Commentary: Investor-to-state dispute settlement procedure needs a substantive overhaul

Author: Bart-Jaap Verbeek, SOMO, Published on: 16 May 2018

Between 23 and 27 April 2018, members of Working Group III of the United Nations Commission on International Trade Law (UNCITRAL) came together in New York to discuss a possible reform of the investor-to-state dispute settlement procedure (ISDS). At the meeting, the Working Group continued to identify concerns regarding ISDS, considered whether reform is desirable, and, developed possible solutions and recommendations. he discussions at UNCITRAL...tend to overlook the elephant in the room, that is, the overriding need for not simply a procedural reform, but a substantial overhaul of the current system for investment protection...The system currently provides exclusive access to international arbitration for foreign investors only, and focuses solely on their rights and privileges under investment treaties. There are no corresponding binding social and environmental obligations that investors must adhere to...We find ourselves at a crossroad, a point where fundamental reform is possible, and where governments bear the moral responsibility to play their part in designing a system that is consistent with combating social inequality, environmental degradation and climate change as the main challenges of our time. Any reform constrained to procedural aspects will not suffice...Now is the time to move towards a system aimed instead at regulating companies that operate trans-nationally so that their activities serve the public interest...

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