A Balancing Act: Retaining Investor-State Dispute Settlement Provisions in Investment Agreements and Balancing Stakeholder Interests

This paper is written in the context of the unravelling policy debate on Investor-State Dispute Settlement in Australia, which has become central in the Trans-Pacific Partnership negotiations. Deviating from the widely accepted international practice of resolving investment disputes through international arbitration, the former Gillard government, in its April 2011 Trade Policy Statement, decided to discontinue the practice of including such dispute settlement provisions in investment agreements with developing countries. The paper argues that excluding ISDS provisions would in fact be a misdirected solution to the government’s concerns that are, allegedly, behind the new policy and would negatively impact on the interests of key stakeholders to investment agreements, being disproportionately beneficial to the host state, to the disadvantage of both foreign and domestic investors.