Investor State Dispute Settlement in Free Trade Agreements: An Australian Perspective
Roberto Bergami

Language: en
Last modified: 2015-03-06


Investor State Dispute Settlement (ISDS) clauses in Free Trade Agreements (FTA) have gained increased prominence in response to recent activity from, investors and governments alike. This has become a global issue given the number of new disputes and the explosion of FTA and regional trade agreements that have been spawned as a result of the stalled World Trade Organisation talks.

In 2013 alone 57 new ISDS cases were commenced, covering a wide variety of sectors, including: supply of electricity/gas; oil and mining; telecommunications; manufacturing; construction; tourism; banking; real estate services’ retail; media; and advertising. Whilst these cases will typically require prolonged settlement periods, as they weave their way through negotiation and litigation, this does not alleviate concerns about ‚special‘ investor provisions and what they mean for the recipient investment nation.

There are two main perspectives on ISDS. The first is the government that is seeking to entice foreign investment in such a manner that makes it attractive to would-be investors, but at the same time retain the right to ‚properly govern‘ the nation, including making future changes for the benefit of the nation’s citizens. The second perspective is that of the investor who, understandably, is looking to have their inputs protected from potentially unfavourable future government policy changes.

This article provides a summary of Australian FTA, highlighting ones with ISDS provisions, concluding there is no clear convergence on competing perspectives of governments and investors and a solution to please all is unlikely to be forthcoming in the near future.


foreign direct investment; international economics; international business; free trade agreements

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