Promoting Transparency in Investor-State Arbitration

Most investment treaties grant investors the procedural right to bring claims against governments through investor-state arbitration. Under the arbitration rules that commonly govern the proceedings, including the arbitration rules developed by a United Nations body, the United Nations Commission on International Trade Law (UNCITRAL), these disputes can remain hidden from public view from their commencement through conclusion. Recognizing the public interest in investor-state arbitration, UNCITRAL has been working since 2010 to develop a legal standard that would ensure transparency in investor-state arbitration.

Committed to the belief that transparency in investor-state arbitration is fundamental for accountability, good governance, and the rule of law, elements which are, in turn, crucial for sustainable development, CCSI has been participating in the UNCITRAL process and has drafted various notes and proposals in support of the effort to increase public access to information regarding these disputes. In October 2012, CCSI and partners submitted two documents to country delegations to UNCITRAL: a background note describing and analyzing the key issues involved in UNCITRAL’s work to increase transparency in investor-state arbitrations, and a proposal for specific text that UNCITRAL could adopt. Based on developments in October 2012, in February 2013, CCSI submitted additional comments on UNCITRAL’s efforts to ensure transparency of investor-state arbitration.

In July 2013, the United Nations Commission on International Trade Law (UNCITRAL) adopted its Rules on Transparency in Treaty-based Investor-State Arbitration. The Rules on Transparency offer a carefully negotiated and widely approved template for how to conduct investor-state arbitrations in a way that is consistent with the global recognition of the importance of transparency as a tool for promoting effective democratic participation, good governance, accountability, predictability and the rule of law.

CCSI, together with the Center for International Environmental Law and International Institute for Sustainable Development prepared a paper describing the new Rules on Transparency, the reforms they accomplished, and the work that remained in order to achieve their objective of ensuring broad transparency of investor-state arbitrations.

In July 2014, UNCITRAL took another important step toward ensuring transparency of investor-state arbitrations when it adopted the Mauritius Convention on Transparency. This treaty enables its parties to effectively implement the Transparency Rules for treaties that pre-date the Rules on Transparency. In order to promote greater awareness and understanding of this important new instrument, CCSI has published a Policy Paper providing background on the treaty and explaining its provisions. The commentary is based on attendance at UNCITRAL’s sessions, as well as written public records of the negotiations.

But even with the reforms advanced by the Transparency Rules and the Transparency Convention, gaps still remain that allow investor-State arbitrations to be conducted behind closed doors. CCSI continues to work to help close those gaps.