Launch of multi-stakeholder platform for investment treaty reforms

20 Oct 2023

Abu Dhabi, United Arab Emirates, 20 October 2023.

UNCTAD launches a multi-stakeholder platform for reform to ensure that investment treaties don’t hinder climate action.

Ahead of the annual climate summit (COP28), investment policymakers and experts discussed urgent reforms of investment treaties in light of the climate crisis at the World Investment Forum in Abu Dhabi.

Investors in both fossil fuels and renewable energy frequently rely on investment treaties to bring international arbitration cases against States, known as investor-State dispute settlement (ISDS). According to a recent UNCTAD report, there are more than 300 ISDS cases relating to fossil fuels and renewable energy.

As countries try to cut ties with fossil fuels, oil and gas firms might resort to these treaties to challenge policy actions taken in response to climate change. Investment treaties can also limit regulatory flexibility in the renewable energy sector. During the last decade, renewable energy investors have brought many ISDS cases against legislative changes involving reductions in feed-in-tariffs for renewable energy production.

Investment treaties, especially older ones, can hinder a just transition to a low-carbon economy. This is why UNCTAD calls for faster reforms of the investment treaty regime. Since 2012, UNCTAD’s work has focused on empowering countries to amend, renegotiate or terminate investment treaties based on their development priorities.

Investment treaties, or international investment agreements (IIAs), proliferated in the 1990s as an instrument of global investment policymaking and have become increasingly contentious over the past decade. IIAs contain substantive protection standards for foreign investors and investments, coupled with access to investor–State arbitration. Claimants have brought at least 1,250 ISDS cases worldwide, exposing over 130 States to significant costs.


Fast-tracking investment treaty reforms through a multi-stakeholder platform

To identify ways to fast-track investment treaty reforms, UNCTAD launched a Multi-Stakeholder Platform on IIA Reform (“Platform on IIA Reform”) at the World Investment Forum. The Platform on IIA Reform will serve as an informal and inclusive group of experts for knowledge sharing and exchange of best practices.

The Platform on IIA Reform will foster synergies across different areas that are relevant for international investment and sustainable development, including public health, environmental protection, right to regulate and climate action.


Related IIA track events at the UNCTAD World Investment Forum 2023