agreements, are necessary to safeguard regulatory space and promote sustainable investment and a just transition.
The India-EFTA Deal: A New Model for Developing Countries?
By Danish
Governments are shifting from investor-state dispute mechanisms to treaties that encourage and ease investment. The India-European Free Trade Association (EFTA) Trade and Economic Partnership Agreement could be setting a new standard for developing countries to promote and benefit from foreign investment.
On the Forty-eighth Session of UNCITRAL Working Group III
By Jose Manuel Alvarez Zarate
The forty-eighth session of UNCITRAL Working Group III (WGIII) on Investor-State Dispute Settlement (ISDS) reform was held in New York from April 1-5, 2024. The WGIII made significant progress in various reform areas. The European Union’s proposal for a permanent Multilateral Investment Court is advancing, albeit with mixed support. A Code of Conduct, developed with ICSID and adopted in 2023, remains contentious. Likewise, discussions focused on the draft statute for an Advisory Centre on International Investment Dispute Settlement, revised guidelines for dispute prevention, and a draft statute for a Permanent Mechanism for ISDS. Despite progress, core criticisms of the ISDS system—transparency, balance of rights, and rule clarity—remain inadequately addressed. This document considers some of the progress made and the need to provide more time for discussions on procedural and cross-cutting issues, which are crucial for developing countries to achieve balanced and inclusive outcomes.
Side Event to the 46th Session of the United Nations Commission on International Trade Law (UNCITRAL) Working Group III (WG-III) on Investor-State Dispute Settlement (ISDS) Reform
“Cross-cutting issues at the centre of developing countries’ concerns during the 46th UNCITRAL WG-III Session: Developing Countries’ Efforts Towards ISDS Reform”
Co-organized by the South Centre, Curtis, Mallet-Prevost, Colt & Mosle LLP, the Columbia Centre on Sustainable Investment and the International Institute for Sustainable Development (IISD)
Side Event to the 46th Session of the United Nations Commission on International Trade Law (UNCITRAL) Working Group III (WG-III) on Investor-State Dispute Settlement (ISDS) Reform
“Cross-cutting issues at the centre of developing countries’ concerns during the 46th UNCITRAL WG-III Session: Damages at the Core of Discussion”
Co-organized by the South Centre (SC), Columbia Centre on Sustainable Investment, the International Institute for Sustainable Development (IISD) and the International Institute for Environment and Development (IIED)
Foreign Investment Flows in a Shifting Geoeconomic Landscape
By Danish
The economic shocks from the pandemic and rising geoeconomic tensions have triggered an accelerated restructuring of foreign investment flows in global value chains. As the previous determinants of foreign investment are rapidly changing, many new risks and opportunities abound for developing countries looking to attract FDI into their economies. This paper therefore looks at some of the important issues affecting foreign investment flows to developing countries both now and in the future. It then lays out some policy imperatives which can help countries ensure that the inbound foreign investment is responsible, sustainable and contributes to achieving the national development priorities.
Response to the Call for Inputs by the UN Special Rapporteur on human rights and the environment
“Should the interests of foreign investors trump the human right to a clean,
healthy and sustainable environment?”
South Centre
14 June 2023
To realize the right to clean, healthy & sustainable environment and reduce ISDS risks, States need to align their FDI policies with human rights, climate action and SDGs, including via reform of the international investment regime.
Preserving Regulatory Space for Sustainable Development in Africa
By Roslyn Ng’eno
Investment has an important role for achieving sustainable development in developing countries. Although international investment agreements (IIAs) can serve as instruments to promote such objective, protection oriented IIAs have undermined the ability of States to regulate in the benefit of the community. Likewise large financial reparations imposed by arbitral tribunals have increased the threat of regulatory chill in the face of major global challenges. Strengthening the right to regulate of States and addressing regulatory chill are key matters to consider in the reform of IIAs and the international investment regime.
Análisis de las intersecciones entre cambio climático y derechos humanos
Por Daniel Uribe Terán y Luis Fernando Rosales
Los efectos del cambio climático en la vida diaria de las personas amenazan el pleno disfrute de los derechos humanos. El Consejo de Derechos Humanos ha adoptado dos resoluciones históricas en las que se reconoce por un lado el derecho humano a un medio ambiente limpio, saludable y sostenible (Resolución 48/13), y se establece por otro el mandato de un Relator Especial sobre la promoción y la protección de los derechos humanos en el contexto del cambio climático (Resolución 48/14). Aun así, parece existir la necesidad de que la CMNUCC y la estructura de derechos humanos de las Naciones Unidas mantengan un diálogo más amplio a fin de dar con una respuesta coordinada y coherente al cambio climático y sus efectos sobre los derechos humanos.
En este documento de investigación se analizan las intersecciones de estos dos sistemas jurídicos. Para ello, se identifica el modo en que las negociaciones relativas al cambio climático y la estructura de derechos humanos pueden contribuir a fortalecer la cooperación internacional. También se reconoce la necesidad de un debate internacional de mayor calado acerca de las relaciones entre los derechos humanos y el cambio climático, coherente con los principios de equidad y las responsabilidades comunes pero diferenciadas del CMNUCC.
Analyse des Intersections entre le Changement Climatique et les Droits de l’Homme
Par Daniel Uribe Teran et Luis Fernando Rosales
Les effets du réchauffement climatique sur la vie quotidienne des êtres humains menacent la pleine jouissance de leurs droits. Le Conseil des droits de l’homme a adopté deux résolutions d’une portée historique, qui reconnaissent le droit de l’homme à un environnement propre, sain et durable (résolution 48/13), et nomment un rapporteur spécial chargé de la promotion et de la protection des droits de l’homme dans le contexte du changement climatique (résolution 48/14). Toutefois, un dialogue plus large entre la Convention-cadre des Nations unies sur les changements climatiques (CCNUCC) et l’architecture de protection des droits de l’homme de l’ONU semble nécessaire en vue de parvenir à une réponse coordonnée et cohérente au réchauffement climatique et à ses effets sur les droits de l’homme.
Le présent document de recherche analyse les points de convergence entre ces deux mécanismes en mettant en avant de quelle manière les négociations sur le réchauffement climatique et l’architecture de protection des droits de l’homme peuvent contribuer à renforcer la coopération internationale. Il reconnaît également la nécessité de discussions plus approfondies au niveau international sur les liens entre droits de l’homme et réchauffement climatique, conformément aux principes d’équité et de responsabilités communes mais différenciées inclus dans la CCNUCC.
El mecanismo multilateral permanente propuesto y su posible relación con el universo existente de solución de controversias entre inversionistas y estados
por Danish y Daniel Uribe
La opción de reforma del Mecanismo Multilateral Permanente (SMM) que se está debatiendo actualmente en el Grupo de Trabajo III (GTIII) de la Comisión de las Naciones Unidas para el Derecho Mercantil Internacional (CNUDMI) ha planteado una serie de importantes preocupaciones sistémicas para las reformas procesales de la solución de controversias entre inversionistas y Estados. El presente documento trata en primer lugar de situar los debates sobre la SaaaMM en su contexto histórico y contemporáneo. A continuación, examina el Documento de Trabajo 213 de la CNUDMI y las disposiciones legales que contiene, que constituyen la base de los debates actuales sobre esta opción de reforma en el GTIII. Además, explora la posible relación de esta propuesta de SMM con diferentes aspectos del régimen jurídico internacional vigente en materia de inversiones. El documento concluye proporcionando algunos elementos que requieren una mayor consideración en este proceso, especialmente para proteger los intereses de los países en desarrollo.
