UNCITRAL Working Group III and Reform of Investor–State Dispute Settlement
The United Nations Commission on International Trade Law Working Group III (UNCITRAL WGIII) has been pursuing reform of investor–state dispute settlement since 2017. IISD is an observer member of the Working Group and has participated in all of its sessions, working to promote a fair system to resolve investment-related disputes that enhance sustainable development.
In 2017, UNCITRAL mandated its Working Group III to identify concerns regarding investor–state dispute settlement (ISDS)—the process for settling disputes under investment treaties—and develop potential reform solutions.
IISD has been an observer member of the Working Group since its inception and has participated in all of its sessions.
The Working Group is crucial for the future of the international investment regime, being the only forum on ISDS reform with a global reach. The sessions are taking place while several countries and regions are developing new approaches to dispute settlement and prevention—as well as negotiating alternative types of treaties and renegotiating or terminating existing ones.
As an observer member, IISD has provided technical assistance, insights, and best practices guidance to a wide range of delegations from developing and emerging economies.
We have also delivered submissions directly to the UNCITRAL Secretariat, organized on-site workshops and side events, and published analyses of the process. Through these initiatives, we have continuously highlighted agenda issues with a high reform potential, such as the calculation of damages, and flagged developments that could threaten sustainable development.
IISD is having an extensive impact on the reform process. For example, our joint submission with the Columbia Center on Sustainable Investment and the International Institute for Environment and Development on regulating third-party funding of ISDS claims—a practice that has enabled speculative claims that often generate inflated costs for developing economies—incentivized the Working Group to publish draft regulation, and our recommendations were widely reflected in the text.
IISD's ultimate aim as a member of the Working Group is to help initiate an inclusive and transparent discussion on reforming the ISDS regime—and to help create a new approach to investment-related disputes that enhances, rather than threatens, sustainable development.
Submissions to the Working Group
IISD, the Columbia Centre on Sustainable Investment (CCSI), and the International Institute for Environment and Development (IIED) regularly submit joint comments to UNCITRAL Working Group III on proposals for the reform of investor–state dispute settlement.
Assessment of Damages and Compensation
Submission to UNCITRAL Working Group III in November 2021.
Submission to UNCITRAL Working Group III in September 2021.
Draft Work and Resourcing Plan
Submission to UNCITRAL Working Group III in March 2021.
Withdrawal of Consent to Arbitrate and Termination of International Investment Agreements
Submission to UNCITRAL Working Group III in July 2019.
IISD publishes regular research, analyses and recommendations to support developing economies to navigate the negotiations at UNCITRAL Working Group III.
UNCITRAL Working Group III and the Assessment of Compensation and Damages: Thinning scope for impactful reform or an opportunity to make a difference?
This paper summarizes the discussions on the assessment of compensation and damages at UNCITRAL Working Group III on Reform of Investor–State Dispute Settlement (ISDS) and proposes an efficient way to reform some of the problematic aspects of ISDS practice. The essay proposes limitations on the use of income-based valuation techniques (discounted cashflow method) in defined circumstances.
The UNCITRAL Code of Conduct: Breakthrough or diversion?
This article provides an overview and analysis of UNCITRAL Working Group III’s third draft Code of Conduct for Investment Adjudicators.
UNCITRAL Working Group III Considers Options to Regulate Third-Party Funding
This article discusses the draft regulatory provisions prepared by the Secretariat of UNCITRAL Working Group III on third–party funding.
Reflecting on a Year Online for International Investment Negotiators
This report examines the opportunities and challenges resulting from investment negotiations—including UNICTRAL Working Group III—moving online due to COVID–19.
Meetings and Events
IISD and partner organizations host webinars, events, and workshops alongside UNCITRAL Working Group III sessions to help developing country delegates prepare for the deliberations. See examples below.
2023 Investment Policy Forum
The 15th Investment Policy Forum was held in Panama City, Panama, from October 25 to 27, 2023. The event was organized by the International Institute for Sustainable Development (IISD) and hosted by the Government of Panama.
Informal Preparatory Meeting for the 42nd UNCITRAL WGIII Session
This preparatory meeting brought together developing and emerging economies to prepare for the 42nd session of UNCITRAL Working Group III in February, 2022.
Informal Preparatory Meeting for the 41st UNCITRAL WGIII Session
This preparatory meeting brought together developing and emerging economies to prepare for the 41st session of UNCITRAL Working Group III in November, 2021.
Reflecting on a Year Online: Lessons from an IISD survey of international investment negotiators
Participants in this webinar discussed a forthcoming IISD report on virtual negotiations on international investment governance, while also sharing their experiences with and views on the challenges and opportunities involved.
Reflecting on a Year Online: Lessons from a survey of international investment negotiators
Analysis of a survey on the opportunities, challenges, and consequences of virtual negotiations.
Compensation Under Investment Treaties: What are the problems and what can be done?
In this brief, the authors explore the subject of compensation under investment treaties, as well as options for reform, drawing from their analysis in a related longer paper.
World in Progress: Arbitration courts - why citizens foot the bill for big investors
When foreign investors sue governments for losses due to policy changes in so-called arbitration courts, countries can end up paying billions.
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