Establishing an international investment advisory center is now a priority for many states. UNCITRAL Working Group III has put the issue at the top of its agenda for ISDS reform. The European Commission is considering an advisory center for its proposed Multilateral Investment Court. The Netherlands government has commissioned a feasibility study.
Thinking about an international investment advisory center naturally starts with the Advisory Centre on WTO Law (ACWL). Established in 2001, the ACWL is the “first true center for legal aid within the international legal system.” It seeks to level the playing field by giving developing states the same in-house capacity that developed states enjoy. The ACWL provides developing states with training, confidential advice on WTO law, and assistance or financial support during WTO dispute-settlement proceedings. The center receives funding from developed and developing states, including voluntary contributions and (below-market) fees from dispute-settlement proceedings. Two decades on, the ACWL has established itself as an integral part of the WTO dispute settlement system, playing “a crucial role in maintaining a viable and credible rules-based multilateral trading system.”
But is the ACWL the right model for an international investment advisory center? Unlike the WTO regime, the international investment regime is decentralized. There is no global treaty on investment protection, no global forum for addressing all investment-related issues, and no global institution to help states avoid, manage, and resolve investment disputes efficiently and effectively. Instead, each State—developing and developed—must devise its own approach to foreign investment and devote the human and financial resources necessary to comprehend, navigate, and develop that regime.
The decentralized nature of the international investment regime has important consequences. States often struggle to comprehend and comply with their international investment commitments across all levels of government, making it difficult to avoid or settle investment disputes. Many states lack significant expertise with investment arbitration, making it difficult to defend themselves effectively, or proactively shape the development of international investment law. States’ frequent reliance on external counsel may hinder the development of in-house government legal capacity essential to establishing coherent and consistent national treaty practice. A cycle of uncertainty, inexperience, and incapacity has bred discontent with the current regime, threatening its legitimacy. Viewed from that perspective, an international investment advisory center focused primarily on helping developing-state respondents in investment arbitration may fail to address underlying needs and broader concerns.
Broad Participation, Maximum Impact, Minimum Cost
A successful advisory center could help fill six gaps in the international investment regime: Read the rest of this entry…