Since the 1970s, almost any bilateral and regional investment treaty has provided for investor-state dispute settlement (“ISDS”). Based on these agreements, foreign investors can commence international arbitration against their host states, claiming administrative, regulatory, or judicial measures are in violation of substantive investment protection standards.
At a global level rising numbers of investor-state disputes and newly signed investment agreements suggest the continuous importance and attractiveness of this dispute settlement mechanism. Yet, we also see contestations. A few countries did not renew or even terminated existing investment instruments. Others have withdrawn from the ICSID-Convention.
What does this mean for the European Union? Simply carrying on appears no sustainable option anymore. Modern ISDS practice faces massive public criticism: non-transparent proceedings, hardly predictable outcomes, inappropriate interferences with democratic policy choices in host states, and considerable financial risks, just to mention a few controversial points.
What has been voiced and critically discussed in parts of academia, expert circles, and civil society for some time has now turned into a noisy global debate, which has to be addressed also by the European Union. Part of these efforts are the currently ongoing public consultations on investment protection and ISDS initiated by the European Commission.
Although the EU finds itself in times of sweeping change, its starting situation appears anything but bleak. With its international investment policy just unfolding the EU has the chance to provide significant impetus for correcting mistakes of the past and preserving the virtues of the ISDS mechanism for the future.
Speaking of virtues: ISDS is perceived as a forceful tool to manage political risk and to promote an international rule of law ...Zum vollständigen Artikel