On 4 February 2026, parliamentarians, civil servants, experts, campaigners, academics, and community representatives gathered in the UK Parliament for a timely discussion on the growing dangers to global security posed by the Investor–State Dispute Settlement (ISDS) — a legal mechanism contained in international trade and investment agreements that allows foreign investors to sue governments in international arbitration outside domestic courts.

The event was hosted by the All-Party Parliamentary Human Rights Group,Trade Justice Movement and ABColombia, and was chaired by Fabian Hamilton MP. The participants highlighted how ISDS is increasingly being used not only to challenge initiatives to counter climate change, but also to undermine peace agreements, sanctions regimes, and the ability of governments to act in the national interests.

As the speakers emphasised, the imbalance embedded in ISDS t is an urgent political and human rights issue.

A System Built for Investors, not for the Public Interest

Lise Johnson, partner at Curtis, Mallet-Prevost, Colt & Mosle LLP, is an expert with direct experience representing governments in investment treaty arbitration. In the session, she gave a brief overview of the ISDS system, which provides investors the power to sue States under claims of unfair and unreasonable treatment, as outlined in ISDS provisions. However, corporations’ interpretation of these provisions varies greatly from State’s intentions– a State can implement measures they deem to be in good faith, mandated by international law. Yet if a company believes these measures could negatively impact its profits, it may label them “unreasonable” and sue the State.

Johnson stressed that even countries with strong legal systems are vulnerable. Governments may assume that abiding by the rule of law shields them from litigation — but ISDS claims show otherwise.

Investment treaties typically grant investors the power to sue States through international arbitration panels without the requirement to exhaust all national remedies. This means corporations can skip national courts altogether and immediately seek compensation through international tribunals. Such is the case of the West Cumbria coal mine, where investors decided to go straight to international arbitration and seek monetary compensation, instead of exhausting all domestic recourse. The consequences are stark: investors can claim not only for actual losses, but for future expected profits, turning public policy decisions into potential multi-billion-pound liabilities.

The UK alone has signed around 100 such agreements.

Aligning Investment policies with climate commitments

Lauge Poulsen, professor of international relations and law at UCL, focused on the conclusions of a 4-year process led by the OECD, in which almost 100 countries took part, assessing how to align investment treaties with climate priorities. For Poulsen, these consisted of three main concluding considerations that governments should incorporate if they wish to align their investment policies with climate priorities:

– Investment treaty policy is climate policy – just as any other policy (be it trade, finance, fiscal, industrial) considers the climate impacts it may have, so should investment policies.

– Foreign investment policy, aside from investment treaties, is being reformed to be aligned with climate priorities. Governments are aligning their export credit and insurance schemes, and many other areas of investment policy, to include climate considerations. In the UK, for example, UK export finance does not provide financial support for fossil fuels.

– The main priority for governments needs to be addressing existing investment treaties in order to align climate priorities.

Sanctions Under Threat

Tom Wills, Trade Justice Movement director, raised another concerning dimension: that ISDS claims are directly challenging States ability to safeguard national security, including impeding the use of sanctions. ISDS is currently being used by foreign investors around the world to challenge the freedom of countries to carry out independent sanctions policy. For the UK, sanctions are a tool that allows it to freeze assets and promote compliance with international law.

Tom provided the example of one investor, Michael Fridman, a Russian billionaire, who has reportedly brought an ISDS claim linked to sanctions imposed against him after the war in Ukraine broke out. Although we don’t know exactly the reasons for his suit (due to the fact these tribunals are highly untransparent and fail to disclose relevant information), we can guess. He is currently involved in four other claims, all of which are related to sanctions. Three of these are against Ukraine itself. The other is against Luxembourg, who he is suing for $16 billion for having frozen his assets. That is more than half of Luxembourg’s annual budget. It’s also more than Fridman’s entire net worth. 

Fridman is not the only individual to reach for the ISDS system to contest sanctions. There are 28 sanctions-related ISDS cases ongoing around the world that we are aware of, 24 of which are linked to Russia.

For Wills, if this trend continues, it could fatally undermine the use of sanctions as a tool for national security and expose governments to enormous public liabilities. For this reason, the UK government should follow international best practice and: 1. Refuse to sign new treaties containing ISDS, and 2. Terminate existing treaties where the government determines that the risks of ISDS – to national security, climate action, democracy and the rule of law – outweighs any potential benefits.

The West Cumbria mine – first ISDS case against the UK

Maggie Mason, from South Lakes Action on Climate Change, described how the West Cumbria coal mine project was opposed by large community mobilisations and environmental campaigns, leading to the domestic legal challenge by a UK High Court over its climate impacts, halting the mine’s planning permission. The Singapore owned West Cumbria Mine, despite withdrawing its application for planning permission, then challenged the decision through the ISDS provisions in the UK-Singapore Bilateral Investment Treaty in August 2025.  

UK–Colombia: ISDS Undermining Peace and Climate Commitments

As our readers know, ABColombia has been highlighting the negative effects ISDS provisions have on attempts to implement policies to phase out fossil fuels and address the climate crisis as well as, as it is the case of Colombia, furthering policies to achieve sustainable peace through the implementation of the 2016 Peace Accord.

Louise Winstanley, ABColombia programme and advocacy manager, stated that Colombia is one of the countries that is at the forefront in their attempt to promote climate change initiatives. At COP30, the Colombian environment minister declared that there will be no more fossil fuel concessions allowed in the Colombian Amazon, which encompasses around 42% of its total territory. However, this will only apply to new projects, not to existing ones – this is because ISDS poses a major obstacle to ending existing concessions.  Companies can sue for termination of their concessions even if the investment they have made is minimal, that is because they can sue for what the company calculates it would have made if it had exploited the concession for the full length of the term. The concession usually lasts 25 -30 years.

Louise also highlighted the rapidly growing number of ISDS claims against Colombia: 28 current cases, the vast majority from extractive projects – with a potential further 218 mining, gas and oil concessions that are covered by the ISDS provisions.

Louise also pointed at the obstacles ISDS poses to the Colombian peace process, and implementation of the 2016 Peace Accord, which provides a roadmap for sustainable peace, addressing underlying causes as well as the impact of the armed conflict. But she stressed that to implement a Peace Accord of this magnitude, it requires time, the ability to make policy changes and a considerable budget. Colombia’s fiscal situation has been strained by Venezuelan migration, low global prices for many of its commodities, the COVID-19 pandemic and, more recently, the withdrawal of USAID. Compounded by all of this, is the fact that ISDS claims drain the national budget, at a time when Colombia needs all of its resources to address the climate crisis and implement the Peace Accord.

Furthermore, Louise stressed, the burden for addressing the climate crisis lies with those biodiverse countries – like Colombia – that are the least responsible but are paying the highest costs – and whose budgets are some of the least robust. ISDS is not only a barrier to action on the climate crisis but also means a growing debt burden. Therefore, if the UK and Colombia wish to be global leaders in addressing the climate crisis, they need to negotiate an end the Colombia-UK Bilateral Investment Treaty and neutralise the sunset clause.

Multinationals benefiting from undue protection

The final speaker via video presentation was Elisa Morghera, UN Special Rapporteur on the promotion and protection of human rights in the context of climate change. She underscored how multinational corporations are benefiting from the unwarranted protections in ISDS when governments attempt to take climate actions. These companies are awarded compensation because of threats to their profits, including in circumstances where damages would not be normally available under national law. According to the figures she provided, the amounts being claimed    are roughly equivalent to the GDP of 45 of the smallest countries put together. This is because of a deep unequal system that favours private over public interests. In the context of the climate crisis, this imbalance is no longer acceptable, and it can be seen as a violation of human rights.

Elisa Morghera argued that that the costs related to ISDS are affecting the countries that are least responsible for the climate crisis. And this has a chilling effect, because it’s preventing countries from fulfilling their environmental and human rights international obligations. This, the Special Rapporteur indicates, has been made crystal clear by the International Court of Justice in its Advisory Opinion on state climate obligations.

For her, all States and the UN system must have a very immediate conversation about the need for deep reform of international investment law, as part of States’ duty to cooperate, as advised by the ICJ’s Advisory Opinion.

A recurring theme from all the speakers was that the risks posed by ISDS increasingly outweigh any supposed benefits.

Speakers noted that major investment flows occur without ISDS protections. For example, the UK’s top investment destination is the United States — yet no investment treaty exists. Countries such as Brazil have never adopted ISDS mechanisms, with no evidence of reduced investment.

The reality, participants argued, is that ISDS mainly benefits large multinational corporations and the legal industry that profits from arbitration claims.

Public Engagement and Political Pressure

In the Q&A session, speakers raised concerns about lack of transparency and access to information.

Lise Johnson confirmed that many ISDS proceedings, including the Cumbria case, contain no binding transparency provisions. Governments can choose to publish documents — but often do not.

Fabian Hamilton MP emphasised that one of the most effective tools remains direct political pressure: “People who are concerned should lobby their MPs in their constituencies. Ask them: what are you going to do in Parliament?”

MP Martin Rhodes echoed the need for wider public awareness, noting that the UK now faces non-transparent legal processes initiated by private actors.

Are there alternatives to ISDS protections for companies wishing to safeguard their investments?

The short answer is yes:

• They can take out insurance, which is costly but every one of us have to insure our houses and that’s also costly – it’s all relative.
• You also have long-term investments, such as in infrastructure, mining and natural gas projects, which are typically provided by concessions. These types of investment have a contract – contractual issues between the investor and the government – where you can include provisions that can safeguard your investment.
• Inter-state dispute resolution mechanisms – whereby clauses can be included to protect yourself against concerns over national security, for example (exceptions). 
• They can write certain provisions including ISDS into individual contracts but with clear limits on how they are used.

Reform or Exit?

Some of the discussion during the Q&A also focused on whether there is an option to reform   investment treaties rather than abandoning them entirely

To that, the panelists provided some alternatives:

• requiring investors to use domestic courts first
• strengthening the right of States to regulate
• removing vague standards like “fair and equitable treatment”
• limiting the ability of corporations to make claims linked to climate and security measures

ISDS provisions appear in both FTAs and BITs. When ISDS is embedded within an FTA, the procedure can become more complex. However, in the case of Colombia and the UK, ISDS exists solely within their BIT. This means that terminating ISDS would not require reopening or renegotiating the Andean FTA. Several speakers argued that the most straightforward approach is simply to end the Colombia–UK BIT.

As ISDS claims grow in number and cost, the urgency is clear: States must reclaim the ability to govern in the public interest without fear of being sued for protecting people and the planet.

If the UK and Colombia wish to be global leaders on climate and human rights, participants argued, confronting and ending ISDS must be part of that agenda.