International Energy Charter Draft Model Investment Dispute Prevention and Management Protocol
IISD legal analysis of the draft Model Investment Dispute Prevention and Management Protocol developed by International Energy Charter Secretariat.
The International Energy Charter Secretariat has developed a draft Model Investment Dispute Prevention and Management Protocol, aimed at providing a framework for states to prevent, manage and resolve investment disputes.
The draft addresses tasks, powers, decision making, information sharing, financial considerations, coordination among relevant agencies and individuals, state representation, among other topics, in relation to international investment disputes.
We understand that the topics covered by the so-called Protocol would be better served—at least from the perspective of state interests—by guidance and good practice materials as opposed to the effort to develop a legal or quasi-legal instrument creating additional legal jeopardy for states in an arbitration context.
IISD fully supports the view that governments should develop strong internal procedures for preventing and managing investment disputes. Indeed, we have assisted developing countries in doing so. This is a prudent and reasonable course of action.
However, that does not mean these steps should be legalized and turned into rigid documents with short timelines that can work to prevent states from developing strong positions and approaches as alternatives to arbitration. The proposed instrument is of little benefit to states on either account. It overreaches legally and underachieves in terms of being a really practical tool for governments. Instead, it creates new legal risks for states.
Background on the International Energy Charter
The International Energy Charter Secretariat is mostly known for the large number of investor–state arbitrations brought under its Energy Charter Treaty (ECT). With the original aim of integrating the energy sectors of the former Soviet Union and Eastern Europe into Western European markets at the end of the Cold War, the stated purpose of the ECT was to establish “a legal framework in order to promote long-term cooperation in the energy field.” Although the framework covers multilateral cooperation over energy transit, trade and efficiency, its primary focus has been on investment protection and international arbitration. The secretariat is looking to gain new resource-rich member countries in Africa, Asia and Latin America.
Download the draft Model Investment Dispute Prevention and Management Protocol.
You might also be interested in
Carbon Offset Deals and the Risks of “Green Grabbing”
Governments must ensure land-based investments for carbon removal respect the access and tenure rights of Indigenous Peoples and local communities.
Rethinking Investment Treaties
The reports maps out how the treaty system can be redesigned from the bottom up to accelerate—rather than obstruct—genuine sustainable development and international cooperation.
EU Exits Treaty Allowing Fossils to Sue Over Climate Policy
European Union lawmakers have voted to withdraw from an international agreement protecting energy investment and trade, paving the way for other signatory states to follow suit.
Could CSDDD Signal A Tipping Point For Corporate Accountability?
This week has seen the EU agree new rules on supply chain due diligence, one of a set of laws passed including action on toxic air, packaging and packaging waste. What the Corporate Sustainability Due Diligence Directive establishes is legal liability for corporates on environmental and human rights issues in the European courts—and that could change the framework of corporate accountability.