It's not just rich countries who defend investor-state. This is from the Malaysian Ministry of International Trade and Industry, in the context of the TPP:
I. Investor – State Dispute Settlement (ISDS) and Sovereignty
- On the issue of ISDS, foreign investors are drawn to Malaysia not only by economic incentives, but also a transparent and predictable investment regime which allows recourse in the event of disputes. Likewise, we now have many private Malaysian companies who have become active overseas investors, driven by reasons such as securing market access, gaining access to raw materials, gaining strategic assets, brand and technology as well as decentralising of operations to diversify risks and improve returns, as Malaysia has relatively a small economy.
- Thus, ISDS is not only for foreign, but also Malaysian investors which are increasingly looking outwards. Furthermore, ISDS is not new to Malaysia as we have signed and ratified 64 Investment Guarantee Agreements (IGAs) since 1963 which also have provisions on ISDS.
- To date, only two cases have been taken against Malaysia under the ISDS, one of which has been decided in favour of the Government and the other is annulled. ISDS provisions have been used by Malaysian companies on two occasions to protect their investments abroad. In one case, the decision was in favour of the Malaysian investor and in the other, there was a settlement between the disputing parties.
- There are adequate provisions in the TPP that gives countries the policy space to adopt measures to fulfil specific purposes, including for environment, health and other regulatory objectives.
- Investor State Dispute Settlement (ISDS) mechanism is meant to give assurance to investors that in the event of a dispute, investors have recourse to international arbitration in addition to domestic courts. ISDS in no way infringes the policy freedom of a Government, it merely outlines the process by which a dispute over the underlining substantive principles in the Agreement will be arbitrated.
I wonder how important that third bullet point is for their view: Malaysia has not had to pay anything in these cases, while Malaysian investors abroad have used investor-state succesfully.