Fair and Equitable Treatment: Why it matters and what can be done

This policy brief from the International Institute for Sustainable Development (IISD) examines the Fair and Equitable Treatment (FET) standard in International Investment Agreements (IIAs), noting its role in the majority of Investor-State Dispute Settlement (ISDS) cases and offering strategies for governments to protect their regulatory autonomy.

• The Fair and Equitable Treatment (FET) standard is highly controversial and is the basis for the majority of known Investor-State Dispute Settlement (ISDS) cases.
• FET presents several challenges, including inconsistent interpretations, a broad range of measures that may be seen as breaches, and the creation of a 'regulatory chill' effect.
• To protect their right to regulate and minimize ISDS claims, governments have several policy options: they can remove FET clauses from IIAs entirely, use alternative standards that avoid the phrase 'fair and equitable,' or implement a limited and clearly defined FET standard.
• States are advised to prioritize the standard of treatment clause during the negotiation or renegotiation of IIAs, ensuring that new, carefully drafted provisions are paired with actions to address existing IIAs that contain unqualified FET clauses.

APA

Nikièma,, F. S. H. (2022). Fair and Equitable Treatment: Why it matters and what can be done. International Institute for Sustainable Development. https://www.iisd.org/publications/brief/fair-equitable-treatment

Chicago

Nikièma,, Florencia Sarmiento,Suzy H. Fair and Equitable Treatment: Why it matters and what can be done. International Institute for Sustainable Development, 2022. https://www.iisd.org/publications/brief/fair-equitable-treatment.

Wikipedia

{{cite report |last1=Nikièma, |first1=Florencia Sarmiento,Suzy H. |title=Fair and Equitable Treatment: Why it matters and what can be done |publisher=International Institute for Sustainable Development |date=16 November 2022 |url=https://www.iisd.org/publications/brief/fair-equitable-treatment |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{nikima2022fair, author = {Nikièma,, Florencia Sarmiento,Suzy H.}, title = {{Fair and Equitable Treatment: Why it matters and what can be done}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = nov, url = {https://www.iisd.org/publications/brief/fair-equitable-treatment}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }