Investor-State Dispute Settlement Mechanism in International Trade and Its Impact on Public Health

Investor-state dispute settlement (ISDS) mechanism is an instrument of public international law which grants an investor the right to use dispute settlement proceedings against a foreign government. ISDS provisions are included international trade agreements, such as the North American Free Trade Agreement (NAFTA). If an investor from country "A" ("Home State") invests in country "B" ("Host State"), both States have agreed to ISDS and the Host State violates the rights granted to the investor under public international law, then that investor may raise the issue and bring the matter to an arbitration tribunal. There has been much debate concerning the impact of ISDS on the ability of governments to implement legislation and public policy concerning public health, environment protection and human rights.

This presentation will examine ISDS and its impact, or potential impact, on public health policy. The dispute of Apotex, Inc. v. United States of America under NAFTA will be used as a case study. Other examples will be presented, such as the Government of Australia’s passage of the Tobacco Plain Paper Packaging Act 2011 which is being challenged by Philip Morris Asia using the ISDS mechanism. The presenter will argue for a “carve-out” of ISDS challenges for public health decisions made by a Host State, which is in line with WTO Agreements that explicitly allow governments to take measures to restrict trade in pursuing national health policy objectives.