Investment Dispute Prevention and Management Agencies

This report analyzes Investment Dispute Prevention and Management Agencies (DPMAs), which are government bodies designed to mitigate investor-state disputes. The authors critique the assumptions used by international institutions to promote DPMAs and propose a typology to categorize these agencies based on their intervention point and operational logic. Through case studies of seven countries, the report highlights the diversity in DPMA design and warns of risks such as agency capture and the prioritization of investor interests over public policy goals.

• International institutions, including the World Bank, UNCTAD, and the OECD, have promoted DPMAs based on three questionable assumptions: that all foreign direct investment (FDI) has a positive development impact, that investment treaties and investor-state dispute settlement (ISDS) are necessary to attract FDI, and that disputes primarily result from government incompetence or coordination failures rather than tensions between competing interests.
• The report proposes a typology of DPMAs based on two characteristics: the point of intervention in a dispute and the legal/policy framework (logic) applied. This results in four categories: Aftercare Agencies (interest-based, pre-legal claim), Treaty Compliance Agencies (international law-based, focused on consistency), Litigation Management Agencies (international law-based, managing formal claims), and Administrative Review Agencies (domestic law-based, focused on lawfulness).
• DPMAs may pose risks to public interests because they often possess powers to override specialized agencies (e.g., those managing tax or environment). This can lead to a prioritization of dispute resolution over public goals, utilizing non-transparent tools such as waiving regulatory requirements, granting tax incentives, or renegotiating contracts.
• There is a risk of agency 'capture' and corruption within DPMAs, as they may operate outside normal government accountability structures and possess unusual powers to override other agencies. The report notes that some settlement agreements have been used to legitimize corrupt transfers from states.
• South Korea's Office of the Foreign Investment Ombudsman (OFIO), established in 1999, is a primary example of an aftercare agency. It focuses on attracting and retaining FDI by resolving day-to-day grievances through 'home doctors' and recommending regulatory reforms, rather than managing ISDS legal risks.
• Peru's Coordination and Response System for International Investment Disputes (SICRECI), created in 2006, functions as both a treaty compliance and litigation management agency. It maintains a database of ISDS agreements, provides capacity building for officials, and coordinates the state's legal defence.
• Brazil's Direct Investments Ombudsman (DIO), established in September 2016, is an aftercare agency linked to its Cooperation and Facilitation Investment Agreement (CFIA) program. It provides a 'single window' for investors and can establish grievance settlement bodies to recommend solutions, though it cannot compel other agencies to adopt them.
• Colombia's high-level government body (HLGB), created by Decree 1939 in 2013, serves as a litigation management body that also coordinates dispute prevention and recommends alternative settlement mechanisms.
• Myanmar's Investment Assistance Committee (IAC), established under the 2017 Investment Rules, combines aftercare and administrative review. It evaluates grievances based on whether the investor was treated in accordance with Myanmar law, but its decisions are non-binding recommendations to the Myanmar Investment Commission.
• The Dominican Republic's mechanism, centered in the Office of Administration of International Commercial Agreements and Treaties (DICOEX) following a 2015 decree, includes an early alert system and legal evaluations to avoid arbitration, particularly in sectors like tourism, mining, and energy.
• Costa Rica's Inter-Institutional Commission for the settlement of international trade and investment disputes (CISC), created by Decree N° 35452-MP-COMEX in 2009, is a litigation management agency that coordinates and monitors disputes and decides on the hiring of outside counsel.

APA

Bonnitcha, J., & Williams, Z. P. (2022). Investment Dispute Prevention and Management Agencies. International Institute for Sustainable Development. https://www.iisd.org/system/files/2021-10/investment-dispute-prevention-management-agencies-policy-discussion.pdf

Chicago

Bonnitcha, Jonathan, and Zoe Phillips Williams. Investment Dispute Prevention and Management Agencies. International Institute for Sustainable Development, 2022. https://www.iisd.org/system/files/2021-10/investment-dispute-prevention-management-agencies-policy-discussion.pdf.

Wikipedia

{{cite report |last1=Bonnitcha |first1=Jonathan |last2=Williams |first2=Zoe Phillips |title=Investment Dispute Prevention and Management Agencies |publisher=International Institute for Sustainable Development |date=January 2022 |url=https://www.iisd.org/system/files/2021-10/investment-dispute-prevention-management-agencies-policy-discussion.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bonnitcha2022investment, author = {Bonnitcha, Jonathan and Williams, Zoe Phillips}, title = {{Investment Dispute Prevention and Management Agencies}}, institution = {International Institute for Sustainable Development}, year = {2022}, month = jan, url = {https://www.iisd.org/system/files/2021-10/investment-dispute-prevention-management-agencies-policy-discussion.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }