UN special procedures mandate holders’ letter to UNCITRAL WG III on ISDS reform

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Water pollution in El Salvador due to mining activities

UNCITRAL | 7 March 2019

UN special procedures mandate holders’ letter to UNCITRAL WG III on ISDS reform

At the outset, we wish to express our overarching concerns that international investment agreements (IIAs) and their ISDS mechanism have often proved to be incompatible with international human rights law and the rule of law. The UN special procedures mandate holders and other human rights experts have repeatedly highlighted the risks that IIAs and ISDS pose to the regulatory space required by States to comply with their international human rights obligations as well as to achieve the Sustainable Development Goals (SDGs). The inherently asymmetric nature of the ISDS system, lack of investors’ human rights obligations, exorbitant costs associated with the ISDS proceedings and extremely high amount of arbitral awards are some of the elements that lead to undue restrictions of States’ fiscal space and undermine their ability to regulate economic activities and to realize economic, social, cultural and environmental rights.The ISDS system can also negatively impact affected communities’ right to seek effective remedies against investors for project-related human rights abuses. In anumber of cases, the ISDS mechanism, or a mere threat of using the ISDS mechanism, has caused regulatory chill and discouraged States from undertaking measures aimed at protection and promotion of human rights.

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source: UNCITRAL