Compensation in International Investment Law

States are increasingly recognizing the critical issue of compensation in international investment governance and its potential to negatively impact their policy space and public spending. Compensation has been placed on the agenda of the United Nations Commission on International Trade Law (UNCITRAL) Working Group III for Investor-State Dispute Settlement (ISDS) Reform.

As these discussions continue, negotiators will need to determine what reform options best address the challenges of the past, considering lessons learned from arbitral jurisprudence. They will also need to consider how future reforms may be applied by arbitrators in practice.

IISD has been working across multiple fronts to support these reform efforts and to help negotiators develop their responses to these questions.

We are engaging directly with developing country investment negotiators as they strategize options for addressing compensation at UNCITRAL.

We are advancing the knowledge base on the issue through a paper developed under the Best Practices Advisory Bulletins series, which solicited and incorporated feedback on an earlier advance draft.

We are fostering a public discussion and debate on the issue through webinars on the subject. The first webinar, in August 2019, set out the scale and sources of the problem, and a subsequent webinar in November 2020 weighed options that states could pursue. Both webinars are part of IISD’s larger series of Webinars on Investment Law and Policy.