Investor-State Dispute Settlement (ISDS) System

Research Paper 162, 11 August 2022

The Proposed Standing Multilateral Mechanism and Its Potential Relationship with the Existing Universe of Investor – State Dispute Settlement

by Danish and Daniel Uribe

The reform option on the Standing Multilateral Mechanism (SMM) currently under discussion at UNCITRAL’s Working Group III (WGIII) has raised a number of important, systemic concerns for the procedural reforms of investor-State dispute settlement. This paper first seeks to situate the discussions on the SMM within its historical and contemporary contexts. Then it considers UNCITRAL Working Paper 213 and the legal provisions it contains, which form the basis of ongoing discussions of this reform option at WGIII. Further, it explores the potential relationship of this proposed SMM with different facets of the existing international investment law regime. The paper concludes by providing some elements which require further consideration in this process, particularly for safeguarding the interests of developing countries.

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SouthViews No. 232, 10 December 2021

Jamaica’s Perspective on Reform of the Global Investment Regime

By Omar Chedda

The Covid-19 pandemic has dealt a severe blow to the world economy, and in particular, Jamaica’s economy, due to supply chain bottlenecks and reduction of tourism, on which Jamaica is heavily dependent.  This is the context in which Jamaica is now reviewing its investment regime to ensure that investments contribute to recovery, building resilience and sustainable development, while improving investor rights and obligations in line with global trends.

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Investment Policy Brief No. 24, 9 December 2021

Potential Claims related to IP and Public Health in Investment Agreements: COVID-19, the Proposed TRIPS Waiver and Beyond

By Cynthia Ho

An under-examined issue during the COVID-19 crisis is the potential liability of countries under investment agreements for taking steps to mitigate COVID issues.  This Policy Brief provides an overview of how countries may be liable to companies for taking domestic action to protect public health, including pre-COVID claims related to Intellectual Property (IP), as well as possible claims because of COVID emergency measures, including claims that could result if the Agreement on Trade-Related Aspects of Intellectual Property Rights (TRIPS) Waiver was adopted.  The current COVID-19 crisis opens the opportunity to consider and reevaluate the unnecessary threat of international agreements that allow for investment claims and potentially consider their termination.

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Documento de Investigación 135, Noviembre de 2021

Implementación de una exención de los ADPIC relacionados con tecnologías y productos sanitarios para la COVID-19: Evitar reclamaciones en virtud de acuerdos de libre comercio e inversión 

Por Carlos M. Correa, Nirmalya Syam y Daniel Uribe

Aunque el creciente apoyo de los miembros de la OMC a una propuesta de exención de determinadas obligaciones en virtud del Acuerdo sobre los ADPIC con respecto a los productos sanitarios necesarios para responder a la COVID-19 ha hecho que sea inminente una decisión sobre la exención de los ADPIC, los miembros de la OMC tendrán que aplicar la exención a nivel nacional a través de medidas legislativas, administrativas o judiciales apropiadas, incluidas las órdenes ejecutivas que se han utilizado para aplicar medidas de emergencia en el contexto de la pandemia de la COVID-19. En este sentido, el alcance de la exención de los ADPIC, así como los términos aplicables en los acuerdos de libre comercio (ALC) y los acuerdos internacionales de inversión (AII) también influirán en el espacio de política disponible para que los países apliquen la exención. Será fundamental garantizar un amplio alcance de la exención, así como medidas complementarias para salvaguardar la aplicación de la exención de posibles impugnaciones en el marco de los ALC o los AII. Este documento de investigación analiza algunas opciones que podrían explorarse para permitir la aplicación de la exención de los ADPIC superando los posibles impedimentos que podrían surgir en el marco de dichos acuerdos.

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Document de Recherche 135, Novembre 2021

Mise en œuvre d’une dérogation ADPIC pour les technologies et produits de santé pour la COVID-19: prévenir les réclamations dans le cadre des accords de libre-échange et d’investissement  

Par Carlos M. Correa, Nirmalya Syam et Daniel Uribe

Bien que le soutien croissant des membres de l’OMC pour une proposition de dérogation à certaines obligations de l’Accord sur les ADPIC concernant les produits de santé nécessaires pour répondre à la pandémie COVID-19 ait rendu imminente une décision sur la dérogation ADPIC, celle-ci devra être mise en œuvre au niveau national par les membres de l’OMC par le biais de mesures législatives, administratives ou judiciaires appropriées, y compris par le biais de décrets qui ont été utilisés pour mettre en œuvre des mesures d’urgence dans le contexte de la pandémie COVID-19. À cet égard, la portée de la dérogation ADPIC, ainsi que les termes des accords de libre-échange (ALE) et des accords internationaux d’investissement (AII) applicables, auront également un impact sur la marge de manœuvre dont disposent les pays pour mettre en œuvre la dérogation. Il sera essentiel de garantir un large champ d’application de la dérogation, ainsi que des mesures complémentaires pour protéger la mise en œuvre de la dérogation contre d’éventuelles contestations dans le cadre des ALE ou des AII. Ce document de recherche examine certaines options qui pourraient être explorées pour permettre la mise en œuvre de la dérogation ADPIC en surmontant les obstacles qui pourraient survenir dans le cadre de tels accords.

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SouthViews No. 229, 25 October 2021

The Post COVID-19 Recovery: A Stringent Test for the Business and Human Rights Discourse

By H.E. Ambassador Luis Benigno Gallegos Chiriboga

Although the global economic outlook seems to be improving for the rest of 2021 and 2022, such benefits seem to only affect developed economies, while furthering the gap with emerging markets and developing economies. This shows that ‘recovery for all’ will remain gloomy for several years, as access to the COVID-19 vaccine continues to showcase the global inequalities between the rich and the poor. In this scenario, States require to make full use of their regulatory and policy space to protect and promote the human rights of all people and persons in their jurisdictions, including the right to health, while safeguarding the necessary fiscal space towards guaranteeing development expenditures to build back fairer and better. It is time for reducing inequalities rather than increasing the gap between developed and developing nations.

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SouthViews No. 228, 15 October 2021

Carving Out a Role for Human Rights in International Investment Law

by Barnali Choudhury

The public health burdens that have been imposed on governments by Covid-19 serve as an important reminder of the importance for states to be able to regulate public health as well as other human rights issues. Commentators are already describing the myriad of investment arbitration claims that states may expect to face for their acts in handling the Covid-19 crisis. By carving out a role for human rights in international investment law, states can ensure that protection of human dignity, not property interests, will continue to be their ultimate objective.

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Research Paper 135, September 2021

Implementation of a TRIPS Waiver for Health Technologies and Products for COVID-19: Preventing Claims Under Free Trade and Investment Agreements

by Carlos M. Correa, Nirmalya Syam and Daniel Uribe

While increasing support from WTO members for a proposed waiver from certain obligations under the TRIPS Agreement with regard to health products required for responding to COVID-19 has made a decision on the TRIPS waiver imminent, the waiver will have to be implemented domestically by WTO members through appropriate legislative, administrative or judicial measures, including through executive orders that have been utilized to implement emergency measures in the context of the COVID-19 pandemic. In this regard, the scope of the TRIPS waiver, as well as the terms of applicable free trade agreements (FTAs) and international investment agreements (IIAs) will also impact the policy space available to countries to implement the waiver. Ensuring a broad scope of the waiver, as well as complementary measures to safeguard the implementation of the waiver from potential challenges under FTAs or IIAs will be critical. This research paper discusses some options that could be explored to enable the implementation of the TRIPS waiver by overcoming possible impediments that could arise under such agreements.

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Report on Human Rights-Compatible International Investment Agreements, August 2021

Virtual Consultation in support of the UN Working Group’s 2021 Report to the UN General Assembly on Human Rights-Compatible International Investment Agreements

South Centre, 23 June 2021

Foreign direct investment (FDI) should support States’ efforts to “bring the SDGs and goals of the Paris Agreement to life for all people, everywhere.” However, achievement of these objectives is slowed down in the current situation where investor-State dispute settlement (ISDS) mechanisms are included in international investment agreements (IIAs). These mechanisms have increased the exposure of States to claims from foreign investors against regulatory measures taken to protect and guarantee a clean and safe environment, public health, human rights, social inclusion, and poverty reduction.

In the current scenario marked by the impact of the COVID-19 pandemic, FDI can be a valuable source of financing a better and fairer recovery, including investment needed to achieve the full realisation of all human rights. But to achieve this potential, there is a need to reshape the international investment regime, including through the reform of its substantive rules and standards, as well as of the ISDS mechanisms embedded in existing IIAs.

The South Centre and the United Nations Working Group on human rights and transnational corporations and other business enterprises convened a virtual consultation to identify and assess the different challenges developing countries face while negotiating or reforming IIAs in line with their international human rights obligations. The virtual consultation aimed at highlighting and discussing some of the most common concerns and challenges those developing countries face in the promotion of responsible investment practices, including an exploratory discussion about balancing the rights and obligations of investors in IIAs and safeguarding the sovereign right of States to regulate in the public interest for building back better and fairer in face of the COVID-19 pandemic. It also discussed possible reforms of the ISDS mechanism.

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South Centre Semester Report, January-June 2021

South Centre Semester Report, January – June 2021

This Semester Report summarizes the activities undertaken by the South Centre during the period 1st January to 30 June 2021. It is intended to provide information, organized by themes, about recent developments in the areas covered by the Centre’s Work Program, meetings organized or co-organized by the Centre to examine particular issues or provide analytical support for negotiations taking place in various international fora, and conferences and other meetings where the Centre has participated. It also informs about publications of the outcomes of internal policy-oriented research and external contributions made as a result of cooperation with the Centre.

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Investment Policy Brief 23, July 2021

UNCITRAL Working Group III: Moving forward towards consensus or loosing balance?

By Daniel Uribe and Danish

This policy brief considers some concerns arising from the ongoing discussions on procedural reform of investor-State Dispute Settlement (ISDS) in the United Nations Commission on International Trade Law (UNCITRAL) Working Group III. It highlights the need to allocate sufficient time to deliberate upon the important issues being raised by developing countries. It further discusses some structural reform options that have been identified by the Working Group and reflects on some concerns arising from a possible ‘single undertaking’ approach being implemented through a future possible multilateral agreement on ISDS.

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Investment Policy Brief 22, June 2021

Investment Policy Options for Facing COVID-19 Related ISDS Claims

By Daniel Uribe and Danish

Developing and least developed countries have undertaken a number of measures to fight against the multidimensional impacts of the COVID-19 pandemic. Such measures and those that may be adopted in the context of the recovery efforts are, however, susceptible to challenges by foreign investors using investor-State dispute settlement mechanisms.

This policy brief first considers the kinds of measures States have adopted to limit the spread of COVID-19, protect their strategic sectors and promote economic recovery, including through foreign investment aftercare and retention. It then addresses how the investor-State dispute settlement system (ISDS) has been used by investors in times of crises, based on the analysis of the awards in several cases brought against both developed and developing countries.

Against this backdrop, the brief elaborates on the different options and initiatives States can take for preventing ISDS claims at the national, bilateral, regional and multilateral levels. It concludes with some policy advice for developing and least developed countries to face possible COVID-19 related ISDS claims in the future.

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