Investment | Brussels, 1 April 2014
European Commission to fund new international transparency database for Investor-to-state disputes (ISDS)
The European Commission is planning to provide €100,000 to the UN to create a publicly accessible database on ISDS disputes. This database or registry will be open to the public and will allow the public to access submissions and decisions in ISDS cases.
The creation of this database forms part of new UN transparency rules on ISDS. These rules which were adopted in July 2013 by the United Nations Commission on International trade (UNCITRAL), became operational today. The European Commission has long been a strong advocate of increasing transparency in ISDS disputes, not only in its own trade and investment agreements, but also at international level.
Within the UN, the European Commission has been at the forefront of efforts to establish these new rules on transparency: in a break with the past, today’s new rules will make ISDS cases open to the public and allow third parties such as NGOs to make submissions. The database/registry on ISDS cases will serve to underpin these new rules by further increasing transparency and accessibility to the public.
Why does the EU consider transparency to be important?
Transparency is at the core of EU investment policy. The EU sees increased transparency as essential for the legitimacy and accountability of the ISDS system. Transparency enables stakeholders interested in a dispute to be aware of what is happening and to contribute to the proceedings. It also brings consistency and predictability to the wider ISDS system because it helps create a body of cases and information that can be relied on by investors, stakeholders, states and ISDS tribunals.
Lack of transparency has been identified as one of the main challenges of the current investor-to-state dispute settlement system. The European Commission has responded to calls from the European Parliament and other stakeholders to ensure that ISDS is conducted in a transparent manner. MEPs and stakeholders called for submissions by the disputing parties (the investor and the state concerned) to published, transparency of awards by ISDS tribunals, and participation in hearings by civil society groups and NGOs. The new UN rules reflect the Commission's efforts to get improvements in these areas.
What kind of disputes will the new rules apply to?
As of today, the new UNCITRAL transparency rules can be applied to any ISDS dispute, both under existing investment agreements – some 3000 globally, of which 1400 involve EU Member States – and any future investment agreements. Work is ongoing to increase their scope of application.
The EU, in all on-going and future negotiations of trade and investment agreements e.g. Canada, Singapore and the US, aims not only to incorporate UNCITRAL Transparency Rules but to make it mandatory for the disputing parties that information relating to ISDS disputes under EU agreements is made publicly available.