Reform of the Investment Protection Regime - Views and experiences from Developing Countries

On May 18, 2016 the Book Launch “Investment Treaties” – Views and experiences from developing Countries on the Reform of the Investment Protection Regime - took place at the UN library in Palais des Nations

The panelists were Prof. Carlos Correa, Special Advisor on Trade and Intellectual Property, South Centre, H.E. Mr Xavier Carim, Ambassador of South Africa to the World Trade Organization, Elisabeth Tuerk, Chief, International Investment Agreement Section, UNCTAD, and Kinda Mohamadieh, Research Associate, South Centre. The event was introduced by  Martin Khor, Executive Director of South Centre.

The debate on the implications of international investment treaties and the investor-state dispute settlement system has been intensifying and widening in the past years.

The authors have stressed that the problem of the investment protection regime is multilayered and complex and is rooted in various deficiencies : I. an imbalance in the provisions of the investment treaties (definition of investment and investor, free transfer of capital, right to establishment, protection from direct and indirect expropriation) which focus on the investor’ rights and neglect investor responsibilities; II. The wording of Treaty provisions, which allow expansive interpretation by arbitrators; III.The lack of transparency and available public information

As a result, there’s a growing consensus that the investment protection regime needs to be reformed.

States, both developed and developing, have been considering various reforms and potential alternatives, including through renegotiation or termination of investments treaties. This situation has been triggered by the states for the increasing exposure to claims by investors, who are turning to arbitration to challenge a wide range of government measures.

The distinguished guests addressed the strict relationship between foreign direct investment, investment agreement and economic development.

Elisabeth Tuerk in particular has highlighted that the policy framework described by UNCTAD in the World Investment Report 2015 recalls the investment improvement through the creation of the “International investment Courts”.

To the question “What can be done better?” the panelists responded that the first step would be to invest responsibly and the second one is to look at current treaties of India and South Africa as models.