Trade and Development Regional Forum 2016

Trends in IIA and ISDS: charting the way for IIA reform

22 September 201610:15

Ms Elisabeth TuerkChief, International Investment Agreements (IIA) Section,

Division on Investment and Enterprise, UNCTAD

The IIA universe continues to grow: The year 2015 saw the conclusion of31 new IIAs – 20 bilateral investment treaties (BITs) and 11 treaties withinvestment provisions (TIPs)

Trends in IIAs signed, 1980-2015

In 2015, investors initiated 70 known investor-State dispute settlement(ISDS) cases: A record high, and with a continued large share of casesfiled against developed countries

Known ISDS cases, annual and cumulative, 1987-2015

Source: © UNCTAD, ISDS Navigator

Argentina, Venezuela, and the Czech Republic, have been the mostfrequent respondent States

Most frequent respondent States, total as of end 2015 (Number of known cases)

Source: © UNCTAD, ISDS Navigator

The United States, the Netherlands, and the United Kingdom, have beenthe most frequent home States of investors bringing ISDS claims

Source: © UNCTAD, ISDS Navigator

Most frequent home States of claimants, total as of end 2015 (Number of known cases)

• Need for reform is evident from the heated public debate and parliamentary hearingprocesses in many countries and regions

• The question is not whether or not to reform, but about the what, how and extent ofsuch reform

• About 100 countries have used UNCTAD's Policy Framework and Roadmap toreview their IIA networks and about 60 have used them to design treaty clauses

There is a pressing need for systematic reform of the global IIA regime.UNCTAD’s Policy Framework and Road Map for IIA Reform are shapingreform objectives and approaches

http://investmentpolicyhub.unctad.org/Upload/Documents/POLICY_FRAMEWORK%2025_JAN_2016.pdf

In 2012 UNCTAD formulated the Investment Policy Framework forSustainable Development (Policy Framework), which was updated in2015.

UNCTAD Investment Policy Framework 2015

Source: ©UNCTAD, IPFSD 2015

The UNCTAD Investment Policy Framework offers options for nationaland international investment policy making

IIA reform is intensifying and yielding the first concrete results at thenational, bilateral, and regional level

Evidence of reform in recent IIAs: preserving the right to regulate, while maintaining protection

Source: © UNCTAD, IIA Mapping Project DatabaseNote: The numbering used refers to the policy options found in table III.1 of the 2015 version of UNCTAD’s Investment Policy Framework for Sustainable Development

Reform-oriented provisions in selected model IIAs

Evidence of reform at the national level: Most of the recent models include sustainable development-friendly clauses

Source: © UNCTAD, WIR16

Source: © UNCTAD, WIR16

Reform-oriented provisions in IIAs signed in 2015

Source: © UNCTAD, WIR16

Evidence of reform at the bilateral level: Most of the recently concluded BITs include sustainable development-friendly clauses

Charting the way forward: Phase 2 of IIA Reform.• A comprehensive reform requires a two-pronged approach: modernizing existing treaties and formulating

new ones. Although new treaty design is yielding important results for IIA regime reform, dealing with the

existing stock of IIAs remains the key challenge.• IIA reform has to address the challenge of increasing fragmentation.

The continuing experimentation in treaty making is beneficial, but ultimately only coordinatedactivity at all levels (national, bilateral and regional, as well as multilateral) will deliver an IIAregime in which stability, clarity and predictability serve the objectives of all stakeholders

In the absence of such a coordinated approach, the risk is that IIA reform efforts will becomefragmented and incoherent. IIA reform requires countries to intensify collaboration andcoordination between treaty partners to address the systemic risks and incoherence of the largebody of old treaties.

• UNCTAD stands ready to provide the necessary backstopping in this regard. UNCTAD’s Road Map for IIA Reform and its Action Menu on Investment provide key guidance for

reform. UNCTAD’s 2016 World Investment Forum that was held in Nairobi, Kenya discussed concrete

steps on how to carry IIA reform to the next level.

UNCTAD’s online databases: Helping researchers and policymakers inkeeping informed of the developments in an ever-evolving IIA regime

The IIA Navigator

•The world’s mostcomprehensive free IIAdatabase, with over 3.100investment treaties and modelagreements

•Allows for advanced searchesof IIAs by type, geography,status and full text

•Provides analysis on the latestpolicy developmentshttp://investmentpolicyhub.unctad.org/IIA

UNCTAD’s online databases: Helping researchers and policymakers inkeeping informed of the developments in an ever-evolving IIA regime(cont’d)

The Mapping Project

•A collaborative initiativebetween UNCTAD anduniversities worldwide to mapthe content of IIAs

•Over 1.400 IIAs have beenmapped to-date, for over 100features each

•Serves as a tool to understandtrends in IIA drafting, assess theprevalence of different policyapproaches and identify treatyexampleshttp://investmentpolicyhub.unctad.org/IIA/mappedContent#iiaInnerMenu

UNCTAD’s online databases: Helping researchers and policymakers inkeeping informed of the developments in an ever-evolving IIA regime(cont’d)

The ISDS Navigator

• A comprehensive andregularly updated collection oftreaty-based internationalarbitrations between investorsand States

• Contains essentialinformation about each case

• Offers user-friendly tools forsearching and filtering thedata

http://investmentpolicyhub.unctad.org/ISDS

UNCTAD’s publications: Analyzing the latest investment trendsand providing guidance and options for reform

http://unctad.org/en/PublicationsLibrary/wir2016_en.pdf

The World Investment Report

• UNCTAD’s flagship publication

• Each year's Report covers the latest trends inforeign direct investment around the world andanalyses in-depth one selected topic related toforeign direct investment and development

UNCTAD’s events: Bringing investment stakeholders together

http://unctad-worldinvestmentforum.org/

The World Investment Forum

• A high-level, biennial, multi-stakeholdergathering designed to facilitate dialogueand action on the world’s key emerginginvestment-related challenges

• Provides a platform where a debate on“investment for development” can takeplace

• Seeks to promote investment flows thatcontribute to sustainable and inclusivedevelopment

• Brings together a broad coalition ofinvestment stakeholders at the highestlevel, who can influence the globalinvestment landscape

UNCTAD’s events: Bringing investment stakeholders together(cont’d)

THANK YOU!