Investment Law and Policy

Investment Policy Brief 18, June 2019

Legitimacy Concerns of the Proposed Multilateral Investment Court: Is Democracy Possible?

Growing concerns in Europe about international investment regimes and investor-state dispute settlement systems pushed the European Union into pursuing the creation of an investment court system and a multilateral investment court. The European Union (EU) started this reform through the Comprehensive Economic Trade Agreement, the Vietnam-EU Free Trade Agreement, and by direct persuasion of other countries to start negotiations at the United Nations Commission on International Trade Law. Visible reasons for the change include concerns over the perception of a lack of transparency, coherence, and arbitrators’ partiality, all of which diminish the legitimacy of the multilateral investment court. Other reasons might be laid on the budgetary risks of more than 213 claims against EU countries. To address these legitimacy concerns, the EU wants to replace traditional party-appointed arbitrators with a two-tiered investment tribunal system comprised by a roster of members selected by the state parties on the treaty. This Essay argues that the creation of the multilateral investment court needs to follow democratic principles in order to be legitimate. History has shown us that the EU has abused its power in the past when implementing resolution systems. Foregoing negotiation, comment by member nations, and implementing a tribunal at its own behest has shown this. The EU multilateral investment court proposal has legitimacy deficiencies because the EU has relied on its power to impose its views so far, i.e. its proposal was not previously negotiated multilaterally amongst other member nations. It is thus possible that the appointment of the future judges to this court will likely be subject to the political constraints and veto that the International Court of Justice or World Trade Organization appointments suffer today. This could leave small economies at a disadvantage because they might be subject to permanent, politically biased judges. A superior solution would be to adopt better arbitrator disqualification rules, clear interpretation directives to avoid law creation, and stricter arbitrator qualifications.

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Investment Policy Brief 17, April 2019

Challenges of Investment Treaties on Policy Areas of Concern to Developing Countries

Country experiences have revealed that international investment agreements (IIAs) could have an adverse policy impact on various policy areas that are generally important for developing countries in relation to the achievement of their development objectives. This policy brief gives an overview of challenges resulting from IIAs to major policy areas of concern to developing countries. These policy areas include industrial policy, tax reform, handling debt crisis, the use of capital controls, intellectual property rights, public-private partnerships, and climate change action in relation to investment in clean technologies.

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South Centre Quarterly Report, January-March 2019

South Centre Quarterly Report, 1 January to 31 March 2019

This report summarizes the programmatic activities of the South Centre during the period 1st January to 31st March 2019. It is intended to provide information, organized by Program and themes, about recent developments in the areas covered by the South Centre’s Work Program and publications made and meetings organized or co-organized by the Centre to examine particular issues or to provide analytical support for international negotiations taking place in various fora. It also informs about external conferences and other meetings where the Centre has participated.

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Investment Policy Brief 16, March 2019

The Future of Investor-State Dispute Settlement Deliberated at UNCITRAL: Unveiling a Dichotomy between Reforming and Consolidating the Current Regime

Reform of investor-state dispute settlement (ISDS) is being deliberated at the United Nations Commission on International Trade Law (UNCITRAL) Working Group III, which will be meeting in New York between the 1st and 5th of April 2019. For several years, the ISDS regime has been under scrutiny from voices in both developed and developing countries. ISDS reforms have been addressed in multiple forums, including national, bilateral, regional and multilateral levels, such as the United Nations Conference on Trade and Development (UNCTAD). Reforms could include moving away from arbitration as the norm for dispute settlement between foreign investors and host states or end up by introducing adaptations that  might make arbitration in ISDS cases perform in a more acceptable way. Finding one-size-fits-all solutions in these deliberations is unlikely. Advancing relevant reforms would require full and effective participation of interested countries, equal opportunity for different points of views to be heard and integrated into the design of any potential outcome, and effective mechanisms to address any potential conflicts of interest within this forum.

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Investment Policy Brief 15, March 2019

UNCITRAL Working Group III: Can Reforming Procedures Rebalance Investor Rights and Obligations?

The work of the United Nations Commission on International Trade Law (UNCITRAL) provides an opportunity to rebalance the international investment regime – but only if the full gamut of key issues are identified. Requiring investors to uphold standards of responsible business conduct (RBC) is largely a function of substantive rights and obligations, but it also presents procedural dimensions that fall within the purview of the UNCITRAL process. This policy brief explores the issues and discusses possible options for reform.

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Investment Policy Brief 14, March 2019

Building a Mirage: The Effectiveness of Tax Carve-out Provisions in International Investment Agreements

The present policy brief analyses the language of taxation carve-out provisions incorporated in International Investment Agreements (IIAs), and its effectiveness with regards to restricting the protection and dispute settlement provisions of IIAs only to non-tax-related claims. It illustrates that even in cases where such carve-out provisions have been incorporated into IIAs, the broad language and lack of clarity in the drafting of such provisions have effectively allowed Investor-State Dispute Settlement (ISDS) tribunals to scrutinize tax measures adopted by States, and even determine that such measures resulted in a breach of State’s obligations under the agreement. It makes recommendations on how States could effectively implement such carve-outs when negotiating, reforming or drafting new international investment agreements.

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South Centre Quarterly Report, October-December 2018

South Centre Quarterly Report, 1 October to 31 December 2018

This report summarizes the programmatic activities of the South Centre during the period 1st October to 31 December 2018. It is intended to provide information, organized by Program and themes, about recent developments in the areas covered by the South Centre’s Work Program and publications made and meetings organized or co-organized by the Centre to examine particular issues or to provide analytical support for international negotiations taking place in various fora. It also informs about external conferences and other meetings where the Centre has participated.

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Investment Policy Brief 13, December 2018

IP Licence, Trademarks and ISDS: Bridgestone v. Panama

Can an intellectual property right or a license authorizing its use be deemed an ‘investment’ under bilateral investment treaties? This policy brief discusses the arguments submitted by the parties in the Bridgestone Licensing Services, Inc. and  Bridgestone Americas, Inc. v. Republic of Panama case on questions regarding a trademark license agreement. Bridgestone Licensing Services, Inc. (BSLS) and Bridgestone Americas, Inc. (BSAM) together initiated arbitration proceedings on the grounds that Panama’s Supreme Court decision was unjust and arbitrary, violated Panama’s obligations under the United States-Panama Trade Promotion Agreement (TPA),  expropriated their investments, and violated the requirement of fair and equitable treatment (FET) to BSLS’s and BSAM’s investments.

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Investment Policy Brief 12, December 2018

Investor-State Dispute Settlement: An Anachronism Whose Time Has Gone

Investor-State Dispute Settlement (ISDS) – a mechanism that allows foreign investors to bring claims against host governments to an international arbitral tribunal – is a relic that should be abolished. Its alleged benefits have not materialized and its costs – monetary and other – can represent a formidable obstacle to good economic governance. We recommend policymakers to terminate ISDS provisions in existing agreements and eschew them in future trade and investment treaties.

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South Centre Quarterly Report, July-September 2018

South Centre Quarterly Report, 1 July to 30 September 2018

This report summarizes the programmatic activities of the South Centre during the period 1 July to 30 September 2018. It is intended to provide information, organized by Program and themes, about recent developments in the areas covered by the South Centre’s Work Program and publications and meetings organized or co-organized by the Centre to examine particular issues or to provide analytical support for international negotiations taking place in various fora. It also informs about external conferences and other meetings where the Centre has participated.

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SC WIF 2018 Side Event, October 2018

Title:                             Reforms and Alternatives for the Future of the International Investment Treaty Regime; Views for the Way Forward

Date and Time:           Tuesday, 23 October 2018, 12:30-14:30

Venue:                         Room XXII of the Palais des Nations

Organizer:                   The South Centre

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