Democratizing international dispute settlement: The case of trade and investment disputes

This research paper by the Center for International Environmental Law argues that international dispute settlement mechanisms, particularly in trade and investment, lack the transparency, public participation, and accountability necessary for democratic governance. The author contends that these processes often impact public policy and human rights while operating under secretive models derived from private commercial arbitration.

• International dispute settlement mechanisms generally lack transparency and public participation, which the author argues undermines democratic values and the legitimacy of the processes. The lack of public input is seen as a barrier to the quality of decisions, as public scrutiny could reduce "corruption, cronyism and nepotism".
• The World Trade Organization (WTO) dispute settlement system is described as binding and effective, but still too undemocratic. While the WTO posts reports and requests for consultation online, these reports are often not released to the public until significantly after they are issued to government parties, leading to potential misrepresentation by special interest groups.
• WTO proceedings are characterized by a high degree of secrecy regarding the process; party submissions are kept confidential unless a government chooses to release them, and hearings are typically conducted "in camera". A rare exception occurred in the US-Hormones case where parties agreed to open hearings via closed circuit television.
• Investment-related arbitration is based on a "secretive model" originating from private commercial arbitration. Unlike the WTO, it is often impossible for the public to know if a proceeding has even been initiated, except in the case of ICSID arbitrations which maintain a public registry.
• Investor-state arbitration has seen a rapid increase in use, with foreign investors using these tools to challenge domestic regulatory actions concerning health, safety, the environment, and human rights. These cases can result in massive monetary liabilities for public treasuries, such as the 37 arbitrations against Argentina following its financial crisis.
• The author highlights specific instances where investment disputes impacted public policy, including the provision of potable water in Bolivia, Argentina, and Tanzania, and the ban on exporting PCB wastes from Canada to the United States.
• Some progress toward transparency has been made, such as the United States, Canada, and Mexico committing to disclose all documents related to NAFTA investment arbitrations. Additionally, the UNCITRAL arbitration rules are currently being revised, presenting an opportunity for more participatory rules.

APA

Bernasconi-Osterwalder, N. (2006). Democratizing international dispute settlement: The case of trade and investment disputes. Center for International Environmental Law. https://www.ciel.org/wp-content/uploads/2015/03/ICNRD6_300ct06.pdf

Chicago

Bernasconi-Osterwalder, Nathalie. Democratizing international dispute settlement: The case of trade and investment disputes. Center for International Environmental Law, 2006. https://www.ciel.org/wp-content/uploads/2015/03/ICNRD6_300ct06.pdf.

Wikipedia

{{cite report |last1=Bernasconi-Osterwalder |first1=Nathalie |title=Democratizing international dispute settlement: The case of trade and investment disputes |publisher=Center for International Environmental Law |date=2006 |url=https://www.ciel.org/wp-content/uploads/2015/03/ICNRD6_300ct06.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bernasconiosterwalder2006democratizing, author = {Bernasconi-Osterwalder, Nathalie}, title = {{Democratizing international dispute settlement: The case of trade and investment disputes}}, institution = {Center for International Environmental Law}, year = {2006}, url = {https://www.ciel.org/wp-content/uploads/2015/03/ICNRD6_300ct06.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }