International Investment Agreements
in UNCTAD’s World Investment Report 2010
New York University, 11 October 2010
Elisabeth Tuerk, UNCTAD Secretariat, IIA Section
UNCTAD Division on
Investment & Enterprise – DIAE
Flagships
World Investment Forum
(WIF):
Accra, Ghana (2008)
Xiamen, China (2010)
Doha, Qatar (2012)
World Investment Report (WIR):
2010 20th Anniversary Edition:
“Investing in a low-carbon Economy”
Earlier topics included:
- Agriculture (2009)
- Infrastructure Challenges (2007)
- Internationalization of Research &
Development (2005)
- Services (2004)
UNCTAD World Investment Forum
2010 Xiamen, China
UNCTAD World Investment Forum
2010 Xiamen, China
• 1,800 participants
120 countries & 16 international organizations: 9 heads of states,
4 heads of IOs, 79 ministerial-level officials, 116 senior business
executives & > 250 other senior representatives from public &
private sector
• Key meetings
- World Leaders Investment Summit
- Ministerial Round Table
- Investment Advisory Council
- High Level Tripartite Conference
- International Investment Agreements Conference
- Sustainable Stock Exchanges
- Investment Showcases
UNCTAD World Investment Report
2010
Table of Content:
-
Chapter I: Global Trends in
FDI
-
Chapter II: Regional Trends in
FDI
-
Chapter III: Recent Policy
Developments
-
Chapter IV: Leveraging
Foreign Investment for a lowcarbon Economy
-
Epilogue
National Policy Developments
National regulatory changes, 1992-2009 (per cent)
Source: UNCTAD database on national law and regulations
International Investment Policies:
2009 Trends
The IIA Regime: 2009 Developments
Trends of BITs, DTTs & other IIAs
Source: UNCTAD, based on IIA database
IIA Regime: 2009 Developments
• In 2009, 211 new concluded IIAs
- 82 bilateral investment treaties (BITs)
- 109 double taxation treaties (DTTs)
- 20 IIAs other than BITs and DTTs.
• On average about 4 new agreements per week
• End of 2009: total of 5,939 IIAs:
- 2,750 BITs
- 2,894 DTTs
- 295 other IIAs
• South-South dimension: 19 of the 82 BITs between
developing countries, 4 DTTs & 8 other IIAs.
BITs & Other IIAs:
Trends in Rule-making
BITs:
• Mostly post-establishment & protection;
• A few: pre-establishment rights (e.g. Canadian BITs);
• New features to rebalance rights & obligations;
Other IIAs:
• Substantive investment chapters w. provisions usually
found in BITs;
• Limited investment-related provisions (market
access/establishment);
• Cooperation, e.g. creation of a consultative
committee or a institutional arrangements;
Other Developments 2009: EU
• Lisbon Treaty: certain competences for FDI were transferred
from member States to the European Union.
• European Court of Justice: certain BITs of three member States
(Austria, Finland and Sweden) violated the European
Community Treaty.
• July 2010:
- Communication entitled “Towards a comprehensive European
international investment policy”, COM (2010) 343 final
- Proposal for Regulations, COM (2010) 344 final
ISDS: 2009 Developments
50
400
45
350
40
300
35
30
250
25
200
20
150
15
100
10
5
50
0
0
2009
All cases cumulative
2008
2007
2006
2005
Source: UNCTAD, ISDS database
2004
Non-ICSID
2003
2002
2001
2000
1999
1998
1997
1996
1995
1994
1993
1992
1991
1990
1989
ICSID
Cumulative number of cases
Annual number of cases
Known investment treaty arbitrations (1989-2009)
ISDS: 2009 Developments
• With 32 new initiated ISDS cases in 2009 the total
raises to 357 cases;
• ICSID most frequently used: 225 cases;
• 81 countries involved in ISDS (end of 2009):
- 49 developing countries
- 17 developed countries
- 15 economies in transition
• 44 decisions have been rendered in 2009, raising the
total number of concluded cases to 164;
Systemic Evolution & Transformations
of the IIA Regime
Systemic Evolution of the IIA Regime
- Review of model BITs
- Termination of IIAs
- Renegotiation of BITs
- Modernizing treaty content
- Developments in the ISDS system
Model BITs
• Review process concluded:
Russian Federation, France, Colombia, Mexico, Austria &
Germany
• Review process under way:
Argentina, Venezuela, Ecuador, Morocco, Bolivia, South
Africa, Turkey, United States
• Reasons for review:
-
establish clearer rules
ensure consistency w. public interest
seek balance: investor & host country
adjust model to new developments
Termination of IIAs
• Ecuador: Jan 2008: intention to withdraw: Cuba,
Dom Rep, El Salvador, Guatemala, Honduras,
Nicaragua, Paraguay, Romania, Uruguay
• Ecuadorian Constitutional Court: 4 BITs
unconstitutional (ISDS; Germany, China, Finland &
United Kingdom)
• Ecuador: withdrew from ICSID Convention
• Bolivia: ICSID withdrawal, renegotiation of BIT w.
Netherlands
• Russian Federation: official notification of its
intension not to become Contracting Party of
Energy Charter Treaty (ECT)
Renegotiation of BITs
• 19 BITs were renegotiated in 2009 = 1/4 of
concluded BIT
• Czech Republic is the most active country
(15 renegotiated BIT  accession to the EU)
• Several BITs have been replaced by broader
economic agreements with a BIT-like chapter
• Renegotiation on regional level: ASEAN replaced its
investment agreement by the ASEAN Comprehensive
Investment Agreement in 2009
Modernizing Treaty Content
• Clarifying the scope of the treaty
• Introducing general exceptions that allow more room
for regulation by the host economies
• Clarifying the scope & meaning of specific obligations
• Adding environmental clauses
• Ensuring appropriate corporate behavior, including
with respect to environmental & social practices
Developments in ISDS System
• Refining ISDS provisions in IIAs:
- carving out certain areas from ISDS
- limiting claims in certain industries/clauses
- introducing a limitation period for IIA claims
• Increasing legitimacy & efficiency of ISDS in IIAs
- addressing frivolous claims
- consolidation of claims
- amicus curiae briefs
- improving transparency of arbitral proceeding
- making documents public (notice of intent, arbitral
awards)
- opening hearings to the public
Developments in ISDS System
• Review process:
- ICSID & Stockholm Chamber of Commerce: concluded
- ICC & UNCITRAL: ongoing
• Revision of international arbitration rules:
- increasing transparency in practice (ICSID)
- fostering independence & minimizing costs (ICSID)
- improving effectiveness (Stockholm)
• ADR & dispute prevention, avoidance & mediation polices
• Domestically:
- denouncing the ICSID Convention (Bolivia)
- excluding sectors from ICSID arbitration (Ecuador)
Chapter III - Key Messages:
• Rapidly growing network of IIA
• Rebalancing rights & obligation in
investor-State relations
• combining the benefits of investment liberalization &
protection with tangible contributions
• Dichotomy in investment policy trends
• further liberalization & promotion of FDI
• regulations in pursuit of broader policy objectives
Possible Future Direction:
Rebalancing
• allowing developing countries to effectively
benefit from FDI
– strengthen their productive & supply capacities
– maximizing business linkages
– ensuring that FDI-related benefits spill over to the
local economy
Interaction
• enhancing the interaction between IIAs &
other public policy regimes
Creating a more Coherent, Balanced &
Effective IIA Regime:
• IIA language
– model provisions
• IIAs interpretation
– options include: guidelines for arbitrators,
interpretative statements, side letters,
declarations, mechanisms for informal scrutiny,
institutional support, appeals mechanism etc.
• More coordinated & collective approach
towards complex IIA issues
• Multilateralism:
– a tool to further common understanding
WIR Chapter IV: Leveraging Foreign
Investment for a Low-carbon Economy
IIAs & Climate Change
IIAs & Climate Change –
double edged nature of IIAs
IIAS can contribute to
climate change mitigation
by supporting
government’s endeavours
to attract low-carbon FDI
Constraints on government
policies: Investors hampered
by domestic climate change
measures may bring claims of
violation of IIA provisions.
Securing IIAs’ Contribution to Climate
Change Mitigation
Introducing
climate-friendly
provisions into
future IIAs
low-carbon inv.
promotion,
environmental
exceptions,
institutional
linkages
Creating a
multilateral
understanding
Leveraging
IIAs
to ensure
coherence of IIAs
with global &
national climate
change policies
United Nations Climate Change
Conference 2010, Bonn
Thank you for your attention!
Elisabeth.Tuerk@unctad.org