Since the early 1990s, countries across the globe have accelerated concluding bilateral and regional investment treaties at a dizzying pace. IISD monitors bilateral and regional investment negotiations and is actively engaged in addressing the sustainable development implications of the disputes that arise from this web of 3000 investment treaties.
The international investment framework consists today of a web of roughly 3000 investment treaties, including bilateral investment treaties between two states, regional agreements, and investment protection provisions in their free trade agreements . A key driver of these instruments has historically been the desire of developed, capital-exporting states to ensure that their nationals are financially and legally protected when investing in developing, capital-importing states. Consequently, the majority of investment treaties are between developed countries and developing countries or economies in transition, though this is slowly changing.
These treaties are not mere friendly diplomatic instruments, as some countries had first expected, but are actual treaties setting out hard legal obligations for the state hosting the investment and enforceable rights for the foreign investor.
The majority of the investment protection treaties still include potentially broad and vague standards, providing little legal certainty and allowing tribunals to interpret the standard in ways that significantly limit the governments’ regulatory powers.
IISD monitors the negotiation of investment treaties and the disputes initiated thereunder and works with developing country governments to develop their policies on investment treaties in ways that fulfill their sustainable development goals and limit negative impacts of international investment treaties on governmental law and policy making. IISD also works with parliaments and civil society to foster and deepen their understanding of investment treaty regimes. For more information on our capacity building work, please see here.
Investment Treaties and Why They Matter to Sustainable Development: Questions and answers
This handbook focuses on international treaties that guarantee standards of treatment for foreign investors. Today, there are literally thousands of investment treaties between governments, and many more are signed every year. Historically, developed countries pushed the agreements in order to provide an extra measure of legal protection to their domestic investors who sought to invest in riskier foreign territories abroad. Developing countries, a number of which were long resistant to certain principles and concepts embodied in the agreements, then incorporated them into their strategies for attracting foreign investment and capital into their territories. Developments over the past two decades have shown these to be powerful instruments, which play a big part in defining the relationship between host states and foreign investors. However, in their current form, they do little to promote sustainable development.
Commentary to the Austrian Model Investment Treaty
The commentary examines the Austrian Model Bilateral Investment Treaty (BIT) and compares recent developments in the use of BIT models in North America and Europe. The paper focuses, among others, on the Austrian Model BIT’s scope, definitions of “investment” and “investor,” umbrella and dispute settlement clauses, host country obligations, most favoured nation (MFN) and national treatment and obligations. Further topics include market access, expropriation and fair and equitable treatment (FET) provisions. Specific attention is given to BIT provisions addressing the environment, labour and sustainable development, and to the issue of transparency in investor–State dispute settlement. The paper commends the efforts to modernize the Austrian approach to international investment treaty negotiations, but also points out some still-existing key areas of concern and recommends ways to address problems in the nearly 70 existing treaties already concluded by Austria.
European Parliament hearing on Foreign Direct Investment
Nathalie Bernasconi-Osterwalder looks at some of the trends in the area of investment protection and dispute settlement, and at the investment treaty arbitrations Europe is facing. She identifies some of the main challenges that have become apparent in the area of investment protection and examines issues that have arisen in relation to the substantive rules contained in investment treaties and investor–State dispute settlement mechanisms. Drawing on the experience of countries like the U.S. and Canada, she outlines ways in which some of the main problems could be addressed in the European context.
Belgium’s Model Bilateral Investment Treaty: A Review
The paper gives a background on the International Investment Agreements (IIAs), notably on Bilateral Investment Treaties (BITs) and their development since 1959 when the first IIA was concluded. It presents an overview of the Belgian BITs and their specifics, and examines the scope of the Belgian Model BIT. A particular focus is placed on topics such as host country, home state and investor obligations, and on the provisions specifically addressing the environment, labour, and sustainable development. The paper contains a set of recommendations to help address the limitations of the current Belgian Model BIT.
Time for a Change—Germany's Bilateral Investment Treaty Programme and Development Policy » Mahnaz Malik, Associate IISD Analyzes the German BITs against the backdrop of the linkage between investment and sustainable development. The research appears as Friedrich Ebert Stiftung (FES) Occasional Paper 27, November 2006. The paper was presented at a meeting organized by FES in Berlin in December 2006.