Event organised in the UK parliament by The Trade Justice Movement, War on Want, Global Justice Now, Justice for Colombia and ABColombia together with the APPG on Human Rights (PHRG)
This event was well attended by parliamentarians to hear from the speakers: H.E. Roy Barreras, Colombian Ambassador to the UK, Tom Willis, Director of the Trade Justice Movement, Nick Crook, UNISON, and Louise Winstanley, Programme and Advocacy Manager at ABColombia
The event kicked off with an important intervention by Ambassador Roy Barreras, as he outlined some of the major impacts that ISDS was having in Colombia, explaining that Colombia wanted to withdraw from this mechanism or condition how it was used -in the case of all of its trading agreements. It had already done this with the Free Trade Agreement Colombia has with the USA – by qualify how it can be used.
He stated that the Colombian Government would issue an official note in the next couple of weeks to the UK Government indicting its wish to open discussions on ISDS with respect to the Colombia – UK Bilateral Investment Treaty. He outlined the importance of obtaining bilateral agreement on the changes in the light of the sunset clause that would come into effect if changes were made unilaterally.
Next up was Tom Willis from the Trade Justice Movement taking about the myths that have been built up over time around the impacts of withdrawing from the ISDS System and directing our attention instead to the results of the research that has been undertaken internationally.
Advocates present ISDS as the only grown-up game in town. Something which is crucial to have in place if a country wants to attract foreign direct investment (FDI). The first agreements with ISDS appeared in the 1950s and more than 2000 treaties currently in force contain the mechanism. Refusing ISDS, or withdrawing from the system, can be seen as backwards, excessively protectionist and economically suicidal.
Tom offers an alternative viewpoint. ISDS is unnecessary to attract investment. Many countries have rejected ISDS – including, in many instances, the UK. In fact, it is absolutely possible for a country to withdraw from agreements containing ISDS.
Firstly – ISDS is far from a vital precondition for attracting investment.
- The UK’s single biggest destination for investment is the USA, and of course there is no ISDS agreement in place between the UK and USA.
- Brazil is a thriving economy, the largest recipient of Foreign Direct Investment (FDI) in Latin America. It is also the only country in that region which has never signed a treaty containing ISDS.
- A 2020 meta-analysis of 74 empirical studies found that the effect of investment treaties on FDI is “so small as to be considered zero.”
Secondly, a wave of countries are currently rejecting ISDS. The system is in retreat.
- From 2020-2023 the slim majority of new international investment agreements (58%) either omitted or included a reformed version of ISDS. That included the Regional Comprehensive Economic Partnership (RCEP) – the world’s largest trade agreement which covers 1/3rd of the global economy.
- Under Trump, the USA rejected ISDS, and it was not included in the North American USMCA agreement.
- Since Brexit, the UK has signed bilateral trade agreements with Japan, New Zealand, Australia and more recently with India and the USA. None of thse have included ISDS.
Of course, you might say it’s one thing avoiding new ISDS treaties, and quite another actively reneging on existing commitments by withdrawing from agreements. Here again, the UK has recent form.
Last year (2024 – under the Conservative government) the UK withdrew from the Energy Charter Treaty – a massive international agreement containing ISDS – on the basis that, according to the government’s own press release: “Remaining a member would not support our transition to cleaner, cheaper energy, and could even penalise us for our world-leading efforts to deliver net zero.”
In the 5 years to 2023, states withdrew from 250 investment treaties. South Africa has terminated its investment treaties and seen the level of FDI go up. Ecuador terminated 16 treaties, India terminated 57. Pakistan, Tanzania, the Netherlands and Indonesia have all got in on the action. T
The only thing preventing the UK from working with Colombia to terminate this treaty – and indeed from terminating all its 80+ treaties containing ISDS – is imagination and political will.
Ending with the words of David Boyd, a former UN Special Rapporteur, who said: ISDS has become a major obstacle to the urgent actions needed to address the planetary environmental and human rights crises. The UK government should be showing leadership in tackling these crises, and an obvious first step is to engage in good faith with Colombia and others.
Finally, Louise Winstanley from ABColombia spoke outlining the major impacts and restrictions that ISDS was having on Colombia’s ability to build sustainable peace.
In 2016 Colombia signed a Peace Accord with the largest of the guerrilla groups the FARC removing over 13,000 combatants from the conflict. Today, 8 years on, according to the most recent UN Report over 90% of combatants remain outside of the conflict.
The Colombian Peace Accord took four years to negotiate, and it provides a roadmap for building sustainable peace, as it is designed to address underlying causes, as well as the impacts of the armed conflict. At the signing of the Peace Accord there were, at a very conservative estimate, over 10 million victims. And whilst this agreement didn’t end the conflict with all armed actors it did remove the largest of the guerrilla groups – the FARC-EP.
To implement a Peace Accord of this dimension and complexity, one that addresses rural reform, poverty, access to land and land restitution, illicit economies, human security, victims and transitional justice as well as reincorporation, requires time, the ability to make policy changes and a considerable budget. In 2017 it was estimated that implementation would cost U$ 42 billion.
Colombia’s fiscal situation following the signing of the Accord was strained by large-scale Venezuelan migration, low global prices for many of its commodities, the COVID-19 pandemic, and more recently the withdrawal of USAID.
The budget for the implementation of the Peace Accord was initially supported by many countries around the world including the UK who contributed to the UN Multi-Donor Fund for Peace, this fund has spent around $223 million on implementation projects, the EU also had a Trust Fund and the US has provided substantial financial support. Changes in the geopolitical context means that eight years on there is considerably less international funding to support Colombia. By far the largest part of the budget for implementation of the Peace Accord must be found by Colombia.
Colombia as of May 2025, faces 25 ISDS cases, each for claims running into millions of dollars. As a result, ISDS has two major damaging impacts:
- one is that it is a drain on the Colombian Budget
- two the threat of being sued has a chilling effect on policy changes that are essential to the implementation of the Peace Accord
A report published in 2023, when Colombia had 23 ISDS[i] cases against it. The sum total of the published amounts being claimed–the secrecy of these courts makes it difficult to obtain information – exceeded $13 billion, an amount equivalent to over 13% of the Colombian government’s annual budget.
One example of the impacts of ISDS is that of the Cerrejón coalmine in La Guajira, owned by multinational giant Glencore, a company registered on the London Stock Exchange. Cerrejón is the largest open pit coal mine in Latin America, it operates over the vast area of 170,503 acres. It has operated for 25 years and uses over 24 million litres of water a day, in a semi desert area where only 4% of the Wayuu have access to portable drinking water.
The mine wanted to expand exploitation of coal under the Bruno creek, this would mean d a stream, diverting the Arroyo Bruno a stream that flow through this semi desert area. The Wayuu took their case to the Constitutional Court it ruled in their favour.
Nevertheless, just before the Court published the decision Glencore tapped and diverted the river, cutting off the stream from its natural course Glencore is now suing the Colombian Government for this Court decision, using ISDS in international arbitration for US$489.2 million claiming that it impacts their commercial interests. Win or lose this case – Colombia will lose – because the cost of international arbitration alone, runs into 100s of thousands. This is the third ISDS claim that Glencore has made against Colombia.
Claims of this size freeze democratically elected government’s policies. N Colombia country that is seeking to build peace this can have dramatic impacts.
The Colombian President and the former Trade Minister both publicly stated Colombia needed to end ISDS. For the UK and Colombia, the ISDS mechanism is in the UK Bilateral Investment Treaty which contains a Sunset Clause – this means that – if the Treaty is ended unilaterally the Sunset Clause will come into effect – and it will continue to allow access to ISDS for MNC already invested in Colombia for a further 15 years. This is why it is essential that the UK agrees to Colombia’s request, and bilaterally ends the Investment Treaty. This Treaty is a separate agreement from the Trading Agreement.
[i] This is made up of the published figures being claimed. Not all of the amounts being claimed are published and the majority of documentation is kept secret.