In November 2014, CCSI and IHRB co - convened a colloquium on policy, law, contracts, and sustainable development, with a particular focus on large - scale investments in the extractive industries and the agriculture sector. The colloquium provided an opportunity for practitioners to share information on their related work, as well as to reflect on current practices and remaining gaps regarding efforts to embed sustainability and human rights into large - scale deals.
Investments in the extractive industries and large-scale land-based investments in forestry and agriculture present similar opportunities for host governments to accelerate sustainable development, as well as comparable challenges to ensure that such investments do not serve as a source of corruption, rights abuses, or environmental degradation. In response to the challenges associated with ensuring successful and inclusive results from such large-scale investments, an increasing number of initiatives have sought to increase good governance over these types of investments. Yet, despite some perceived commonalities between the sectors, the good governance initiatives in respect of extractive industry investments and land-based (forestry or agriculture) investments are often distinct and sector-specific, with few attempts being made to examine how lessons learned from one sector could be applied to the other.
In July 2014, the United Nations Commission on International Trade Law (UNCITRAL) adopted the Mauritius Convention on Transparency that, if widely adopted, will do much to increase the transparency of investor-state arbitrations conducted under thousands of existing investment treaties and under any set of arbitration rules. This Policy Paper introduces the background and objectives of the Transparency Convention, provides commentary on each of its specific articles, and explains how the Transparency Convention can accomplish broad reform.
Critiques of investment treaties relate to the concern that tribunals' interpretations of these agreements depart from states' understandings of the texts, and do so in unpredictable ways leading to expensive litigation and unforeseen liability. States, however, can take steps to make their intentions regarding the texts clearer, and reduce the risk of uncertain outcomes. This policy paper discusses these possible steps, and the legal rules supporting them, providing guidance to states, attorneys, and tribunals regarding the important role of states in clarifying vague standards in and managing liability under existing investment treaties.
Economic accountants, who are responsible for measuring gross domestic product (GDP), and tax authorities, which are responsible for collecting tax revenues, face similar challenges with respect to multinational enterprises (MNEs): economic accountants want to know where within an MNE production is taking place and, thus, where to attribute GDP; tax authorities want to know where income from production is earned. Current global guidance on economic accounting and international taxation generally require transactions within MNEs to be recognized at market (or “arm's length”) values as if the transactions are taking place among unrelated entities. However, the values of transactions within MNEs may not reflect economic reality because related entities may exchange unique products with no active markets, and because MNEs may be structured with one or more entities that exist for purposes other than production. As a result, transactions within MNEs may distort economic accounting statistics and tax revenues.
The Canada - China bilateral investment treaty (BIT) – ratified by Canada on September 12, 2014, after a two - year delay following its signature in 2012 – provides a useful reference for future investment negotiations involving Canada or China and other countries.
The creation of the International Centre for Settlement of Investment Disputes (ICSID) is the boldest step in the modern history of international cooperation on the protection of foreign investment. I t has furthered the flourishing of arbitration between investors and states, itself one of the most progressive developments in international law of the past sixty years. Since Germany concluded the first bilateral investment treaty (BIT) with Pakistan in 1959, some 3,000 BITs have been concluded. Yet, there are reports that the European Union (EU), led by Germany, may exclude investor - state arbitration from the Transatlantic Trade and Investment Partnership (TTIP) with the United States (US), impairing the ubiquity of investor - state arbitration.
As the OECD Guidelines for Multinational Enterprises, first adopted in 1976 and updated for the fifth time in 2011, are approaching middle age, it is appropriate to reflect on how the use of the se far - reaching recommendations for responsible business conduct can be promoted in international investment agreements (IIAs). During the Guideline's almost four decades of existence, the landscape of the global economy has continuously evolved, and securing sustainable development has become a key international issue.
Peter Nunnenkamp, Julian Donaubauer, and Birgit Meyer
Publication Date:
10-2014
Content Type:
Policy Brief
Institution:
Columbia Center on Sustainable Investment
Abstract:
It is widely believed that a country's infrastructure is a critical factor in sustaining economic growth, promoting trade and attracting foreign direct investment (FDI). However, better data are required to assess the links between infrastructure, FDI and economic development. The available measures are either restricted to specific aspects of economic infrastructure, or they cover only a limited number of countries over a short period of time.
The Transatlantic Trade and Investment Partnership (TTIP) currently being negotiated between the European Union (EU) and the United States (US) could become the most comprehensive international agreement on free trade and investment protection. The negotiations have mostly been met with the usual criticism that accompanies attempts to expand free trade, despite overwhelming evidence that free trade fosters global economic development.