I've always assumed that when you have an international investment treaty, which sets out obligations that states have to follow (and are subject to legal claims when they do not), this is public international law. That is the case even if the "judges" hearing the claim are not part of a permanent judiciary. They might be private lawyers, or professors, as their main profession, but in the context of serving on an investment tribunal, they are authoring public international law.
And yet, in the EU at least, part of the ISDS debate seems to involve an effort to change it from "private" to "public", as shown by this interview with European Parliament member Bernd Lange, chair of the international trade committee:
There have also been concerns about the Investor-State Dispute Settlement (ISDS), which is a private system to resolve any possible disputes between investors and countries. How has the situation changed from last month when the plenary vote was postponed?
The clarification is new. Last time it was clear that ISDS is dead, that private arbitration is an instrument of the past and it is not foreseen by the Parliament anymore as an alternative in trade agreements.
However, last month it was not worded clearly enough. Now it is clear that ISDS has to be replaced by a public court. We need publicly appointed judges, we need a clear European mechanism, we need a public codex of the court. So it is a completely new system.
In his view, it seems, a change from "private arbitration" to a "public court" will be an important reform.
Now, there are, of course, ways to improve the ISDS legal system, and a permanent set of judges makes a lot of sense to me. But as I said at the outset, I think it already is public. So what exactly is behind his rhetoric?
Perhaps the use of "private" is designed both to denigrate the existing system and to offer evidence that it has been reformed. It was private and bad; it will now be public and good.
But if that's all ISDS reform is, I'm not sure they will have done anything of substance. Will these new "public" judges be more or less likely to find violations of international investment obligations? I don't know, but I can imagine them going either way. Some people actually believe in things like property rights and due process, and are eager to enforce them when given the chance. The "publicly appointed" judges they select may believe in this even more than the current "private" ones.
For more on this, here is the amendment to the ISDS part of the European Parliament's TTIP recommendations, which the Parliament will vote on tomorrow:
(xv) to ensure that foreign investors are treated in a non-discriminatory fashion, while benefiting from no greater rights than domestic investors, and to replace the ISDS-system with a new system for resolving disputes between investors and states which is subject to democratic principles and scrutiny, where potential cases are treated in a transparent manner by publicly appointed, independent professional judges in public hearings and which includes an appellate mechanism, where consistency of judicial decisions is ensured, the jurisdiction of courts of the EU and of the Member States is respected, and where private interests cannot undermine public policy objectives;
I guess what we are really talking about here is moving along the private-public continuum. The idea is to make ISDS look slightly more like a traditional public court. I suppose the proposals do achieve that, albeit to a very modest degree.
And finally, the big political question is, can a somewhat minor tweak to ISDS bring in enough votes to get trade agreements with ISDS approved by the European Parliament? On that issue, I have absolutely no idea.
