Print

Print




Karl P. Sauvant, PhD
Resident Senior Fellow

Columbia Center on Sustainable Investment*
Columbia Law School - The Earth Institute, Columbia University
435 West 116th St., Rm. JGH 825, New York, NY 10027
p(212) 854 0689 | cell: (646) 724 5600 e: [log in to unmask]
wwww.ccsi.columbia.edu | t: @CCSI_Columbia

* Formerly the Vale Columbia Center on Sustainable international Investment.

“The negotiations of the United Nations Code of Conduct on Transnational Corporations: Experience and lessons learned” and K. P. Sauvant and F. Ortino, Improving the International Investment Law and Policy Regime: Options for the Future are available at http://www.works.bepress.com/karl_sauvant/.



View this email in your browser

哥伦比亚大学国际直接投资展望中文版都可以在我们的网站查看:http://ccsi.columbia.edu/publications/columbia-fdi-perspectives.

Columbia FDI Perspectives

Perspectives on topical foreign direct investment issues
No. 157   September 28, 2015

Editor-in-Chief: Karl P. Sauvant ([log in to unmask])
Managing Editor: Adrian P. Torres ([log in to unmask])
 
Most governments are committed to sustainable development and responsible business conduct,[i] such as the protection of the environment, labor conditions and standards, the fight against corruption, and human rights. It is safe to assume that these governments also seek to attract foreign investors with protections offered in their international investment agreements (IIAs). It is less obvious, however, how these two policy objectives interact within international investment law.

Analyzing a sample of some 2,100 IIAs concluded by over 50 developed and emerging economies, it emerges that, although 47 of the 54 countries studied included some form of sustainable development or responsible business conduct language in at least one of their IIAs, a wide variation in treaty practice across countries exists. There is also a clear trend of including such references in recent IIAs: more than three-fourths of the IIAs concluded between 2008 and 2013 contain language on sustainable development or responsible business conduct.

Nevertheless, because references to sustainable development and responsible business conduct only began to be incorporated in 1985 with the inclusion of environmental concerns (labor standards were first introduced in 1990, anti-corruption in 2000, human rights in 2002), treaties without any sustainable development and responsible business conduct language continue to be prevalent. Only 12% of the sample IIAs contained language on these matters, and the distribution of this language was unequal – environmental protection was addressed in 10% of the treaties, followed by labor standards (5.5%), anti-corruption (1.5%) and human rights (0.5%). Moreover, the depth with which sustainable development and responsible business conduct issues were covered varied from a few words to extensive text of up to several pages.

Despite the relatively small number of IIAs containing responsible business conduct language, countries have adopted different approaches on how to introduce sustainable development and responsible business conduct issues in the context of treaties originally aimed at protecting investment. The survey identified nine different ways in which treaties referenced these concerns in terms of the parties’ legal obligations. These were, in order of frequency: (i) preamble language; (ii) language on preserving policy space; (iii) language discouraging loosening environmental or labor regulations to attract investment; (iv) language establishing that, in general, measures taken to protect public welfare objectives do not constitute indirect expropriation; (v) commitments to cooperate on responsible business conduct matters; (vi) language establishing a relation between responsible business conduct and the investor-state dispute settlement system; (vii) language establishing commitment to maintain or implement certain internationally recognized standards; (viii) language establishing a commitment to act against corruption; and (ix) language encouraging the respect of specific responsible business conduct standards, such as those contained in the OECD Guidelines for Multinational Enterprises.

Arbitration panels in investor-state disputes also included references to these same sustainable development and responsible business conduct issues. A survey of 1,113 treaty-based arbitration documents quantified whether arbitrators referred to issues beyond investment protection in their decisions. More than one in four decisions mentioned or, at times, extensively discussed, at least one of the four sustainable development and responsible business conduct issues identified in the first paragraph. Arbitral tribunals also referred to international agreements relevant for sustainable development and responsible business conduct when deciding arbitration cases: a total of 28 international agreements dealing with environmental protection, labor conditions and standards, anti-corruption, and human rights were cited in the sample of the 1,113 decisions.

Thus, there is evidence of growing interaction between investment treaty law and sustainable development and responsible business conduct. Governments are much more likely to refer to sustainable development and responsible business conduct concerns in IIAs, while arbitration panels also consider such concerns fairly frequently when dealing with investor-state disputes. 

However, reaping the full benefits of investment treaties for sustainable development will require that governments explore options for investment treaty language that protect their “policy space” not only in the policy areas surveyed here, but in all areas in which governments have a role in protecting the public interest. In addition, the dispute-resolution procedures that are inseparable from, and enforce, these commitments should be aligned with good practices in domestic investor-state disputes settlement. Avenues for reform include: ensuring that high standards of public sector transparency are respected in all treaty-based arbitration cases; boosting public confidence by aligning treaties’ dispute-settlement procedures with those of advanced domestic law systems; and either eliminating special treaty-based privileges for foreign investors that are not available to domestic investors or providing a persuasive policy rationale for these privileges.
 
* Kathryn Gordon ([log in to unmask]) is Senior Economist at the OECD; Joachim Pohl ([log in to unmask]) is Legal Expert; Marie Bouchard ([log in to unmask]) is lawyer and lecturer at Sciences Po Law School. This Perspective is based on Kathryn Gordon, Joachim Pohl and Marie Bouchard, “Investment treaty law, sustainable development and responsible business conduct: A fact-finding survey”, OECD Working Papers on International Investment (Paris: OECD, 2014), available at http://dx.doi.org/10.1787/5jz0xvgx1zlt-en. The authors are grateful to Cristian Rodriguez Chiffelle, Kate Miles and Andrew Newcombe for their helpful peer reviews. The views expressed by the authors of this Perspective do not necessarily reflect the opinions of Columbia University or its partners and supporters. Columbia FDI Perspectives (ISSN 2158-3579) is a peer-reviewed series.
[i] Responsible business conduct is a broad concept that focuses on two aspects of the business-society relationship: 1) positive contributions businesses can make to economic, environmental and social progress, with a view to achieving sustainable development, and 2) avoiding adverse impacts and addressing them when they do occur. See OECD, Responsible Business Conduct Matters: OECD Guidelines for Multinational Enterprises (Paris: OECD, 2013), pp. 6-7.
The material in this Perspective may be reprinted if accompanied by the following acknowledgment: “Kathryn Gordon, Joachim Pohl and Marie Bouchard, ‘Investment treaty law, sustainable development and responsible business conduct: A fact-finding survey,’ Columbia FDI Perspectives, No. 157, September 28, 2015. Reprinted with permission from the Columbia Center on Sustainable Investment (www.ccsi.columbia.edu).” A copy should kindly be sent to the Columbia Center on Sustainable Investment at [log in to unmask]
For further information, including information regarding submission to the Perspectives, please contact: Columbia Center on Sustainable Investment, Maree Newson, [log in to unmask].
 
Most recent Columbia FDI Perspectives 
  • No. 156, Robert Milbourne, “The case for harmonizing the international regulation of mining,” September 14, 2015.
  • No. 155, Wolfgang Sofka, Miguel Torres Preto and Pedro de Faria, “Foreign divestment: What stays when multinational leave?” August 31, 2015. 
  • No. 154, Srividya Jandhyala, “Bringing the state back in: India’s 2015 model BIT,” August 17, 2015.
All previous FDI Perspectives are available at http://ccsi.columbia.edu/publications/columbia-fdi-perspectives/

Other relevant CCSI news and announcements
  • CCSI kicked off it's Fall 2015 International Investment Law and Policy Speaker Series, co-sponsored by Crowell & Moring LLP and Baker & McKenzie LLP, last week. The next talk will be by Gabrielle Kaufmann-Kohler on October 1, 2015 at Columbia Law School, Jerome Greene Hall, Room 546 (435 W 116th Street, between Amsterdam and Morningside Avenues) from 12:10pm-1:00pm. For more information and the full schedule of talks, please see our website.
  • On October 7, 2015 at 10:30am, CCSI will launch OpenLandContracts.org, an online repository of land, agriculture, and forestry contracts. The repository provides the full text of contracts; plain language summaries of each contract’s key social, human rights, environmental, fiscal, and operational provisions; and options for searching and comparing contracts. The launch will feature a demonstration of the site, followed by a panel discussion on land contract transparency. Please see our website here for more details.
  • On October 8, 2015 at 6:30 pm, CCSI will be hosting the Attorney General of Ecuador, Diego García Carrión, who will give a presentation at Columbia Law School in connection with the launch of a book on the legal disputes between Chevron and Ecuador. The event will be followed by a reception. Registration is free, but required. Please rsvp here.
  • On November 10-11, 2015CCSI will host the 10th Annual Columbia International Investment Conference: “Investment Treaty Reform: Reshaping Economic Governance in the Era of Sustainable Development,” at Columbia University in New York. In light of the Sustainable Development Goals (SDGs) and multilateral efforts to catalyze Financing for Development, this year's Conference will look at steps countries have taken to reshape their International Investment Agreements (IIAs). Registration is free, but required. Please register here. Please check our website for more information.
Karl P. Sauvant, Ph.D.
Resident Senior Fellow
Columbia Center on Sustainable Investment
Columbia Law School - Earth Institute
Ph: 
(212) 854-0689
Fax: (212) 854-7946
Copyright © 2015 Columbia Center on Sustainable Investment (CCSI), All rights reserved.
[log in to unmask]

Our mailing address is:
Columbia Center on Sustainable Investment (CCSI)
Columbia Law School - Earth Institute, Columbia University
435 West 116th Street
New York, NY 10027

Add us to your address book


unsubscribe from this list    update subscription preferences 

Email Marketing Powered by MailChimp

____
AIB-L is brought to you by the Academy of International Business.
For information: http://aib.msu.edu/community/aib-l.asp
To post message: [log in to unmask]
For assistance: [log in to unmask]
AIB-L is a moderated list.