Public Statement on the International Investment Regime – 31 August 2010

IMPORTANT NOTE: The statement reflects the opinions of its individual supporters and should not be attributed to any organization or institution with which each is affiliated. It does not represent legal or other professional advice of any kind.

We have a shared concern for the harm done to the public welfare by the international investment regime, as currently structured, especially its hampering of the ability of governments to act for their people in response to the concerns of human development and environmental sustainability.


General principles

  • The protection of investors, and by extension the use of investment law and arbitration, is a means to the end of advancing the public welfare and must not be treated as an end in itself.
  • All investors, regardless of nationality, should have access to an open and independent judicial system for the resolution of disputes, including disputes with government.
  • Foreign investment may have harmful as well as beneficial impacts on society and it is the responsibility of any government to encourage the beneficial while limiting the harmful.
  • States have a fundamental right to regulate on behalf of the public welfare and this right must not be subordinated to the interests of investors where the right to regulate is exercised in good faith and for a legitimate purpose.

Pro-investor interpretations of investment treaties

  • Awards issued by international arbitrators against states have in numerous cases incorporated overly expansive interpretations of language in investment treaties. These interpretations have prioritized the protection of the property and economic interests of transnational corporations over the right to regulate of states and the right to self-determination of peoples. This is especially evident in the approach adopted by many arbitration tribunals to investment treaty concepts of corporate nationality, expropriation, most-favoured-nation treatment, non-discrimination, and fair and equitable treatment, all of which have been given unduly pro-investor interpretations at the expense of states, their governments, and those on whose behalf they act. This has constituted a major reorientation of the balance between investor protection and public regulation in international law.
  • The award of damages as a remedy of first resort in investment arbitration poses a serious threat to democratic choice and the capacity of governments to act in the public interest by way of innovative policy-making in response to changing social, economic, and environmental conditions.

Legal framework and dispute resolution

  • The primary legal framework for the regulation of investor-state relations is domestic law.
  • Investment treaty arbitration as currently constituted is not a fair, independent, and balanced method for the resolution of investment disputes and therefore should not be relied on for this purpose. There is a strong moral as well as policy case for governments to withdraw from investment treaties and to oppose investor-state arbitration, including by refusal to pay arbitration awards against them where an award for compensation has followed from a good faith measure that was introduced for a legitimate purpose.
  • Private citizens, local communities and civil society organizations should be afforded a right to participate in decision-making that affects their rights and interests, including in the context of investor-state dispute settlement or contract renegotiation. The international investment regime, by not allowing for full and equal participation of such parties alongside the investor where their interests are affected, fails to satisfy this basic requirement of procedural fairness.
  • Although not without flaws, investment contracts are preferable to investment treaties as a legal mechanism to supplement domestic law in the regulation of investor-state relations because they allow for greater care to be taken and greater certainty to be achieved in the framing of the parties’ legal rights and obligations. This is only so, however, if the investment contract precludes resort by either the investor or the state to an investment treaty claim so as to permit it to avoid its contractual commitments, including commitments on dispute settlement and choice of law.
  • Investment contracts should be concluded and implemented in accordance with the principles of public accountability and openness and should preserve the state’s right to regulate in good faith and for a legitimate purpose.
  • Investment contracts should provide a mechanism for managed renegotiation by the investor and state, based on a fair and balanced process in which adequate support and resourcing is available to both parties, so as to accommodate significant changes in the circumstances of the underlying agreement.
  • Proposals to conclude a multilateral investment agreement or to restate international investment law based on recent arbitration awards are misguided because they risk entrenching and legitimizing an international investment regime that lacks fairness and balance, including basic requirements of openness and judicial independence.


  • States should review their investment treaties with a view to withdrawing from or renegotiating them in light of the concerns expressed above; should take steps to replace or curtail the use of investment treaty arbitration; and should strengthen their domestic justice system for the benefit of all citizens and communities, including investors.
  • International organizations should refrain from promoting investment treaties and should conduct research and make recommendations on the serious risks posed to governments by investment treaty arbitration; on preferred alternatives to investment treaty arbitration including private risk insurance and contract-based arbitration; and on strategies for states to pursue withdrawal from or renegotiation of their investment treaties.
  • The international business community should refrain from promoting the international investment regime and from resorting to investment treaty arbitration. Instead, it should promote fair and balanced adjudicative processes that satisfy the requirements of openness and judicial independence in accordance with the principles of procedural fairness and the rule of law. The international business community should also seek to resolve disputes in a co-operative spirit with recourse to adjudication only as a last resort.
  • Civil society should continue to take steps to inform its constituents and society at large of the failures of and threats posed by the international investment regime and to oppose the application of that regime to governments that undertake legislative or general policy measures for legitimate purposes.


Gus Van Harten
Associate Professor of Law
Osgoode Hall Law School
David Schneiderman
Professor of Law and Political Science
University of Toronto
Muthucumaraswamy Sornarajah
Professor of Law
National University of Singapore
Peter Muchlinski
Professor of Law
University of London (SOAS)
Sol Picciotto
Emeritus Professor of Law
Lancaster University
Craig Scott
Professor of Law
Osgoode Hall Law School
Kyla Tienhaara
Research Fellow in Environmental Governance
Australian National University
Obiora Okafor
Professor of Law
Osgoode Hall Law School
Stepan Wood
Professor of Law
Osgoode Hall Law School
Amanda Perry-Kessaris
Professor of Law
University of London (SOAS)
Kevin Gallagher
Associate Professor of International Relations
Boston University
Margot Salomon
Senior Lecturer in Law
London School of Economics
A. Claire Cutler
Professor of International Law and International Relations
University of Victoria
Martin Loughlin
Professor of Public Law
London School of Economics
Barnali Choudhury
Assistant Professor in Law
McGill University
Saskia Sassen
Professor of Sociology
Columbia University
Jennifer Clapp
Professor of Environmental Studies
University of Waterloo
Tom Faunce
Associate Professor of Law
Australian National University
Peter Drahos
Professor of Law
Australian National University
Peter Newell
Professor of International Development
University of East Anglia
Sheldon Leader
Professor of Law
University of Essex
Anne Orford
Professor of International Law
University of Melbourne
Julio Faundez
Professor of Law
University of Warwick
Paddy Ireland
Professor of Law
University of Kent
Emma Aisbett
Research Fellow in Economics
Australian National University
Jonathan Klaaren
Professor of Law
University of the Witwatersrand
James Gathii
Professor of International Commercial Law
Albany Law School
Ken Shadlen
Reader in Development Studies
London School of Economics
John Braithwaite
Federation Fellow in Regulatory Institutions
Australian National University
Harry Arthurs
Professor of Law
Osgoode Hall Law School
Stephen Clarkson
Professor of Political Science
University of Toronto
Ruth Buchanan
Associate Professor of Law
Osgoode Hall Law School
Martti Koskenniemi
Professor of International Law
University of Helsinki
Nico Krisch
Professor of International Law
Hertie School of Governance
Markus Krajewski
Guest Professor of Law
University of Bremen
Penelope Simons
Associate Professor of Law
University of Ottawa
Lawan Thanadsillapakul
Professor of Law
Sukhothai Thammathirat Open University
Graham Mayeda
Associate Professor of Law
University of Ottawa
Cai Congyan
Professor of International Law
Xiamen University
Liu Sun
Zhongnan University of Economics and Law
Joachim Spangenberg
Research Coordinator
Sustainable Europe Research Institute
Daniel D. Bradlow
Professor of International Development Law and African Economic Relations
University of Pretoria
Xiuli Han
Associate Professor of International Law
Xiamen University
Christian Bellak
Associate Professor of Economics
University of Vienna
Audrey Macklin
Professor of Law
University of Toronto
Eva Paus
Professor of Economics
Mount Holyoke College
Stephen McBride
Professor of Political Science
McMaster University
Jane Kelsey
Professor of Law
University of Auckland
Leonardo E. Stanley
Associate Researcher
Centro de Estudios de Estado y Sociedad
Carolina Olarte B.
Professor of International Law
Pontificia Universidad Javeriana de Bogotá
Rhys Jenkins
Professor of Development Economics
University of East Anglia
Ricardo Grinspun
Associate Professor of Economics
York University
Wolfgang Voegeli
Professor of International Studies
University of Hamburg
Ikechi Mgbeoji
Associate Professor of Law
Osgoode Hall Law School
Georgy M. Velyaminov
Professor of Law
Institute of State and Law
Russian Academy of Sciences
Claudio Lentini
Professor of External Trade and International Economy
National University of Lanús
Lara Montesinos Coleman
Lecturer in International Security
University of Sussex
Ian Bruff
Lecturer in European Politics
University of Manchester
Raymond Hinnebusch
Professor of International Relations
University of St. Andrews
Leo Panitch
Professor of Political Science
York University
J. Magnus Ryner
Reader in International Political Economy
King’s College London
Andy Storey
Lecturer in Development Studies
University College London
Grahame Thompson
Professor of International Business
Copenhagen Business School
Andreas Bieler
Professor of Political Economy
University of Nottingham
Adam David Morton
Associate Professor of Political Economy
University of Nottingham
Victoria Goddard
Professor of Anthropology
Goldsmiths, University of London
Victor Anderson
Visiting Professor
Anglia Ruskin University
Stephen Gill
Professor of Political Science
York University
Kristen Hopewell
Assistant Professor of Sociology
University of British Columbia, Okanagan
Margherita Rendel
Reader Emerita in Human Rights and Education
University of London
Nigel Trow
Dean of Art and Design (retired)
University of Wales
David Packham
Senior Lecturer in Materials Science
University of Bath
Julian Wells
Senior Lecturer in Economics
Kingston University
William Outhwaite
Professor of Sociology
Newcastle University
Lynn Mainwarings
Emeritus Professor of Economics
Swansea University
Caroline Kuzemko
Research Fellow, Energy Policy Group
University of Exeter

For further information or to support or endorse this statement, please contact:

Gus Van Harten
Associate Professor
Osgoode Hall Law School
York University
4700 Keele Street, Toronto, ON
Canada  M3J 1P3+1 416 650 8419 (tel)
David Schneiderman
Professor of Law and Political Science
Faculty of Law
University of Toronto
78 Queen’s Park, Toronto, ON
Canada  M5S 2C5+1 416 978 2677 (tel)



This statement emerges from discussions during a visit by Professor M. Sornarajah to Osgoode Hall Law School of York University in Toronto, Canada, and at a workshop on the adjudication of international economic disputes held at the Oñati International Institute for the Sociology of Law.

The statement was motivated by a concern that we are at an important juncture for the international investment regime in light of upcoming meetings and ongoing processes on investment law and arbitration. These include:

  • European Union processes to develop a common investment policy that could consolidate or supercede hundreds of bilateral investment treaties.
  • Negotiations toward a Trans-Pacific Partnership Agreement on investment;
  • Possible renewed negotiations on investment at the World Trade Organization, especially in relation to trade disciplines under the General Agreement on Trade in Services;
  • Regional initiatives to reform investment law and arbitration, especially in Latin America;
  • Reviews by states of their domestic policy on investment law and arbitration;
  • Revisions of their arbitration rules, as they involve states, by the UN Commission on International Trade Law and by the International Chamber of Commerce;
  • Upcoming meetings of the UN Conference on Trade and Development and other organizations that will address investment treaties.

The aim of this statement is to bring the concerns expressed above to the attention of decision-makers and the public in general.