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 treatiesand 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 preventionas 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 claimsa practice that has enabled speculative claims that often generate inflated costs for developing economiesincentivized 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 regimeand to help create a new approach to investment-related disputes that enhances, rather than threatens, sustainable development. 

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