Exploring Investment Treaties’ Role in Advancing Gender Equality

IIAs are often seen as gender neutral, prompting debates about their suitability in addressing gender inequality.[1] This article advocates for a nuanced perspective, exploring the intricate relationship between IIAs and gender equality within the broader context of sustainable development since they could be interlinked with gender equality on multiple occasions. To begin with, certain IIAs limit a country’s policy autonomy by providing extensive rights to investors, which might hinder the government’s ability to adopt gender equality-promoting laws and policies. For instance, national treatment provisions restrict the formulation of policies that support domestic investors, potentially adversely affecting segments like small and medium-sized enterprises (SMEs), where women are notably represented. Another noteworthy aspect of IIAs that can affect gender considerations is the incorporation of ISDS. ISDS mechanisms empower investors to challenge government actions, potentially dissuading policies in the public interest, including gender-equality measures, that may clash with foreign investors’ interests. ISDS is also accused of contributing to the underrepresentation of women within the arbitration process itself. Additionally, IIAs can negatively influence gender equality in sectors with high female representation if they do not include provisions for improved labour standards, though some argue the inclusion of CSR clauses in recent IIAs could motivate companies to consider the societal impact of their actions on gender equality.[2] This paper aims to explore the appropriateness of IIAs as tools for advancing gender equality.

It is crucial to acknowledge that incorporating the SDGs into IIAs poses a significant challenge. The majority of the nearly 3,300 existing treaties that were concluded before the SDGs require updates to align with these goals. Moreover, the minority of IIAs that do refer to the SDGs do so merely in an aspirational and declaratory manner.[3] Instead, these treaties have vague rules that ignore the impact of foreign investment on local communities. For instance, the FET standard, which is found in most BITs, could allow foreign investors to challenge government initiatives aimed at rectifying unfair labour practices, for instance, using the vague terms “fair” and “equity” to favour the interests of investors over those of the public.[4]

Currently, over half of the current IIAs, known as “old-generation” treaties and signed approximately until 2010, make no reference to investor responsibilities and lack provisions for the environment, human rights, gender, health, and labour. In contrast, the newer generation of IIAs, including recent BIT models, mention sustainable development and contain specialized provisions addressing the state’s sovereign right to regulate, protection of human rights, and environmental protection clauses.[5] To bolster this emerging trend, UNCTAD’s Reform Package exemplifies calls for the legal reform of IIAs by adopting an Action Plan agenda to implement the UN Secretary-General’s Strategy for Financing the 2030 Agenda for Sustainable Development.[6]

Foreign investment does have an influence on gender equality specifically. Nevertheless, whether this influence is positive or negative depends partly on the IIAs’ arrangements implemented by the involved parties. One critical aspect, for example, could be the relationship between the existing legal structures of IIAs and a state’s policy space or legislative autonomy. The protective attitude of IIAs for investors could restrict the ability of states to utilize their legislative prerogatives to adopt gender equality-enhancing measures. To avoid being found in breach and accordingly having extra obligations to compensate investors through ISDS, host states, particularly those from developing countries, could avoid issuing specific legislation or adopting policies, including gender-sensitive legislation and policies.[7]

While IIAs may limit a country’s policy autonomy, investment contracts may have similar effects. A good example is when Zambia decided to privatize its mines in the 1990s to attract foreign investment through development agreements that included stabilization clauses, potentially holding the government liable for changes that affect mining companies’ rights. Meanwhile, the gender-equity laws imposed obligations on investors, mandating them to eliminate barriers to gender equity and to integrate gender in their strategies, with penalties for noncompliance. Examples of such legislative mandates included granting female employees 14 weeks of maternity leave, increasing operational costs for investors, and supporting women’s roles by hiring gender specialists. However, stabilization clauses acted as a hurdle to Zambia’s gender-equity goals, creating legal uncertainty and undermining policy coherence, though specific impacts on government policy-making remain challenging to assess.[8]

Given that women are proprietors of approximately 31% to 38% of SMEs, particularly in middle-income developing countries, IIAs could have a positive impact on gender equality if they supported SMEs.[9] However, IIAs usually include a national treatment clause, which is challenging for SMEs. These clauses require equal treatment for foreign and domestic businesses, which undermines governments’ ability to create inclusion in economic activities since some investors will challenge this government’s activity as violating the relevant IIA, thereby affecting women-owned SMEs. In the end, the national treatment clause would leave women-owned SMEs unable to compete with foreign investors who are often better equipped in terms of resources, money, technology, innovation, markets, and production scale. SMEs usually receive temporary assistance from their governments at startup`, which could no longer be provided considering the national treatment provisions of IIAs.[10]

Another relevant aspect to consider is that the lack of protection of developing host states’ regulatory space leaves such states exposed to costly ISDS proceedings and claims challenging public interest measures. Investor claimants rely on ISDS to make threats of claims to distort government measures, which in turn negatively impacts gender-sensitive laws, as explained above.[11] Given the impact of ISDS and the value of the resulting compensation, it becomes necessary to uphold public and democratic values in ISDS proceedings. This entails ensuring fair representation of the public in the decision-making processes. Particularly, a lack of gender equality can undermine the perceived legitimacy of the entire ISDS field, creating an impression of unfairness and partiality, and the ongoing failure to appoint women as arbitrators perpetuates systemic discrimination. Moreover, the absence of women arbitrators on a panel can detrimentally affect decision quality, as increased diversity has the potential to enrich the complexity of the decision-making process. In response to these concerns, UNCITRAL’s Working Group III recently started exploring potential reform to ISDS.[12]

Some foreign investors target regions with weak labour protections to arbitrarily manipulate the workforce in response to fluctuating demand.[13] Unfortunately, sectors characterized by insufficient labour safeguards tend to disproportionately employ women, exposing them to exploitative labour practices marked by challenging working conditions, job instability, lower compensation, and gendered pay disparities. For instance, in agriculture, where women make up an important part of the labour force, transnational corporations may contribute to existing gender disparities. The same applies to textiles, a sector mainly dominated by women.[14] Consequently, the surge in foreign investment, particularly in specific export processing areas for textiles, garments, and agriculture, may not necessarily enhance women’s rights due to persistent labour rights violations unless concrete actions are taken by both the public and private sectors at both national and international levels. The inclusion of robust labour standards in IIAs can be instrumental in advancing gender equality by ensuring fair and equal working conditions for women, particularly in these sectors.

Involving CSR provisions in IIAs would also enhance gender equality since it might induce MNEs to adopt practices that promote diversity in the workforce and equal pay, among others. As mentioned earlier, women are often found in industries such as agriculture, retail, and textiles, where they face challenges such as an absence of written contracts, part-time employment, and lack of permanent status. CSR implies that MNEs recognize and deal with the effects of their actions on women. Creating accountability involves setting ethical business standards, which are achievable through practices like assured social reports and an enforced code of conduct.[15] Ensuring compliance of MNEs with CSR provisions within IIAs can be facilitated through the requirement for MNEs to report on gender equality at an international scale. For example, within the UNCTAD Action Plan agenda, 70% of the globe’s largest MNEs, constituting a comprehensive cohort of 5,000 major companies, actively submitted reports to UNCTAD addressing gender equality. While the reports indicate ongoing gender imbalances at all levels, the act of reporting on gender equality in response to UNCTAD’s call promotes transparency, marking a positive move.[16]

All in all, it is clear that IIAs could serve as effective tools in advancing gender equality; however, very few IIAs touch on it. Leading examples include Canada’s Foreign Investment Promotion and Protection Agreement Model (2021 Model FIPA)[17] and the Dutch model BIT (revised in 2019).[18]  In its preamble, the Dutch model BIT explicitly recognizes the pivotal role of gender equality in the formulation, implementation, and review of measures related to international trade and investment.[19] This commitment is further underscored in the sustainable development clause, emphasizing the integration of gender equality for economic growth.[20] Notably, the clause highlights the significance of eliminating barriers to women’s participation in the economy and underscores the crucial role of gender-responsive policies in achieving sustainable development.[21] Moreover, the model mitigates criticisms related to ISDS by mandating the consideration of gender in the appointment of tribunal members to promote a more inclusive and fair adjudicative process.[22]

Canada’s model BIT has advanced even further, showing a stronger commitment to gender equality. It not only affirms this fundamental principle but also explicitly recognizes the right of host states to regulate to protect and promote gender equality.[23] This approach proactively addresses criticisms of the perceived absence of clear policy direction by the state, thereby ensuring a balanced framework that respects both investor interests and the regulatory authority of the host state. Furthermore, the Canadian BIT model guarantees that investors and their investments adhere both to local laws and international business conduct standards concerning gender equality. This can be seen as a distinct demonstration of commitment to CSR.[24] Similar to the Dutch BIT model, the Canadian model BIT incorporates diversity in arbitration by including provisions for appointing women.[25]

The Dutch and the Canadian model BITs are significant in that they not only emphasize the importance of incorporating a gender perspective to foster the economic inclusion of women[26] but also create the groundwork for a new generation of IIAs.[27]

Many voices have highlighted the importance of governments and relevant stakeholders considering specific key questions when seeking to enhance IIAs for a more balanced approach, particularly regarding gender equality.[28] These aspects include examining whether IIAs permit governments to enact laws and policies promoting gender equality, assessing the interaction between a government’s commitments to gender equality and measures safeguarding foreign investors, and considering the message conveyed by IIAs to investors, countries, and other stakeholders in terms of their impact on gender equality efforts.

To sum up, though recent IIAs have started to indicate positive changes, the explicit impact of investment treaties and foreign direct investment on gender equality still remains an area that requires further work. To maximize the benefits for women in terms of foreign investment, action is required from both the public and private sectors at both national and international levels, as the mere inclusion of gender provisions in IIAs doesn’t guarantee the implementation and enforcement of gender concerns at the firm, policy, or domestic legislative levels.[29]


Radwa Elsaman is an adjunct professor of law at Cornell Law School in New York and a policy and rule of law advisor specializing in the MENA region.


[1] Anderson, R. J. (2010). Promoting distributional equality for women: Some thoughts on

gender and global corporate citizenship in foreign direct investment. Women’s Rights Law Reporter, 32(1). https://scholars.law.unlv.edu/facpub/543

[2]Id. at 21. See also, Monterio, J.-A. (2021). The evolution of gender-related provisions in regional trade agreements (Staff working paper ERSD-2021-8). World Trade Organization Economic Research and Statistics Division.  See also, UNCTAD. (2020). World investment report 2020: International production beyond the pandemic, 203–204.

[3] Manjiao, C. (2018). Integrating sustainable development in international investment law: Normative incompatibility, system integration and governance implications, Routledge.

[4] Adhikari, B., King, J., & Santoso, L. P. (2022). A BIT of help? The divergent effect of bilateral investment treaties on women’s rights. Journal of Human Rights, 21(4).

[5] Coleman, J. (2020). Briefing note: Modern provisions in investment treaties. Columbia Center on Sustainable Investment. https://papers.ssrn.com/sol3/papers.cfm?abstract_id=4042195

[6] The Action Plan presents a range of policy tools to respond to the investment mobilization, including among others, mainstreaming the SDGs in national investment policy frameworks and in the international investment treaty regime (See generally, UNCTAD, supra note 2.

[7] Korzun, V. (2021). The right to regulate in investor-state arbitration: Slicing and dicing regulatory carve-outs. Vanderbilt Journal of Transnational Law 50(2), at 360. https://scholarship.law.vanderbilt.edu/vjtl/vol50/iss2/3/

[8] Ng’ambi, S. P. (2021). Stabilization clauses and implications for human rights and gender equality. Investment Treaty News. https://www.IISD.org/ITN/en/2021/06/24/stabilization-clauses-and-implications-for-human-rights-and-gender-equality-sangwani-patrick-ngambi/

[9] United Nations Human Rights Office of the High Commissioner. (2022). International investment agreements impacts on women’s rights. https://www.ohchr.org/sites/default/files/2022-06/International-Investment-Agreement-Impacts-on-Womens-Rights.pdf

[10] Id.

[11] Coleman, supra note 5.

[12] Tetrault-Provencher, J. (2020–2021). When equality can no longer wait: “From formidable women” to a gender-diverse pool of investment arbitrators. McGill Journal of Dispute Resolution, 7(3), 73–75

[13] United Nations Human Rights Office of the High Commissioner, supra note 9.

[14] Anderson, supra note 1.

[15] Id.

[16] UNCTAD, supra note 2.

[17] Government of Canada. (2021). 2021 Model FIPA. https://www.international.gc.ca/trade-commerce/trade-agreements-accords-commerciaux/agr-acc/fipa-apie/2021_model_fipa-2021_modele_apie.aspx?lang=eng#sec-a

[18] Netherlands Model Investment Agreement, March 22, 2019, https://investmentpolicy.unctad.org/international-investment-agreements/treaty-files/5832/download

[19] Id. at the Preamble.

[20] Id. at Clause 6 on Sustainable Development.

[21] Id.

[22] Id. at Clause 20 on Constitution and Functioning of the Tribunal.

[23] Government of Canada, supra note 17, at Clause 3 on Right to Regulate.

[24] Id. at Clause 16 on Responsible Business Conduct.

[25]Id. at Clause 30 on Arbitrators and Clause 54 on Disputes Between the Parties.

[26] De Brabandere, E. (2021). The 2019 Dutch Model Bilateral Investment Treaty: Navigating the turbulent ocean of investment treaty reform. ICSID Review – Foreign Investment Law Journal, 36(2) (2021), 319–338.

[27] Vargas Amaral, R., & Daza Jaller, L. S. (2023). Mainstreaming gender in investment treaties and its prevailing trends: The actions of MNEs in the Americas. In A. Bahri, D. López, & J. Yves Remy (Eds.), Trade policy and gender equality (pp. 194–212). Cambridge University Press. https://doi.org/10.1017/9781009363716.012

[28] Coleman, supra note 5.

[29] Id.