Project Title

Capacity Building Workshop on Investor-State Dispute Settlement (ISDS) Prevention and Management 

Project Year

2017   

Project Number

CTI 03 2017A 

Project Session

Session 1   

Project Type

Standard 

Project Status

Project in Implementation   
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Project No.

CTI 03 2017A 

Project Title

Capacity Building Workshop on Investor-State Dispute Settlement (ISDS) Prevention and Management 

Project Status

Project in Implementation 

Publication (if any)

 

Fund Account

APEC Support Fund 

Sub-fund

ASF: General Fund 

Project Year

2017 

Project Session

Session 1 

APEC Funding

135,000 

Co-funding Amount

2,360 

Total Project Value

137,360 

Sponsoring Forum

Investment Experts Group (IEG) 

Topics

Investment 

Committee

Committee on Trade and Investment (CTI) 

Other Fora Involved

 

Other Non-APEC Stakeholders Involved

 

Proposing Economy(ies)

Peru 

Co-Sponsoring Economies

Australia; Canada; Chile; Japan; Mexico; Papua New Guinea; United States 

Expected Start Date

01/06/2017 

Expected Completion Date

31/12/2017 

Project Proponent Name 1

Vanessa Rivas Plata 

Job Title 1

Investment Affairs Coordinator, irectorate of International Trade Negotiations 

Organization 1

Ministry of Foreign Trade and Tourism 

Postal Address 1

Not Applicable 

Telephone 1

51-1 5136100 Extension 8050 

Fax 1

Not Applicable 

Email 1

vrivas@mincetur.gob.pe 

Project Proponent Name 2

Not Applicable 

Job Title 2

Not Applicable 

Organization 2

Not Applicable 

Postal Address 2

Not Applicable 

Telephone 2

Not Applicable 

Fax 2

Not Applicable 

Email 2

Not Applicable 

Declaration

Vanessa Rivas Plate 

Project Summary

In order to enhance investor protection and attract more investment, APEC economies have concluded an ever-growing number of International Investment Agreements (IIAs) that provide the investor-State dispute settlement (ISDS) mechanism as a method for the resolution of disputes between investors and host States. At the same time, the use of ISDS to resolve investment disputes has increased over the last decade. This project seeks to build capacity building among APEC officials in charge of IIAs negotiations and defense/management of ISDS cases to prepare for and manage ISDS cases when they arise.  For these purposes, a 4-day capacity building workshop to be held in October 2017 in Washington D.C. will be devoted to discussing member economy and practitioner experiences and lessons learned with respect to how to prevent the occurrence of ISDS cases, and how to effectively manage them once they have risen.

Relevance

An ever-growing number of IIAs are being concluded by APEC economies as a policy tool to attract foreign investment to boost economic growth. At the same time, the number of disputes between investors and host States, and the use of ISDS to resolve them have increased over the last decade. As this process continues, APEC economies have implemented various policies and ad hoc measures in order to diminish the incidence of investment disputes generally, and to seek to address disputes before they escalate into a formal arbitration proceeding. APEC economies have also gained new experience in preparing for and executing the management of actual ISDS cases.  In this respect, a critical area of policy in terms of ISDS prevention and case management requires to be discussed in the context of APEC so as to deepen the understanding among policy-makers, investment negotiators, legal affairs officers in charge of ISDS cases, and other APEC investment stakeholders on issues and factors that need to be considered in effectively preparing for the management of ISDS cases.

Objectives

The main objectives of the project are: 

1) To provide government officials who are involved in the negotiation and implementation of IIAs, legal affairs officers involved in ISDS management and other investment stakeholders from APEC economies with the policy tools to develop human resources and capacity building on how to prevent investment disputes, and how to manage them effectively in case those disputes proceed to formal dispute settlement.

2) In terms of prevention of investment disputes, the project seeks to explore strategies to prevent the rise of  investment disputes at two different levels: one, which is focused on how to improve clarity in treaty drafting in order to avoid any potential unanticipated consequences in the context of ISDS (e.g. provide specific guidance to arbitral tribunals on how to interpret certain IIAs provisions); and a second one, which is focused on the institutional aspects of ISDS prevention (e.g. strategies followed by APEC economies to communicate among government agencies the legal obligations vis-à-vis investors included under IIAs, mechanisms implemented by APEC economies to warn and to early identify a potential conflict between investors and host States, among others).

3) As to the management of ISDS cases, the capacity building workshop will be devoted to discuss experiences of APEC economies and recommendations from practitioners (legal counsels, investment arbitrators, and representatives from arbitral institutions) on how to effectively manage investment disputes that proceed to formal dispute settlement. In this respect, the objective of the workshop is to share experiences and lessons learned on practical issues such as: the establishment of legal team(s) and assignment of roles among government agencies; the establishment of a process for responding to cases; and key issues on management of arbitration.

Alignment

In the AELM Declaration of 2014, Leaders “(…) highly commended the work on the implementation of the Action Plan Framework on Capacity Building Need Initiatives (CBNI), and endorsed the Action Plan Framework of the 2nd CBNI.” Also, Leaders have specifically instructed officials to “(…) continue to work on measures affecting trade and investment as identified in the Study that support the achievement of the Bogor Goals. To achieve these goals, APEC could embark on work programs to build consensus and capacity for economies in the following areas including, but not limited to: (…) on investment, the focus should be to help economies clearly identify the areas of convergence in investment practice and exchange experiences on the negotiation and implementation of IIAs.” 

This project forms an integral part of the APEC Investment Facilitation Action (IFAP). Enhancing stability of investment environments, security of prosperity and protection of investments and enhancing international cooperation are two important principles of IFAP. This capacity building workshop addresses both principles by building investment expertise on how to prevent and manage ISDS cases, which directly impacts the enhancement of investment protection. Also, increasing awareness and capacity regarding investment principles in IIAs is aligned with IEG’s mandate to hold Investment Policy Dialogues to implement the APEC Strategy for Investment.

TILF/ASF Justification

IIAs constitute an instrument for contributing to economic growth, prosperity, and development. APEC developing economies have used IIAs as part of their strategy to stimulate growth and employment. As part of their capacity building needs, APEC developing economies require to gain knowledge on the policies and ad hoc measures implemented by other APEC economies on the most effective ways to prepare for and manage ISDS cases. As opposed to developed economies who might have already set up in-house legal teams for the defense of ISDS cases, developing economies require strengthening human resources capacities to manage and coordinate internally investor complaints and potential investment arbitrations. To this extent, the workshop will provide public officers from APEC developing economies with a comprehensive understanding on the dynamics of investment arbitration proceeding, so they can undertake internally any necessary measures to be prepared for an actual ISDS case. 

In addition to an overview of the policies and institutional mechanisms that APEC economies have already put in place to prevent and manage ISDS cases, the capacity building workshop will cover practical aspects for the management of investment arbitration once a conflict between a foreign investor and a host State proceeds to a formal arbitral proceeding. APEC developing economies will be benefited by sessions devoted to illustrate some of the practical tasks that legal counsels must perform during the course of an investment arbitration proceedings. These sessions will be particularly relevant to APEC economies who do not possess significant experience in facing ISDS cases.

Beneficiaries and Outputs

Outputs: The key output of this project will be a workshop, the objective of which is to facilitate discussion among ISDS practitioners, policy-makers, investment negotiators, legal affairs officers in charge of ISDS cases, and other APEC investment stakeholders, on issues and factors that need to be considered in effectively preparing for and managing ISDS cases. In addition to providing an initial forum for discussions, the workshop will create a platform for ongoing engagement among experts, which can provide an opportunity for longer term capacity-building and experience-sharing. To this extent, a workshop report will both summarize the substance of the workshop, and also provide information to allow participants and officials from member economies to develop a list of contacts to help them to develop their own strategies to prepare for and manage ISDS cases. The capacity building workshop seeks to tackle policy and practical aspects of investment disputes prevention and management, aiming at enabling APEC economies to put in place tailored-made policies, ad hoc measures or other institutional mechanisms in accordance with their own needs and priorities in order to identify and prevent potential ISDS cases, as well as to effectively manage cases that proceed to formal dispute settlement.

It is important to highlight that the choice of Washington DC for venue of the workshop is driven by the necessity to ensure the participation of a large number of speakers/experts who are based in the proximities of Washington DC (legal counsels involved in high-profile arbitration cases, investment arbitrators, staff from relevant international organizations (e.g., ICSID, World Bank, UNCITRAL) given the broad agenda of topics to be covered by the four-day workshop. This will allow us to ensure an efficient use of the budget by APEC to cover the travel expenses of APEC officials involved in investment arbitration management, while having a significant number of the most qualified experts/practitioners in the field of international arbitration who will participate in the workshop without any impact on the project’s budget. 

The capacity building workshop will be targeted at delivering recommendations, among others, on the following topics: 

1) Dispute Prevention and Preparedness (e.g., importance of coherence and clarity in treaty drafting; improving understanding of treaty obligations among government agencies; ensuring adherence to IIA obligations in the adoption and implementation of laws and regulations);

2) Preparing for Potential Arbitration (e.g., establishing team(s) and assigning roles and responsibilities among government agencies; establishing a process for responding to cases, including budgetary issues; in-house vs. outside counsel;

3) Management of Arbitration: Key issues (e.g., selection of arbitrators; role of arbitral institutions; coordination among government agencies during arbitration; coordination among treaty partners; logistical issues in arbitration.

Outcomes: A strong and predictable ISDS prevention and management framework strengthens the capacities of APEC economies to provide a more effective response to investment disputes, and may even serve as a deterrent to claims as investors assess the option of international investment arbitration. In this respect, it is important to note that some APEC economies have already designed and implemented policies and practices to prevent and better manage investment disputes. Some of those policies have taken the form of laws and regulations, while others consist on ad hoc measures, such as early warning systems, training for government officials on how governmental measures should be aligned with international obligations provided under IIAs, design of institutional frameworks for optimal dispute prevention and management, and monitoring systems. 

By providing an overview of various policies and institutional mechanisms that APEC economies have put in place to prevent and effectively manage investment disputes, as well as discussing with ISDS practitioners the nuts and bolts of ISDS cases, the capacity building workshop seeks to assist APEC economies on setting up their own mechanisms to early identifying potential investment disputes and manage those disputes that proceed to formal arbitral proceedings. Enhancing the capacities of APEC public officials involved in the negotiation and implementation of IIAs, as well as in the management/defense of ISDS cases, will directly impact on how these economies approach their response to potential ISDS cases. By enabling APEC economies to be prepared for mapping out and identifying potential investment disputes and manage them effectively, the institutional frameworks of these economies will be strengthened in the medium-term, enhancing a conducive environment for foreign investments while providing APEC economies with the adequate tools to respond to any potential conflicts with foreign investors, as these conflicts might harm their strategies to stimulate growth and employment. 

Beneficiaries: The capacity building workshop is targeted at policy-makers, investment negotiators, legal affairs officers in charge of ISDS cases, and other APEC investment stakeholders involved in the negotiation and implementation of IIAs. In order to ensure a successful workshop, APEC economies will be required to nominate participants with relevant experience in the negotiation of IIAs and/or the management/defense of ISDS cases, as they will contribute with an interactive dialogue to identify the challenges that their economies are currently facing when a potential conflict between foreign investors and hosts States arise. It is important to note that the nomination process will be conducted through the IEG members. 

All APEC economies, regardless of their level of development, will be benefited by a capacity building workshop that seeks to address the perspectives and experiences of APEC public officers in dealing with the various stages of investment arbitration: from an early identification of potential conflict between foreign investors and hosts States to the process of managing a formal investment arbitration proceeding. Noting that some APEC economies might have significant experience in the management of ISDS cases, the capacity building workshop will represent a platform where public officers from these economies play a relevant role in sharing their experiences with respect to a range of aspects involved in investment arbitration, such as, training of legal staff for investment arbitration, selection of outside counsel, and coordination activities within and between governments, among others. To this extent, public officers from APEC economies with less experience in dealing with ISDS cases, will acquire a comprehensive knowledge that will enable them to be prepared for potential future ISDS cases taking as a reference the lessons learnt from other APEC economies. 

In the field of policy measures, public officers from APEC economies could use the capacity building workshop as a first step to obtain relevant information on legal and institutional frameworks put in place by other APEC economies on the preparedness and management of ISDS cases, so they can build upon these frameworks to design and implement their own tailored-made mechanisms in accordance with their needs for an effective response to potential ISDS cases.

Dissemination

The workshop’s report, presentations and related materials will be made available to members in electronic format for distribution to public officials from APEC involved in the negotiation/implementation of IIAs, as well as in the management/defense of ISDS cases. These materials will comply with the relevant APEC Guidelines.

The materials will be sent to the APEC Secretariat for distribution through the APEC document database. The summary report will be published on the APEC website. 

The preliminary agenda of the workshop will be circulated in advance to receive comments and suggestions from APEC economies in order to meet their capacity building needs.

Gender

PO of this project is a female and governmental official of Peru. 

This capacity building will contribute to enhance the knowledge of both, women and men, investment negotiators. APEC economies will also be encouraged to consider qualified women candidates for participation in the workshop without discrimination with men candidates. It is expected include 40% of female participants at least. 

In order to ensure participation of female speakers, the organisers will send invitations to some economies indicating the relevance of having female speakers. In addition to that some female speakers with recognized expertise are being already identified and will be directly invited.

Work Plan

Timeline of Actions

Activities

Outputs

Timing

Establishment of Organizing Committee and Advisory Committee

Committee established

First week of July 2017

Workshop organization: venues, tentative agenda and request to Economies suggest keynote speakers

Preliminary Agenda is defined

Third week of July 2017

Invitation to speakers

Keynote speakers confirmed

First week of August 2017

Invitation to APEC members to participate

APEC members nominated per Economy Confirmed

First week of August 2017

Review of the agenda by the Advisory Committee and, once approved, it will be circulated among economies for their inputs

Approval of tentative Agenda

First week of August 2017

Administrative Circular will be sent to all participants with all details of the Conference

Participants received the Administrative Circular

Second week of August 2017

Workshop will be announced on the APEC webpage and confirmation of the event

Registration of Participants

Second week of August 2017

Information on workshop will be explained at IEG2

Preliminary discussions

Third week of August 2017

Workshop is developed in Washington DC,

United States of America

The workshop was successfully hosted

First week of October 2017

Present a brief report to IEG1 in 2018

Report

February, 2018 (TBC)

A report with outputs of the workshop will be disseminated among APEC members, participants of the workshop and APEC Secretariat.

Approved Report

Last week of November 2017

Risks

Risk 1: Ensure the participation of keynote speakers. 

Risk management: A letter of invitation will be circulated in advance. Early identification of potential speakers should ensure quality presentations for this event. 

The role of the Organizing Committee and Advisory Committee will be particularly relevant to identify potential speakers with a significant expertise in the themes to be addressed in this workshop. The members of the Organizing Committee and Advisory Committee will be public officials from APEC economies, officers from international organizations engaged in the developments of ISDS in the APEC region, and other actors who may contribute with their inputs to develop an agenda which suits the capacity building needs in the APEC region. 

Risk 2: Lack of attendance due to the geographical distance between Washington DC and some APEC Economies. 

Risk management: Given the geographical distance between the venue of the workshop and many APEC economies, it will be important that the Organizing Committee notifies at the earliest time possible all the logistical arrangements for the development of the workshop. In accordance with the timeline of actions proposed, participants from APEC economies must be confirmed by the third week of August, 2017 after they have received the necessary information to ensure their participation.

Monitoring and Evaluation

The preliminary agenda of the workshop will be circulated in advance to receive comments and suggestions from Economies. The main indicators of the success of the project are:

- The number of APEC economies engaged with the Project.

15

- The number of participants that will attend the workshop.

25

-  The number of female participants in this project is one of the most important indicators to assess the impacts on women. This workshop will contribute to increase the capabilities of negotiators with no discrimination between genders.

40% at at least

After the workshop, a survey will be distributed to government officials to obtain feedback. This will be very important for possible future events on similar issues. This will help to identify the main needs of the public officials in charge of or directly involved in the management/defense of ISDS cases.

Linkages

This project will build upon previous APEC projects on ISDS prevention and management but will go beyond previous projects to the extent that it seeks to assess potential policy options to improve ISDS prevention and ISDS management aspects of current frameworks implemented by APEC economies. Cross Fora collaboration will be promoted by involving groups that are currently working on strengthening legal frameworks in APEC (e.g. APEC Strengthening Economic Legal Infrastructure (SELI) Coordinating Group - EC).

Sustainability

The capacity building workshop will allow its beneficiaries to assess whether any policy measures need to be undertaken or improved domestically in order to prevent and effectively manage ISDS cases. In order to track how APEC economies have benefited from the workshop, it is necessary to follow up with future activities of similar nature where public officers in charge of the management/defense of ISDS cases share the results of implementing the recommendations provided by the workshop. 

Since the beneficiaries of the workshop will be public officials involved in the negotiation and implementation of IIAs, as well as in the management/defense of ISDS cases, it is important that these officials share the recommendations of the workshop with other officials from their own Governments, so the human resources capacities of the negotiating/ISDS management teams of the APEC economies represented in the workshop can be enhanced. In this respect, it is of major significance that APEC economies designate participants that play a key role as members of investment negotiating teams/legal teams in charge of the management or defense of ISDS cases, so they can lead in their respective economies a process of capacity building with the teams they work with. 

Building on this capacity building workshop, future seminars and workshops can be undertaken in order to track the developments in the prevention and management of ISDS cases. The goal of this workshop is to initiate a continuous dialogue among all the relevant actors involved in the preparedness and management of ISDS cases in the APEC region. 

It is important to track the outcomes of this workshop since it could constitute one of a series of capacity-building activities aiming at enhancing capacities of developing economies in the APEC region with respect to ISDS prevention and management. In terms of how the outcomes and impacts of the workshop will be measured, any future follow-up activities should address the institutional mechanisms that APEC economies decided to design and implement as a result of the workshop and how this implementation impacted their response to potential ISDS cases. Alternatively, the progress on the outcomes and impacts of the workshop could be measured by collecting written feedback from APEC economies on any new strategies/programs they have initiated as a result of the workshop. This can be achieved by circulating a survey to participating economies a year after the workshop, which could be rolled into existing APEC reporting mechanisms.

Project Overseers

Ms. Vanessa Rivas Plata
Investment Affairs Coordinator, Directorate of International Trade Negotiations, Vice Ministry of Foreign Trade.
Calle Uno Oeste N°50, Corpac, San Isidro, Lima, Peru
Tel: + 511 5136100 Ext. 8050
Email: vrivas@mincetur.gob.pe

Investment negotiator of the Trans-Pacific Partnership and the Pacific Alliance. Member of the negotiating team of the Free Trade Agreements with the Republic of Korea and China. Currently negotiating the Investment Chapter of a Free Trade Agreement between Peru and India.

Member of Peru´s Special Commission in charge of the management of investment disputes. 

Ms. Daniela Huertas
APEC Coordination, Vice Ministry of Foreign Trade
Calle Uno Oeste N°50, Corpac, San Isidro, Lima, Peru
Tel: + 511 5136100 Ext. 8033
Email: dhuertas@mincetur.gob.pe 

Responsible for Peru’s Committee of Trade and Investment coordination including Investment, Market Access, and Services.

Cost Efficiency

Not Applicable.

Drawdown Timetable

Not Applicable.

Direct Labour

Support for preparation and execution of the workshop will be self-funded.

Waivers

An advance payment (travel expenses for participants) will be necessary to ensure participation in the project.

Are there any supporting document attached?

No 
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Project No.

Project Title

Project Status

Publication (if any)

Fund Account

Sub-fund

Project Year

Project Session

APEC Funding

Co-funding Amount

Total Project Value

Sponsoring Forum

Topics

Committee

Other Fora Involved

Other Non-APEC Stakeholders Involved

Proposing Economy(ies)

Co-Sponsoring Economies

Expected Start Date

Expected Completion Date

Project Proponent Name 1

Job Title 1

Organization 1

Postal Address 1

Telephone 1

Fax 1

Email 1

Project Proponent Name 2

Job Title 2

Organization 2

Postal Address 2

Telephone 2

Fax 2

Email 2

Declaration

Project Summary

Relevance

Objectives

Alignment

TILF/ASF Justification

Beneficiaries and Outputs

Dissemination

Gender

Work Plan

Risks

Monitoring and Evaluation

Linkages

Sustainability

Project Overseers

Cost Efficiency

Drawdown Timetable

Direct Labour

Waivers

Are there any supporting document attached?

hdFldAdmin

Project Number

Previous Fora

Secretariat Comments

Reprogramming Notes

Consolidated QAF

Endorsement By Fora

PD Sign Off

Batch

Forum Priority

Committee Ranking Category

Committee Priority

PDM Priority

Priority Within Funding Category

Monitoring Report Received

Completion Report Received

PMU Field 1

PMU Field 2

PMU Field 3

On Behalf Of

Proposal Status

Originating Sub-Forum

Approval Status
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