IISD Model International Agreement on Investment for Sustainable Development

The IISD Model International Agreement on Investment for Sustainable Development is a proposed legal framework designed to replace traditional international investment agreements (IIAs). It seeks to balance the protection of foreign investors with the rights of host states to regulate for sustainable development, introducing binding obligations for investors and a reformed dispute settlement mechanism.

• The document argues that the existing model for international investment agreements, developed in the 1950s and 1960s, is outdated because it focused almost exclusively on the "protection of foreign capital and investments" and is now "divorced from this reality" of sustainable development.
• The Model Agreement establishes a balanced framework of rights and obligations across three parties: investors, host states, and home states. It specifically introduces investor obligations that are rarely articulated in existing agreements, including requirements for environmental and social impact assessments prior to establishment.
• Investors under this model are required to comply with environmental assessment screening and processes, as well as conduct social impact assessments, making these documents "public and accessible in the local community" before the investment is established.
• The agreement mandates specific post-establishment obligations for investors, including the maintenance of an environmental management system. Companies with more than 250 or 500 employees, or those in high-risk industrial or resource exploitation sectors, must hold "certification to ISO 14001 or an equivalent environmental management standard".
• The model introduces a mechanism for investor liability, stating that investors can be subject to civil actions in the judicial process of their home state for decisions that lead to "significant damage, personal injuries or loss of life in the host state".
• Host states retain the inherent right to take regulatory measures to ensure development is consistent with "the goals and principles of sustainable development". The agreement specifies that non-discriminatory regulatory measures designed to protect public health, safety, and the environment do not constitute "indirect expropriation".
• The proposed dispute settlement system replaces the traditional investor-state arbitration with a structured Dispute Settlement Body (DSB) consisting of a Council of the Parties, a panel division with a standing roster of 35 panelists, and an appellate division of nine full-time members.
• To prevent the abuse of arbitration, the agreement requires that investor-state disputes cannot commence until "domestic remedies are exhausted" in the host state, unless a panel finds that such remedies are unavailable or lack independence.
• The agreement includes strict anti-corruption provisions, requiring both home and host states to make the offering or acceptance of undue advantages to public officials "criminal offences" subject to enforcement and sanctions.
• The model proposes a 'single window' multilateral approach to replace the existing network of over 2,000 bilateral and regional agreements, suggesting that upon joining, pre-existing agreements between Parties shall be "deemed to be terminated by mutual consent".

APA

Mann, H., von Moltke, K., Peterson, L. E., & Cosbey, A. (2005). IISD Model International Agreement on Investment for Sustainable Development. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/investment_model_int_agreement.pdf

Chicago

Mann, Howard, Konrad von Moltke, Luke Eric Peterson, and Aaron Cosbey. IISD Model International Agreement on Investment for Sustainable Development. International Institute for Sustainable Development, 2005. https://www.iisd.org/system/files/publications/investment_model_int_agreement.pdf.

Wikipedia

{{cite report |last1=Mann |first1=Howard |last2=von Moltke |first2=Konrad |last3=Peterson |first3=Luke Eric |last4=Cosbey |first4=Aaron |title=IISD Model International Agreement on Investment for Sustainable Development |publisher=International Institute for Sustainable Development |date=April 2005 |url=https://www.iisd.org/system/files/publications/investment_model_int_agreement.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{mann2005iisd, author = {Mann, Howard and von Moltke, Konrad and Peterson, Luke Eric and Cosbey, Aaron}, title = {{IISD Model International Agreement on Investment for Sustainable Development}}, institution = {International Institute for Sustainable Development}, year = {2005}, month = apr, url = {https://www.iisd.org/system/files/publications/investment_model_int_agreement.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }