These constraints could be largely or wholly alleviated through a plurilateral arrangement facilitated and hosted by an existing international organization. UNCITRAL would likely be the preferred choice for the EU, and perhaps for a number of non-EU states as well, as it is becoming the centre of gravity on investment treaty reform. Discussions are already under way through UNCITRAL’s working group on ISDS reform to support state interpretations as a complement to the main objective of establishing a new dispute settlement architecture. If UNCITRAL ends up being the forum, states should ensure that the interpretative agenda takes priority, as this is currently bundled up with a considerable number of other reform suggestions in the draft work plan.
If UNCITRAL ends up as the forum, states should ensure that the interpretative agenda takes priority, as this is currently bundled up with a considerable number of other reform suggestions.
Alternatively, a group of states could kick-start the process without having to wait for the already-lengthy UNCITRAL deliberations on multilevel structural reform. For instance, if the administration of US President Joe Biden is more serious about investment treaty reform than previous US administrations have been, it could lead the process through the OECD, possibly with the UK. OECD membership is more limited than that of some other multilateral groupings, of course, but its secretariat has the expertise and experience with effective reform efforts in related fields, for instance with its Multilateral Instrument designed to update thousands of bilateral double-taxation treaties.
Whichever forum is chosen, the secretariat leading this effort will have two core functions, both of which must be pursued in close cooperation with states. It should map out common ground among potential signatory states. Much of this work has already been done by researchers and international organizations – as well as by states themselves in the context of discussing future treaties. And on the basis of this mapping exercise, the secretariat should produce a series of interpretative statements on contentious provisions and issues, possibly organized into a tiered ladder of ambition with associated commentary. Governments could then, in turn, opt into some or all of these statements on an individual basis during meetings facilitated by the secretariat.
This mechanism is potentially attractive. First, it is flexible. It allows governments to pick and choose how ambitious or cautious they want to be. Second, the proposal is more politically attractive than bilateral interpretations, as states taking the lead can present themselves as reformers and rule-makers in the investment regime. Third, a plurilateral mechanism is not just cheaper than serial bilateral efforts but also has economies of scale. Once the process is completed for a few provisions and states, the transaction costs associated with future interpretations will decrease further. Importantly, this could generate an institutional focal point for states ready to amend or replace provisions.
During the early 2000s, when the risks of ISDS were less clear than today, the United Nations Conference on Trade and Development (UNCTAD) facilitated many successful ‘mass-weddings’ in which state negotiators came to Geneva to negotiate BITs. The process was quick and efficient. Now is the time to do the same, but in an attempt to revise the global investment treaty network rather than expand it. A plurilateral interpretative mechanism will by no means be a silver bullet. In some cases, renegotiations or terminations will be more meaningful. But at a moment when governments around the world are looking to address mounting pressures on the investment regime, it offers a practical and politically feasible option for states to revisit the most contentious corner of international economic law.
