IIED | February 2019
Reforming investor-state dispute settlement : what about third-party rights ?
by Lorenzo Cotula and Nicolás M Perrone
The international investment regime is facing sustained calls for reform.
Most debate centres on disputes between investors and states. But foreign
investment projects can also affect third parties — including local residents
and indigenous peoples. Existing arrangements for third parties to
participate in investor-state dispute settlement (ISDS) are not designed to
protect people whose rights and interests are directly at stake. This can
undermine their rights and the ability of tribunals to consider all relevant
facts and laws. A working group of the United Nations Commission on
International Trade Law (UNCITRAL) is now considering reforming ISDS.
Meaningful reform requires addressing fundamental asymmetries in the
international investment regime and exploring how to strengthen the
procedural rights of third parties. This policy brief discusses the issues and
outlines possible ways forward.