Dr. Kyla Tienhaara:

Those are great questions. The number one action that governments can take to avoid disputes in the first place would be to stop giving out new exploration licences and permits. Ireland is already doing well on that by having a moratorium on offshore oil and gas. With other approaches to compensation, it depends very much on what kind of sector we are looking at. I have seen some interesting proposals in the US that would phase out coal plants through an auctioning system, so companies would voluntarily offer to close early and there are limits on compensation etc. That is largely under the assumption that the plants are domestic and there would not be another avenue to bring claims for compensation.

My main concern is that whatever fair kind of system is formulated, if an investor thinks it can get more from the arbitration system, it will pursue that action. That would inevitably influence negotiations, which is a key problem.