Dear Sir or Madam,
I wish to share with you the special topic of UNCTAD World Investment 
Report 2015: Reforming the International Investment Regime. As is evident 
from the heated public debate and parliamentary hearing processes in many 
countries and regions, a shared view is emerging on the need for reform of 
the International Investment Agreements (IIA) regime to ensure that it 
works for all stakeholders. The World Investment Report 2015 offers an 
action menu for such reform.
The key findings of the Report are:
1) Current IIA reform efforts can build on the lessons learned from almost 
six decades of IIA rule making. These lessons include the fact that: (i) 
IIAs "bite" and may have unforeseen risks, and protections/precautions 
need to be put in place; (ii) IIAs have limitations as an investment 
promotion and facilitation tool, but also underused potential; and (iii) 
IIAs have wider implications for national and international policies and 
regulatory coherence.

2) IIA reform should address five main challenges. It should aim at (i) 
preserving the right to regulate in the public interest so as to ensure 
that IIAs' limits on the sovereignty of States do not unduly constrain 
public policymaking; (ii) reforming investment dispute settlement to 
address the legitimacy crisis of the current system; (iii) expanding the 
effective investment promotion and facilitation dimension in IIAs; (iv) 
ensuring responsible investment to maximize the positive impact of foreign 
investment and minimize its potential negative effects; and (v) enhancing 
the consistency of the global IIA regime so as to overcome the gaps, 
overlaps and inconsistencies of the current system and establish coherence 
in investment relationships.

3) UNCTAD proposes a variety of policy options for meeting these 
challenges while examining their pros and cons: 
·       Preserving the right to regulate: Options include clarifying or 
circumscribing provisions such as most favoured‐nation (MFN) treatment, 
fair and equitable treatment (FET), and indirect expropriation, as well as 
including exceptions, e.g. for public policies or national security.
·       Reforming investment dispute settlement: Options include (i) 
reforming the existing mechanism of ad hoc investment arbitration while 
keeping its basic structure  (e.g. improving the arbitral process, 
avoiding frivolous claims), ii) adding new elements (e.g. building in 
alternative dispute resolution or introducing an appeals facility), or 
(iii) replacing existing ad hoc investment arbitration systems (e.g. 
establishing a standing international investment court, or relying on 
State‐State dispute resolution).
·       Promoting and facilitating investment: Options include adding 
inward and outward investment promotion provisions (i.e. host‐ and home‐
country measures), as well as joint and regional investment promotion and 
·       Ensuring responsible investment: Options include adding "not 
lowering of standards" clauses and establishing provisions on investor 
responsibilities, such as clauses on compliance with domestic laws and on 
corporate social responsibility.
·       Enhancing the consistency of the global IIA regime: Options 
include improving the coherence of the IIA regime, consolidating and 
streamlining the IIA network, managing the interaction between IIAs and 
other bodies of international law.

4) In terms of process, IIA reform actions should be synchronized at the 
national, bilateral, regional and multilateral levels. In each case, the 
reform process includes (i) taking stock and identifying the problems, 
(ii) developing a strategic approach and an action plan for reform, and 
(iii) implementing actions and achieving the outcomes.

5) Reform efforts should be guided by the goal of harnessing IIAs for 
sustainable development, focusing on the key reform areas and following a 
multilevel, systematic and inclusive approach.

6) In the absence of a multilateral investment system, given the huge 
number of existing IIAs (over 3,270 treaties), the best way is to 
collectively reform the regime with a global support structure. Only a 
common and systematic approach will deliver an IIA regime in which 
stability, clarity and predictability help achieve the objectives of all 
stakeholders: effectively harnessing international investment relations 
for the pursuit of sustainable development.

With kind regards,

James Zhan
Director, Investment and Enterprise
Team leader, World Investment Report
Palais des Nations, Geneva
Tel: +41 22 917 5797 (World Investment Reports)