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 facilitation.
· 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
UNCTAD
Palais des Nations, Geneva
Tel: +41
22 917 5797
www.unctad.org/diae
www.unctad.org/wir
(World Investment Reports)