How will the IOMed prove its worth?
To establish its credibility as an effective international body for mediation, the IOMed must demonstrate its utility in three critical ways:
Mediating cases of international significance: Resolving disputes that holds international attention would provide global credibility and thereby attract other parties to use such services.
Establishing a consistent track record in amicably settling cases where parties agree to binding agreements.
Capacity to enforce mediated agreements: A major
criticism of the Singapore Convention on Mediation is that a party could
simply violate the mediated agreement without enduring a significant
consequence. The other party would only have the rather unappealing option of
seeking restitution through lengthy legal processes. Article
41 of the IOMed Convention includes a protocol that outlines the
conditions under which the mediated agreement shall be enforced. The effectiveness of this mechanism will depend on how the mediated agreements are negotiated
and structured. Once real-world examples emerge, experts will be better positioned to assess whether
the IOMed has addressed the fundamental shortcomings of the Singapore Convention.
Establishing legitimacy will take time. The IOMed’s progress should be monitored closely and critically assessed.
Why has the West remained absent from the IOMed so far?
The leaders of the Western world
were noticeably absent from the signing ceremony, apart from the Swiss
government who made a speech as
an Observer State. The response from the West in general has been rather muted.
Despite efforts to obtain official statements from the United States, Australia and the European Union, none had been forthcoming at the time of the article’s publication.
The establishment of the IOMed has been led by China, with a specific focus on improving the opportunities for the Global South to have a fair hearing in an international legal system traditionally dominated by the West. A representative from Hong Kong noted that the IOMed “features a higher representation from the Global South and developing countries, filling a longstanding gap in the international dispute resolution landscape”. This will be especially evident in the Governing Council, where the Global South will have a leading role in shaping the IOMed into the future. Considering the amount of investment China has undertaken in Global South countries – especially through projects like the Belt and Road Initiative (BRI) – establishing an international mediation body is a logical step toward managing international commercial and investor disputes.
Some legal experts from the West
have been quite sceptical of the IOMed. Julian Ku, a law professor from
Hofstra University, argued that the IOMed is nothing more than a “global PR push to make it seem like
China is offering a different way to resolve global disputes” without actually developing an institution of substance. Others
see the IOMed as an example of China pursuing global leadership through an
alternative or parallel international organisation. Regardless, the West will
be watching the IOMed closely to see if it will evolve into a widely used
forum for international mediation, especially in commercial and diplomatic
disputes.
Should Australia join the IOMed?
Like its Western counterparts, Australia has so far not expressed any intention to join the IOMed. However, Australia’s signing of the Singapore Convention on Mediation under the Morrison government indicates a willingness to engage with international mediation frameworks. Furthermore, Australia has demonstrated pragmatism by participating in international initiatives where China is a central actor, including the Asian Infrastructure Investment Bank (AIIB) – despite vocal U.S. opposition – and the Regional Comprehensive Economic Partnership (RCEP).
For now, the Australian government seems to be taking a cautious "wait and see" approach.
The IOMed is still in its formative stages and there are
numerous other outlets for mediation services through platforms such as the
Singapore Convention or in ad hoc forms through international organisations
like the United Nations. The processes, rules and frameworks established by the
IOMed through the Governing Council and capacity building efforts, combined with an
examination of the processes and outcomes of its initial cases will help determine whether joining is worthwhile. As an open and voluntary international body, the IOMed does not require Australia to become a member in order to access its mediation services, as noted in Article 25 of the Convention. However, if Australia were to use mediation services
as a Non-Contracting State, it would be “subject to such rules as may be adopted
by the Governing Council,” which could limit Australia’s negotiating options.
If Australia were to join, it
would gain a seat on the Governing Council, allowing it to play a significant
role in shaping the mediation processes and rules within IOMed. If Australia
joins after the IOMed has been fully established, it will miss the opportunity
to influence its structural and operational foundations. Given that Australia’s
largest trading partner and many of its closest neighbours are members of the
IOMed, their participation may serve as a useful reference point when assessing
the potential relevance of Australia’s own membership. It should be noted that
Australian firms could voluntarily choose to participate in mediation within
the IOMed framework without Australia being a formal member (Article
27). However, an Australian presence on the Governing Council could offer
indirect benefits to firms engaging with the IOMed.
The Port of Darwin: A potential test case?
The IOMed presents
possible opportunities for the Australian government to achieve amicable and
stable outcomes through mediation with China and other neighbouring states. For
instance, the IOMed could serve as a platform to facilitate negotiations over
the termination of the 99-year lease of the Port of Darwin to the Chinese-owned Landbridge Group.
The Australian government does have disinvestment powers based on national
security grounds or if the Port of Darwin is deemed as critical infrastructure.
However, Landbridge could make such a process
quite difficult through the terms of its lease agreement and protections under the China-Australia
Bilateral Treaty (CABIT) and China-Australia
Free Trade Agreement (ChAFTA), potentially triggering investor–state
dispute settlement (ISDS) arbitration. Such a process would not only
prolong the process towards the end-goal of divestment, but it also has the
real possibility of significantly damaging relations with China.
Engaging in a mediation process has the potential for mutually beneficial outcomes for all parties – Australia regains control of the Port of Darwin and China’s new mediation initiative gains international legitimacy through a successful mediation case involving a noteworthy state actor. If the Albanese government encounters increasing resistance from Landbridge over relinquishing the port, mediation could become an attractive and pragmatic option.
Conclusion
The global scope and legitimacy of the International Organisation for Mediation (IOMed) will be determined by its ability to deliver impartial and effective outcomes for all parties involved in its processes. Achieving this will require expanding its membership and attracting participation from a diverse range of global actors, including international firms and organisations.
For Australia, the government will need to carefully consider both the opportunities and challenges that IOMed presents. Although Australia has not yet expressed interest in joining, early membership could offer the government a chance to shape norms, rules and procedures by taking an active role in the Governing Council. With many of Australia’s regional neighbours as founding members and China assuming a leading role, Australia’s stance on IOMed will serve as an interesting measure on how it seeks to engage with the global shifts currently unfolding.
