Objectives and Principles of Operation of the Advisory Centre
The envisaged Advisory Centre aims to strengthen the capacity of States and regional economic integration organizations (REIOs) in preventing and handling international investment disputes, with a particular focus on least developed countries (LDCs) and developing countries. The Advisory Centre’s main objective is to provide technical assistance and capacity building to LDCs, developing countries, and REIOs.
Article 3 of the draft statute outlines the key principles that would govern the operation of the Advisory Centre, including effectiveness, affordability, financial sustainability, independence, and cooperation.
The Advisory Centre aims to establish a sustainable financial structure. However, the financial aspect seems to be one of the major obstacles to the project’s successful launch, especially since it is intended to benefit LDCs and developing countries by providing affordable services. Financial stability is essential because the Advisory Centre is expected to operate independently and free from external influence, including from its donors. The financial obligations of the Advisory Centre’s members are yet to be elaborated, but it is considered crucial that its financial structure is transparent and avoids any potential conflict of interest.
Further, the Advisory Centre is expected to provide additional value to the already existing services instead of duplicating them. This means that it should collaborate and coordinate with other international organizations working in the field of investment law, such as UNCTAD, ICSID, and OECD. This would enable the Advisory Centre to optimize its services by focusing on the areas that its members cannot access at reasonable rates from other sources.
Membership and Structure
In the current draft statute for the Advisory Centre, the membership criteria are outlined in draft Article 4. The Advisory Centre would be open to both States and REIOs. While it would primarily operate for its members, draft Article 6(3) of the statute allows non-members to access the Advisory Centre’s services. However, such participation would be limited to the exchange of information and the sharing of best practices for higher participation fees. This excludes the possibility of receiving tailored advice. In summary, non-members can access the Advisory Centre’s services only with the approval of the Executive Director, and their objectives should align with the Centre’s objectives.
During its forty-seventh session, the Working Group decided to establish a three-tier structure for the Advisory Centre. The structure will comprise a Governing Committee, an Executive Committee, and a Secretariat headed by an Executive Director. The functions assigned to each body have already been determined.
The Governing Committee has various responsibilities, which include appointing members of the Executive Committee while taking into account geographical diversity and gender balance. The Executive Committee is made up of six members, including the Executive Director ex officio, and these six members are nominated by the members of the Advisory Centre based on their professional qualifications in international investment dispute resolution. The Executive Committee is responsible for advising the Executive Director, supervising the administration of the Secretariat and performing other functions assigned by the Governing Committee.
Additionally, the Governing Committee evaluates and monitors the performance of the Centre, approves the annual report (which is prepared by the Executive Director), adopts the rules of procedure, adopts the regulations on the operation of the Centre, and, most importantly, appoints the Executive Director.
The Executive Director would lead the Secretariat of the Advisory Centre. The Secretariat will be responsible for managing the daily operations of the Advisory Centre, representing it, recruiting and managing the Secretariat staff, preparing the annual budget, which will be reviewed by the Executive Committee, and preparing the annual report for the Governing Committee’s approval.
Lastly, the Executive Director is expected to perform his or her duties independently. The Executive Director should not hold any other employment or engage in any other occupation without the approval of the Executive Committee.
Functions and Services Offered by the Advisory Centre
The Advisory Centre has been projected to offer two types of services. Firstly, it would provide technical assistance and capacity-building services. Secondly, it would offer legal advice and support related to international investment dispute proceedings.
Technical Assistance and Capacity-Building
Paragraph 1 of Draft Article 6 provides a detailed list of services that the Advisory Centre would offer, including advising on issues related to dispute prevention, training on possible means of preventing and resolving disputes, holding seminars and conferences, functioning as a forum for the exchange of information and sharing of best practices, functioning as a repository for information and related sources, and performing any other functions assigned to it by the Governing Committee.
The Advisory Centre is expected to collaborate with other individuals or entities to provide the above-mentioned services, as the draft statute clarifies the cooperative nature it is meant to cultivate.
Legal Advice and Support with Regard to International Investment Dispute Proceedings
Draft Article 7 outlines the Advisory Centre’s role in providing legal support and advice for any international investment dispute proceedings that may be brought or are expected to be initiated. The services that the Advisory Centre will provide include:
- conducting a preliminary assessment of the potential case and recommending appropriate means to resolve the dispute;
- assisting in the selection of mediators, arbitrators, or other types of adjudicators, as well as experts, taking into account geographical diversity and gender balance while making such selections;
- supporting the preparation of statements, pleadings, and evidence, as well as other aspects of the proceedings;
- representing the member in the proceedings, including in a hearing, possibly in conjunction with a team of the member;
- facilitating the appointment of external legal counsel to provide the above-mentioned services;
- undertaking any other duties assigned to it by the Governing Committee.
The Advisory Centre is expected to offer its services throughout the entire proceedings’ lifecycle. To prioritize assistance, it has categorized countries under Annex I or Annex II of the Protocol as LDCs or developing countries. Members from the same group will receive priority based on the order of their assistance requests.
If a non-member requests assistance, the Governing Committee will decide on a case-by-case basis whether the service would benefit the non-member and to what extent. Higher fees would apply to non-members.
The Working Group will continue deliberating on the draft statute of the Advisory Centre, the updated text of the draft guidelines on dispute prevention and mitigation, as well as the standing mechanism and the appellate mechanism during the forty-eight session scheduled for 1–5 April 2024 in New York.
