TPP Investment Chapter: Re-edition of U.S. BIT, with ISDS carve-outs
A January 20, 2015 negotiating draft of the Investment Chapter of the Trans-Pacific Partnership Agreement (TPP) was leaked on March 25, 2015.
The TPP has been under negotiation for five years by Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States, and Vietnam. Since the draft texts are not shared with the public, interested observers must rely on periodic leaks.
Most of the latest leaked chapter is copy-pasted from the U.S. model bilateral investment treaty (BIT), with slight differences. Investment authorizations and contracts, normally within the scope of U.S. BITs, appear in square brackets, indicating that their inclusion is not yet confirmed. Performance requirements are broadly prohibited, but an exception covering “measures to protect legitimate public welfare objectives” was added. And states go as far as recognizing that voluntary corporate social responsibility should be encouraged.
Several negotiating countries carved out measures and sectors from the scope of investor–state dispute settlement (ISDS). Notably, a footnote expressly indicates that ISDS will not be available for use by Australian investors or against Australia. Yet the footnote is followed by an intriguing note: “deletion of footnote is subject to certain conditions.” It is not clear what Australia would trade for its anti-ISDS stance.