Over 340 Organizations Call for Abandoning Investor-State Arbitration at Santa Marta Conference
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TL;DR
- Over 340 organizations issued a joint declaration at the Santa Marta Conference.
- They call on governments to abandon the investor-state dispute settlement (ISDS) system.
- The coalition argues ISDS undermines climate transition and democratic sovereignty.
- Specific measures proposed include renegotiating or withdrawing from treaties containing ISDS.
Overview
At the Santa Marta Conference held in Colombia, a coalition of more than 340 organizations released a joint declaration urging governments to abandon the investor-state dispute settlement (ISDS) system in international arbitration. The coalition argues that ISDS poses a direct threat to climate policies and national democratic processes.
What Happened
On the opening of the First International Conference for the Transition Beyond Fossil Fuels in Santa Marta, Colombia, a broad civil society coalition presented a declaration warning that the ISDS mechanism limits government action on climate and environmental policy.
The declaration points to the ISDS mechanism, which allows corporations to sue states before arbitral tribunals for public policies affecting their investments, as a barrier to a just ecological transition and democratic governance.
The coalition highlighted recent ISDS-related rulings, including a decision requiring Colombia to pay over $500 million to Telefónica, as illustrations of its concerns. Colombia's president has also proposed leaving the ICSID arbitral system.
The declaration recommends several concrete steps, including renegotiating or withdrawing from existing treaties with ISDS provisions, refraining from signing new ones, and supporting international treaties to phase out such mechanisms.
Context
International investor-state arbitration, known as ISDS, enables corporations to challenge domestic regulations through international tribunals. Critics claim it grants large investors excessive rights at the expense of public interest and regulatory freedom.
The Santa Marta Conference, supported by Colombia and attended by other governments, focused on building political support for phasing out fossil fuels and highlighted concerns about ISDS as a significant obstacle.
Why It Matters
- The call to abandon ISDS reflects increasing scrutiny of arbitration mechanisms' impact on national policy, especially regarding environmental and climate regulation.
- Adopting the coalition's proposals could reshape how states negotiate investment treaties, particularly in the context of urgent climate transition measures.