Contact us

  • Nona Pelletier
    Media and Communications Officer

    · Phone: +1-(204)-958-7740
    · Cell: +1-(204)-962-1303
    · Fax: +1-(204)-958-7710
    · E-mail

Archives

Press Releases from 1996 to 1999 have been archived, please click here.

» Winnipeg, April 27, 2005

Experts call for new rules on businesses investing abroad

Time for outdated model of investment treaties to go

With $560 billion dollars flowing between countries, the International Institute for Sustainable Development (IISD) is calling for new international rules on foreign investment that address the development, environmental and human rights concerns that lie at the heart of sustainable development.

Guests gathered today at the Commonwealth Secretariat in London to celebrate the launch of this important international initiative at an event hosted by the Deputy Secretary-General Mrs. Florence Mugasha. Guests, including members of the London diplomatic corps and leaders in the international investment field, were on hand for the release of the proposed international treaty.

In her opening remarks, Commonwealth Deputy Secretary-General, Mrs Florence Mugasha highlighted the importance of trade and investment issues. She said these "are potent vehicles for accelerated development of member states". She welcomed the inclusive approach adopted by the IISD and commended the Model Agreement for consideration by Commonwealth member states.

IISD's Model International Agreement on Investment for Sustainable Development comes at an opportune moment.

Investment from abroad plays an increasingly significant role in many economies world wide. This foreign investment must contribute to local poverty alleviation and environmental improvement, but there has been no effort to date to make international investment agreements achieve these goals.

In the absence of a single international set of rules, more than 2300 bilateral investment treaties have arisen to fill the vacuum. This patchwork of bilateral treaties has failed to meet the broader challenges that increased global investments face, including poverty alleviation, resource depletion, human rights violations, and corruption.

"The current model of investment agreements was developed in the international economic climate of the 50's and 60's, which was characterized by a fear of communism and the impacts of decolonization on business interests," explains Dr. Howard Mann, Senior International Law Advisor for the International Institute for Sustainable Development.

"Given this focus, the agreements in the past have focused on just one aspect of the investment process - the protection of foreign capital and investments."

"While this may have been appropriate for the time, this goal no longer meets the needs of the global economy in the 21st century," he added.

Although there have been several high-profile attempts to negotiate a single universal treaty governing global investment – including through the United Nations, the Organisation for Economic Cooperation and Development and the World Trade Organization - such initiatives have met with sharp opposition from non-governmental groups and developing countries for their narrow focus on business and corporate interests.

IISD's model agreement addresses these shortcomings by setting out an ambitious but balanced agenda for a new multilateral effort, which would:

By developing and publishing its model investment agreement, IISD is seeking to provide new tools for negotiators of international investment agreements, especially from developing countries. IISD is also seeking to ignite debate amongst investors, developed and developing countries, and the public as to the appropriate international rules for governing trans-border business activity.

"Her Excellency Dr. Maleeha Lodhi, High Commissioner for Pakistan underlined the need for a new and balanced approach to international investment agreements. She said investment should be aimed at genuine sustainable development rather than mere growth. In this regard a revised model international investment agreement, which takes into account the aspirations of developing countries, is a good basis to work on."

"This bold new approach to international investment agreements will set an agenda to improve the negotiation climate and will move us away from the heavy handed 'take it or leave it' approach which has characterized investment negotiations in the past, while simultaneously moving us closer to sustainable development goals," says Mann.

Background Information

Further information

About IISD

The International Institute for Sustainable Development contributes to sustainable development by advancing policy recommendations on international trade and investment, economic policy, climate change, measurement and assessment, and natural resources management. Through the Internet, we report on international negotiations and share knowledge gained through collaborative projects with global partners, resulting in more rigorous research, capacity building in developing countries and better dialogue between North and South.

IISD's vision is better living for all-sustainably; its mission is to champion innovation, enabling societies to live sustainably. IISD is registered as a charitable organization in Canada and has 501(c)(3) status in the United States. IISD receives core operating support from the Government of Canada, provided through the Canadian International Development Agency (CIDA), the International Development Research Centre (IDRC) and Environment Canada; and from the Province of Manitoba. The institute receives project funding from numerous governments inside and outside Canada, United Nations agencies, foundations and the private sector