Tag Archives: Investors

Who are the investors?

Investors from a wide range of industries and company sizes have resorted to ISDS to enforce States’ obligations under international investment agreement.

As a recent study concluded that in general ISDS cases are concentrated in sectors like electricity and mining.

ISDS however have not only been used by investors from those sectors. From sustainable development perspective, ISDS has shown the potential to protect investment in climate change mitigation efforts. In the past three years, renewable energy investors such as wind power and solar power investors have brought claims to ISDS alleging, among others, breach of host government’s specific commitment regarding incentives for their investments.

Further, an investor who owns an environmental sanctuary have also recently brought a claim to ISDS, arguing that the host government has failed to enforce its own environmental law which harms the sanctuary.

In addition, many other investors are represented in ISDS, from producers of biscuit, ice cream and paper to eco-tourism businesses. For example, the investor in paper business brought a case arising from government’s ban to import a certain raw material, contrary to a previous authorization that the investor was allowed to do so.

The above has shown that ISDS as an efficient dispute resolution is important not only for rule of law but also for the functioning of the global economy. Foreign investors who have obtained specific promises from a government with regards to their investment, typically in the form of government contracts or permit for certain period, may enforce this promise through ISDS, as an international neutral venue.

Small and medium size enterprises benefit from ISDS procedural efficiency; it is usually faster and less costly compared to proceedings in domestic court.The importance of ISDS for SMEs is also confirmed by an OECD survey according to which 22% of ISDS claimants are either individuals or very small corporations with limited foreign operations. Extremely large multinationals only account for 8% of the claimants in the survey.