Last week the United Nations Conference on Trade and Development (UNCTAD) released its annual World Investment Report. The report is an important source of information for researchers on the notorious Investor State Dispute System (ISDS). It highlights trends in the global trade and investment system including new trade and investment agreements signed, changes in policy and reform efforts by governments. It also reveals some basic statistics on how many new ISDS cases are launched each year, and the overall statistics on the outcomes of ISDS cases.
This year there was a change in the way UNCTAD presents this last figure – the overall statistics on the outcomes of ISDS cases. Understanding that change could provide a useful tool for campaigners in the current TTIP debates. On July 8th European Parliament members expressed their support for a TTIP deal in which a proposed 'new version' of ISDS would leave its most pernicious mechanisms essentially untouched.
The figures in question relate to:
- How many ISDS cases have been won by the corporation (the investor)?
- How many ISDS cases have been ‘won’ by the government that is being targeted (the state)?
- And how many ISDS cases have been settled?
In 2014, using the traditional UNCTAD methodology, figures on ISDS outcomes read as follows:
“[By the end of 2013]the overall number of concluded cases reached 274. Of these, approximately 43 per cent were decided in favour of the State and 31 per cent in favour of the investor. Approximately 26 per cent of cases were settled.”
What it means for a government to ‘win’ an ISDS case
Only corporations can bring ISDS cases against governments.
Governments, therefore, can’t ‘win’ cases as such.
Although we use the word ‘win’, the best possible outcome for a State is to not lose.
And even when States defend themselves successfully, they are often
liable for all of their own legal expenses – on average $8million.
On the face of these statistics, States have won more ISDS cases than investors. This is why we often hear defenders of the system saying the system is not biased in favour of investors. They say that even the UN statistics show that States win more than investors do.
So what has changed with UNCTAD’s 2015 report?
This year UNCTAD presented the figures on the outcomes of ISDS cases in the same way as they always have, but then added this:
“Looking at the decisions on the merits only, 60 per cent were decided in favour of the investor, and 40 per cent in favour of the State.”
