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Investment and SD: Cross-cutting Issues

Investment and Sustainable Development

• Investment and Sustainable Development: A Guide to the Use and Potential of International Investment Agreements (PDF - 1.3 mb)
  This book looks at the role international investment agreements have, and might have, in fostering sustainable development. Such an analysis is long overdue; it is becoming ever more widely accepted that the proper goal in attracting investment is quality, rather than quantity. In the end if investment does not increase well-being on a sustainable basis, it is not worth having, much less chasing.

• International Investment Agreements and Sustainable Development: Achieving the Millennium Development Goals (PDF - 316 kb)
  This paper starts from the framework of the Millennium Development Goals, and surveys the literature to see how these can be impacted, positively or negatively, by international investment agreements.

• This Commentary on the OECD's Draft Principles for International Investor Participation in Infrastructure (PDF - 68 kb)
  Underscores a range of IISD's concerns with the content of the proposed principles, as well as the process involved in developing them. The draft principles were first released for public comment on November 7, 2006, and were slated for discussion at the OECD Investment Committee meting on December 6-7. There is no clear process from that point on, though the OECD had previously expressed the intention to conclude all discussion and drafting at this December meeting. IISD believes the content of the draft principles is far from ready for final drafting, and that much work needs to be done to make them right. IISD's concerns can be summed up with a paraphrasing of John F. Kennedy's famous inaugural comment: Are these draft principles about what the developing countries can do for foreign investors, or about what foreign investors can do for developing countries? So far, it is the former approach that prevails.

• Bilateral Investment Treaties and Development Policy-Making (2004) (PDF - 345 kb)
  This paper looks at the impacts of bilateral investment treaties—of which there are now over 2,000—on development-oriented policy-making. It assesses the major elements of concern in the various formulations of key obligations, and the types of desirable policies they might prevent.

Re-thinking climate change as a sustainable investment regime

The international debate on investment rules has tended to assume a “natural” progression from bilateral to regional to broad multilateral rules. As the weaknesses of this progression become clearer from a sustainable development perspective, IISD believes that an alternative approach should also be considered. This would be to embed investment rules in environmental and other public goods-oriented agreements.

This approach has, in fact, been used twice to date; in the General Agreement on Trade in Services (GATS) and in the Energy Charter Treaty. Both sought to promote other goals—increased access of services and to energy—by providing clearer rights to foreign investors in these sectors. The Kyoto Protocol to the UN Framework Convention on Climate Change (UNFCCC) is an obvious candidate for the addition of investment rules designed to promote sustainable energy investment.

IISD can foresee the climate change regime evolving, at least in part, into an investment regime, aimed at stimulating investment in technology renewal and industrial transformation with a view to reducing greenhouse gas emissions.

Investment and international human rights

IISD is seeking to create partnerships that will bring the human rights and investment law communities together.

Initial research undertaken by IISD, with the sponsorship of the Swiss Department of Foreign Affairs, has shown how little forethought has gone into the relationship between the international human rights regime and the international investment regime. Further research and analysis is needed to identify the most constructive methods by which the twin goals of investor protection and human rights promotion and protection, may be made mutually compatible at the international level. In addition, some national law cases concerning the human rights practices of foreign investors abroad highlight the need for the conduct of foreign investors themselves to be better informed by human rights law and principles.

Further Reading

• International Human Rights in Bilateral Investment Treaties and in Investment Treaty Arbitration (PDF - 326 kb)

• South Africa's Bilateral Investment Treaties: Implications for Development and Human Rights (PDF - 490 kb)

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