IISD Welcomes AU Ministerial Declaration on the Risks of Investor–State Arbitration for COVID-19 Measures

November 24, 2020 – At the 14th meeting of the African Union Ministers of Trade (AMOT) on November 24, 2020, ministers adopted a Declaration on the Risk of Investor–State Dispute Settlement with respect to COVID-19 related measures. This is a landmark move that can help ensure governments have the policy space they need to respond to the pandemic without the risk of costly legal challenges from foreign investors.  

H.E. Albert Muchanga, the Commissioner for Trade and Industry of AU Commission, expressed hope that “the action undertaken by the African Union Ministers of Trade will contribute to sustainable development-oriented international law and policy,” like other innovative and forward-thinking approaches developed by AU member states.  

IISD welcomes and supports this initiative by African Union Member States, which aims to raise awareness of COVID-19-related ISDS risks, provides member states with guidance on possible policy options that can address this risk effectively, and lends moral and political support to member states as they pursue options in line with their national needs.  

“The emergency measures that governments took to respond to the pandemic were vital from a public health perspective, as well as for safeguarding their economies. Ensuring that these measures do not face legal challenges from foreign investors is crucial,” said Nathalie Bernasconi-Osterwalder, Senior Director, Economic Law and Policy, at IISD. 

“This decision by the Ministers of Trade of African Union Member States gives some valuable guidance and political support for national policy-makers, as they continue their efforts at tackling the pandemic and planning for the COVID-19 recovery,” she said. The policy actions endorsed by the African Union are centred around the principles of cooperation, multilateral action, and the proactive exploration of options for mitigating ISDS risk. This issue has been the subject of extensive IISD research and consultations with governments, academics, and civil society over the past several months.  

IISD has published two commentaries that look at the unique COVID-19-related challenges of investor–state dispute settlement claims arising from investment treaties and national laws. Both look at why ISDS could be a cause for concern and which kinds of treaty and domestic law provisions could lead to ISDS claims. The commentaries also discuss the interaction between such laws and old-generation bilateral investment treaties along with ways to mitigate the risks of investor–state arbitration.