- •In addition, an iia should display a commitment to flexibility for development. In this context, flexibility denotes:
- •In that the shorter the period between the governmental act that needs to be disclosed and the date of such disclosure, the greater the extent of the obligation. 108
- •In the Barcelona Traction case, Judge Jessup, in his Separate Opinion, 133 stated the following:
- •Igbokwe, vc, ‘Determination, Interpretation and Application of Substantive Law in Foreign Investment Treaty Arbitration’, 23 j Int'l Arb 267 (2006)
- •Igbokwe, vc, ‘Determination, Interpretation and Application of Substantive Law in Foreign Investment Treaty Arbitration’, 23 j Int'l Arb 267 (2006)
- •Very detailed, technical aspects such as sanitary and phytosanitary measures and intellectual property rights.
- •Interest and Public Purpose (Ottawa, cd Howe Institute, Policy Study 44, The Border Papers, 2006)
- •Van Hecke, g, ‘Contracts between States and Foreign Private Law Persons’, 1 epil 814 (1992)
- •Interest and Public Purpose (Ottawa, cd Howe Institute, Policy Study 44, The Border Papers, 2006)
- •Van Hecke, g, ‘Contracts between States and Foreign Private Law Persons’, 1 epil 814 (1992)
- •1. In the event of any inconsistency between this Agreement and the specific trade obligations set out in:
- •Investment treaty practice of the usa and Canada. 66 For example, the us-Uruguay bit of 25 October 2004 states, by Article 3(1):
- •In this respect, the wto Appellate Body and the International Court of Justice remind us of the principle of effectiveness in treaty interpretation. 21 It is not
- •Impairment” standards, when] (I) similar cases are (II) treated differently (III) and without reasonable justification’. 84
- •Vicu?a, f Orrego, ‘Regulatory Authority and Legitimate Expectations’, 5 Intl Law Forum, 188m 193 (2003)
- •Vicu?a, f Orrego, ‘Regulatory Authority and Legitimate Expectations’, 5 Intl Law Forum, 188m 193 (2003)
- •In order to avoid possible free-riding behaviour within the gatt framework, the Protocol to the 1992 us-Russia bit provides for a specific exception which reads as follows:
- •In addition, the distinction between breach of contract and expropriation has become relevant in the related jurisdictional debate about contract versus treaty
- •It is on the whole undisputed that the prohibition of expropriation of foreign property, both under customary international law and under applicable treaty law, covers
- •In addition, other investment relevant instruments speak of ‘expropriations or other measures affecting property rights’. 81
- •In the recent Occidental case, the arbitral tribunal confirmed that:
- •Is required is at least a ‘substantial loss of control or value’ 181 or ‘severe economic impact’. 182 The difficulty again lies in establishing the exact level of interference.
- •In Phelps Dodge , the Iran-us Claims Tribunal expressly stated that even acceptable motivations would not change its view that certain measures had an expropriatory effect:
- •In the doctrines of necessity and force majeure, if they view compliance with either doctrine to be essentially empty.
- •In the doctrines of necessity and force majeure, if they view compliance with either doctrine to be essentially empty.
- •In one of the early nafta cases—Metalclad Corporation V The United Mexican States84—the arbitral tribunal was required to address this issue, essentially as
- •5. Review and Appeal
- •5. Review and Appeal
- •In this kind of provision, when a dispute settlement forum is selected, this choice is made to the exclusion of any other (electa una via, non datur recursus ad alteram).
- •In a subsequent request for participation as amicus curiae, the tribunal found that it could not open up the hearings to the petitioners without the parties' consent:
- •In addition to the provisions of nafta, disputing parties are also bound by the arbitration rules that the investor selects. 64 When bringing a claim against a
- •In the Notes of Interpretation of Certain Chapter Eleven Provisions issued by the Free Trade Commission on 31 July 2001, the Commission declared that:
- •In determining whether to accept a written submission, the Free Trade Commission recommends in paragraph 6 that a tribunal consider the extent to which:
- •In practice, there is also no doubt whatever that users of commercial arbitration in England place much importance on privacy and confidentiality as essential features of English arbitration. 122
- •Increased transparency and public participation may impact upon the principles of confidentiality and privacy that have traditionally been respected in international
- •Is real, and experience shows that facts relating to such relationships should be disclosed even when they arise in the course of the arbitration and not at the time of appointment.
- •Investment disputes in respect of the implementation of the provisions of this Law shall be settled in a manner to be agreed upon with the investor, or within the framework of the
- •In Ronald s Lauder V The Czech Republic , 69 the bit between the Czech Republic and the usa provided as follows: ‘At any time after six months from the date on
- •Vandevelde, kj, United States Investment Treaties: Policy and Practice (Deventer, Netherlands, Kluwer Law and Taxation, 1992)
- •Vandevelde, kj, United States Investment Treaties: Policy and Practice (Deventer, Netherlands, Kluwer Law and Taxation, 1992)
- •It will be recalled that under Article 25(2)(b) a ‘juridical’ national is:
- •In Tokios , the tribunal was faced with an objection to jurisdiction founded on the argument that the control test was the appropriate test for the purposes of Article 25.
- •Vicu?a, Francisco Orrego, ‘Changing Approaches to the Nationality of Claims in the Context of Diplomatic Protection and International Dispute Settlement’, 15 icsid Rev-filj 340 (2000)
- •Vicu?a, Francisco Orrego, ‘Changing Approaches to the Nationality of Claims in the Context of Diplomatic Protection and International Dispute Settlement’, 15 icsid Rev-filj 340 (2000)
- •In the end, however, the tribunal did not apply the clause and therefore it considered that there was no need to express any definitive conclusion as to whether the
- •In Eureko V Poland , 106 the Tribunal saw and addressed this problem briefly when it concluded:
- •In the cme case, the tribunal quoted the tribunal in The Mox Plant Case , 29 which stated that:
- •Identity of Parties
- •Interim or Injunctive Relief
- •Ila Committee on International Commercial Arbitration, Final Report on ‘Lis Pendens and Arbitration’(Toronto, 2006)
- •Ila Committee on International Commercial Arbitration, Final Report on ‘Lis Pendens and Arbitration’(Toronto, 2006)
- •It would be within the logic of the npv/dcf approach to disregard the fact that an investment may only be in its early stages. In these early stages, there will always
- •In conventional international law, in particular in icj jurisprudence, equitable circumstances play a role not only, for example, in boundary determinations, 231 but
- •Investor of the other party to the treaty concerning inter alia an alleged breach of the treaty itself.
- •If the award is annulled, the dispute may be decided by a new arbitration tribunal constituted in accordance with section 2 of Chapter IV of the Treaty. 40
- •Icsid Secretariat, ‘Possible Improvements of the Framework for icsid Arbitration’ (icsid Secretariat, Discussion Paper, 22 October 2004)
- •Veeder, VV, ‘The Necessary Safeguards of an Appellate System’, in f Ortino, a Sheppard, and h Warner (eds), Investment Treaty Law: Current Issues—Vol I (London, biicl, 2006)
- •Icsid Secretariat, ‘Possible Improvements of the Framework for icsid Arbitration’ (icsid Secretariat, Discussion Paper, 22 October 2004)
- •Veeder, VV, ‘The Necessary Safeguards of an Appellate System’, in f Ortino, a Sheppard, and h Warner (eds), Investment Treaty Law: Current Issues—Vol I (London, biicl, 2006)
- •Icsid Secretariat, ‘Possible Improvements of the Framework for icsid Arbitration’ (icsid Secretariat, Discussion Paper, 22 October 2004)
- •Veeder, VV, ‘The Necessary Safeguards of an Appellate System’, in f Ortino, a Sheppard, and h Warner (eds), Investment Treaty Law: Current Issues—Vol I (London, biicl, 2006)
- •Icsid Secretariat, ‘Possible Improvements of the Framework for icsid Arbitration’ (icsid Secretariat, Discussion Paper, 22 October 2004)
- •Veeder, VV, ‘The Necessary Safeguards of an Appellate System’, in f Ortino, a Sheppard, and h Warner (eds), Investment Treaty Law: Current Issues—Vol I (London, biicl, 2006)
- •Van den Berg, aj, ‘Some Recent Problems in the Practice of Enforcement under the New York and icsid Conventions’, 2 icsid Rev-filj 439 (1987)
- •Van den Berg, aj, ‘Some Recent Problems in the Practice of Enforcement under the New York and icsid Conventions’, 2 icsid Rev-filj 439 (1987)
- •Icsid Secretariat, ‘Possible Improvements of the Framework for icsid Arbitration’ (Discussion Paper, 22 October 2004)
- •Icsid Secretariat, ‘Possible Improvements of the Framework for icsid Arbitration’ (Discussion Paper, 22 October 2004)
- •In the context of investment arbitration, there is not necessarily always an arbitration agreement in
Van Hecke, g, ‘Contracts between States and Foreign Private Law Persons’, 1 epil 814 (1992)
W?lde T (ed), The Energy Charter Treaty (The Hague, Kluwer Law International, 1996) Footnotes ?The views presented in this chapter are those of the authors and should not be associated with any of their past or present employers. The authors would like to express their sincere thanks to Nicolas Nohlen whose initial assistance made this chapter possible, to Simon Evenett, Milos Barutciski, Margot Salomon, and Todd Weiler for their detailed and thoughtful comments on earlier versions of this chapter, and to Christoph Fischer and Emmanuel Saurat for their careful reading of the final drafts of the chapter. 1 SA Riesenfeld, ‘Foreign Investment’ in Rudolf Bernhardt and Peter Macalister-Smith (eds), 2 E PIL (Published under the Auspices of the Max Planck Institute for Comparative Public and International Law) (1992–2000) 435. 2 See further M Sornarajah, The International Law on Foreign Investment (Cambridge, Cambridge University Press, 2nd edn, 2004) 7 ff; J Kurtz, A General Investment Agreement in the WTO? Lessons Learned from Chapter 11 of NAFTA and the OECD Multilateral Agreement on Investment, Jean Monnet Working Paper 6/02 (2002) at 3; for the purposes of this chapter the general term ‘foreign investment’ shall be used. 3 See for comprehensive data the yearly World Investment Reports of the United Nations Conference on Trade and Development (UNCTAD), available at the UNCTAD website <http://www.unctad.org>. 4 See eg J Kokott, ‘Interim Report on the Role of Diplomatic Protection in the Field of the Protection of Foreign Investment’ in International Law Association (ILA), Report of the Seventieth Conference, New Delhi (London, ILA, 2002) 259 at 261. 5 See R Chandra, ‘International Law on Foreign Investment’, Seminar on Transnational Enforcement of Environmental Law and International Law on Foreign Investment on 1 May 2004 at the Constitution Club, organized by International Law Association 81 (2004). The UNCTAD webpage notes as follows on the growing importance of foreign investment for developing countries: foreign affiliates of some 64,000 transnational corporations (TNCs) generate 53 million jobs; FDI is the largest source of external finance for developing countries; developing countries’ inward stock of FDI amounted to about one-third of their GDP, compared to just 10 per cent in 1980; one-third of global trade is intra-firm trade: <http://www.unctad.org/Templates/StartPage.asp?intItemID=2527&lang=1>. 6 See Kokott, above n 4 at 263 ff. 7 According to the UNCTAD, World Investment Report 2006 (New York and Geneva, United Nations, 2006), at the end of 2005 the total number of BITs was 2,495, with 2,758 double taxation treaties, and 232 other international agreements, bringing the overall total of International Investment Agreements (IIAs) to 5,500 ( ibid 26). For an online compilation with search engine of all BITs, see UNCTAD at <http://www.unctadxi.org/templates/DocSearch 779.aspx>. 8 The marked exception are the bilateral investment agreements concluded by the USA and Canada which, following the practice of the North American Free Trade Agreement (NAFTA), cover pre-entry treatment of foreign investors as well. See NAFTA Chapter 11 at 32 ILM 605 (1993). See below at nn 80-8 for more detailed discussion of the right to establishment. See too G?mez-Palacio and Muchlinski, ‘Admission and Establishment’ ch 7 below. 9NAFTA 32 ILM 289 (1993); the Framework Agreement on the ASEAN Investment Area (concluded under the ASEAN Free Trade Agreement (AFTA); the Colonia Protocol on the Reciprocal Promotion and Protection of Investments within Mercosur, signed on 17 January 1994; and the Buenos Aires Protocol on the Promotion and Protection of Investments Made by Countries that are not Parties to Mercosur, signed on 8 August 1994 (both protocols concluded under the Asunci?n Treaty Establishing a Common Market between Argentina, Brazil, Paraguay and Uruguay (Mercosur), signed on 26 March 1991); the Treaty on Free Trade between Colombia, Mexico and Venezuela, signed on 13 June 1994. See further UNCTAD, Investment Provisions in Economic Integration Agreements (New York and Geneva, United Nations, 2006). 10 See eg the recently concluded EU-Chile Association Agreement and the EU-Mexico Association Agreement, the text of both available at <http://ec.europa.eu/comm/trade/issues/bilateral/index_en.htm>. See for further examples UNCTAD, above n 9. On US FTAs, see Jeffrey Scott (ed), Free Trade Agreements: US Strategies and Priorities (Washington, Institute for International Economics, 2004). 11 See the Energy Charter Treaty 34 ILM 381 (1995) and see further Thomas W?lde (ed), The Energy Charter Treaty (The Hague, Kluwer Law International, 1996). 1233 ILM 44 (1994). 13 See also Kurtz above n 2 at 10; Sornarajah, above n 2 at 303; K Sidhu, ‘Die Regelungen von Grenz?berschreitenden Investitionen in der WTO’, 7 Zeitschrift f?r Europarechtliche Studien (ZEuS) 335, 348 ff (2004). 14Art I(2)(c) GATS. For more details on the scope of the GATS, see <http://www.wto.org/english/tratop_e/serv_e/gatsqa_e.htm>. 15 E Kentin, ‘Prospects for Rules on Investment in the New WTO Round’, 29 LIEI 61, 64 (2002). 16 P Sauve, ‘Scaling Back Ambitions on Investment Rule-Making at the WTO’, 2 JWI 529–36 (2001). 17 P Sauve and C Wilkie, ‘Investment Liberalization in GATS’ in P Sauve and RM Stern (eds), New Directions in Services Trade Liberalization (Washington, DC, Brookings Institution, 2000) at 331–63. 18 See generally P Civello, ‘The TRIMS Agreement: A Failed Attempt at Investment Liberalization’, 8 Minnesota J of Global Trade 97 (1997). 19 Full text available at <http://www.unctad.org/en/docs/tdrbpconf10r2.en.pdf>. 20 See, however, below as regards the so-called Singapore Issues in the WTO, including investment. 21 For a comprehensive documentation of the negotiation process, see at the OECD's website <http://www.oecd.org/daf/mai>; see also PT Muchlinski, ‘The Rise and Fall of the Multilateral Agreement on Investment: Where Now?’, 34 Int'l Law 1033, 1037 ff (2000). The abbreviated name, ie MAI, was to prove a harbinger of things to come. ‘Mai’ in Italian means ‘never’. 22 See Muchlinski, above n 21 at 1039. 23 See further Tony Clarke and Maude Barlow, MAI: The Multilateral Agreement on Investment and the Threat to Canadian Sovereignty (Toronto, Stoddard Publishing, 1997). 24 For an insightful and refreshing account of the MAI negotiations and the lessons they offer, see EM Graham, Fighting the Wrong Enemy—Antiglobal Activists and Multinational Enterprises, (Washington, Institute for International Economics, 2000). 25 The 1998 MAI Negotiating Text as of 24 April 1998 is available at the OECD's website at <http://www.oecd.org/dataoecd/46/40/1895712.pdf>. 26 Muchlinski, above n 21 at 1049. Graham, above n 24 at 7, argues that the MAI draft ‘was becoming little more than a codification of existing law, policy and practice among the negotiating countries’. 27 The very active opposition of some NGOs has been regarded by several authors as one of the main reasons for the failure of the MAI; see A Rugman, ‘New Rules for International Investment: The Case for a Multilateral Agreement on Investment (MAI) at the WTO’ in C Milner and R Read (eds), Trade Liberalization, Competition and the WTO (Northampton, Mass, Edward Elgar Publishing, 2002) 176; J Kurtz, ‘NGO's, the Internet and International Economic Policy Making: The Failure of the OECD Multilateral Agreement on Investment’, 3 Melbourne J Int'l L 213, (2002) 231 ff. See also Muchlinski, above n 21 at 1039 ff; see also D Henderson, The MAI Affair: A Story and its Lessons (London, Royal Institute of International Affairs, 1999) 16. 28 The texts of the various Ministerial Declarations emerging from these meetings are available at <http://www.wto.org/english/thewto_e/minist_e/min_declaration_e.htm>. 29 The letter is available at: <http://www.ictsd.org/ministerial/cancun/docs/zoellick-letter.pdf>. 30 See Press Notice of the Commission of 26 November 2003, available at <http://www.europa.eu.int/comm/trade/issues/newround/pr261103_en.htm>; in which the Commission proposes to ‘show flexibility’ on the ‘Singapore Issues’. 31 WTO Working Group on the Relationship between Trade and Investment, established at the first Ministerial Meeting in Singapore in 1996. The Doha Ministerial Declaration clearly spells out the mandate of this working group, WTO Doc No. WT/MIN(01)/DEC/1, p 5, at paras 20–2, see above n 28. 32 See T L Brewer and S Young, The Multilateral Investment System and Multinational Enterprises (Oxford, Oxford University Press, 1998) 122; see also Kurtz, above n 2 at 9. 33 Cf B Ferrarini, ‘A Multilateral Investment Framework: Would it be Justifiable on Economic Welfare Grounds?’, 58 Aussenwirtschaft 491 (2003) at 494. 34 For an extensive Agenda of the European Union on international investment see <http://europa.eu.int/comm/trade/issues/sectoral/investment/conswtoag_inv.htm>; see also the EU's submission to the WGTI, WTO Doc No. WT/WGTI/W/110. 35 See Ferrarini, above n 33 at 494. 36 Working Group on the Relation between Trade and Investment, WT/WGTI/M/9, Report on the Meeting of 3 June 1999, at para 56; WT/WGTI//M/12, Report on the Meeting of 11 October 2000, at para 23. 37 Cf B Ferrarini, ‘A Multilateral Framework for Investment?’ in SJ Evenett (ed), The Singapore Issues and the World Trading System: The Road to Cancun and Beyond (Berne, Swiss State Secretariat of Economic Affairs/World Trade Institute, 2003) ch I at 27. 38 Ferrarini, above n 33 at 494. 39 A B?hmer, ‘The Struggle for a Multilateral Agreement on Investment—An Assessment of the Negotiation Process in the OECD’, 41 German YB Int'l Law 267, 268 (1998); Ferrarini above n 37, at 27; Kentin, above n 15, at 66. 40 See <http://www.dailyexcelsior.com/web1/03sep13/busi.htm#3>. The release of the statement forced CII to disassociate itself and to say that it had been misquoted. 41 See AV Ganesan, ‘Developing Countries and a Possible Multilateral Framework on Investment: Strategic Options’, 7(2) Transnational Corporations 1, 14 (1998). 42 See ibid . 43 See Ferrarini, above n 33 at 513. 44 On different kinds of legitimacy, cf J Kokott, ‘Sind wir auf dem Wege zu einer Internationalen Umweltorganisation’ in JA Frowein, K Scharioth, I Winkelmann, and R Wolfrum (eds), Verhandeln f?r den Frieden, Liber amicorum Tono Eitel (Heidelberg, Springer Verlag, 2003) 381, 408 ff. 45 For a comprehensive analysis of arguments put forward by both developed and developing countries in the WGTI, see Ferrarini, above n 37 at 16 ff. 46 For the IIASD Model Agreement as of April 2006 see: <http://www.iisd.org/pdf/2005/investment_model_int_handbook.pdf>. 47 Sauve, above n 16 at 529–30. 48 See eg Ganesan, above n 41 at 3 and 30 ff.; P-T Stoll and F Schorkopf, WTO—Welthandelsordnung und Welthandelsrecht (Cologne, Heymanns Verlag, 2nd edn, 2002) 247. 49 See above n 31. Furthermore, WTO members decided in 2001 at the Ministerial Conference in Doha to commence negotiations on an MAI. The Doha Declaration says that ‘negotiations will take place after the Fifth Session of the Ministerial Conference on the basis of a decision to be taken, by explicit consensus, at that session on modalities of negotiations’, WTO Doc No. WT/MIN(01)/DEC/1, p 5, at paras 20–2; ‘explicit consensus’ means that any of the WTO members could veto the inclusion. 50 B Hoekman and K Saggi, ‘Multilateral Disciplines for Investment-Related Policies?’, Paper presented at the conference ‘Global Regionalism’, Instituto Affari Internazionali, Rome, 8–9 February (1999) at 18. 51 As Ferrarini correctly points out, the ‘great bargain’ argument implies somehow that there is not much to gain for developing countries from multilateral investment rules, see above n 33 at 508. 52 The WTO dispute settlement system is an intergovernmental dispute settlement system and does not at present allow claims to be brought by private parties. 53 Although traditionally hailed as a truly multilateral organization, there are certain WTO agreements that are plurilateral in nature. These agreements are contained in Annex 4 of the Results of the Uruguay Round of Multilateral Trade Negotiations. 54NAFTA Art 1139. 55 See the MAI Negotiating Text (1998), above n 25 at 11, Ch 2 Art 2: ‘Investment means every kind of asset owned or controlled, directly or indirectly, by an investor’; also the term ‘investor’ was approached broadly: ‘Investor means a natural person having the nationality of, or who is permanently residing in, a Contracting Party in accordance with its applicable law or a legal person or any other entity constituted or organized under the applicable law of a Contracting Party …’. 56 See Schlemmer, ‘Investment, Investor, Nationality, and Shareholders’ ch 2 above and R Dolzer and M Stevens, Bilateral Investment Treaties (The Hague, Martinus Nijhoff, 1995) at 26; I Madalena, ‘Foreign Direct Investment and the Protection of the Environment: The Border between National Environmental Regulation and Expropriation’, 12 European Env L Rev 70, 71 (2003). A broad asset-based definition of investment was also favoured by the USA in the context of the WGTI. See eg WT/WGTI/W/142 at 2. 57 Muchlinski above n 21 at 1040 ff. 58 See UNCTAD, Lessons from the MAI, Series on Issues in International Investment Agreements, (New York and Geneva, United Nations, 1999) at 11, available at the UNCTAD website, <http://www.unctad.org/en/docs/psiteiitm22.en.pdf>. 59 Ibid . 60 EA Duruigbo, Multinational Corporations and International Law: Accountability and Compliance Issues in the Petroleum Industry (Ardsley, NY, Transnational Publishers, 2003) 189 ff (2003); Sornarajah, above n 2 at 55; I Seidl-Hohenveldern, The Corporation in and under International Law (Cambridge, Grotius Publications, 1987). 61 See RJ Dupuis, Arbitrator, Texaco v Lybia, 17 ILM 1 ff (1978); G van Hecke, ‘Contracts between States and Foreign Private Law Persons’, 1 EPIL 814 ff (1992); further references at K Doehrung, V?lkerrecht (Heidelberg, M?ller Verlag, 2004) 297 ff. 62 For example, the recently established post of UN Special Representative of the Secretary-General on Human Rights and Transnational Corporations and Other Business Enterprises was mandated to focus initially on addressing the ‘sphere of influence’ and complicity with regard to human rights and these non-state actors, Commission on Human Rights Res 2005/69, para 1(c). 63 One example of an international instrument placing obligations on businesses operating abroad is the OECD Anti-Bribery Convention. Admittedly, this agreement is ratified and implemented by the signatories rather than TNCs, but nevertheless illustrates the application of certain obligations for businesses operating abroad by adoption of the necessary domestic legislation. See <http://www.oecd.org/topic/0,2686,en_2649_34855_1_1_1_1_37447,00.html>. 64 See eg S Deva, ‘Human Rights Violations by Multinational Corporations and International Law: Where From Here?’, 19 Conn J Int'l Law 1 (2003); see also SR Ratner, ‘Corporations and Human Rights: A Theory of Legal Responsibility’, 111 Yale LJ 443, 461 (2001). Ratner argues that ‘a system in which the State is the sole target of international legal obligations may not be sufficient to protect human rights’. 65 See also J Kokott ‘Soft Law Standards under Public International Law, A Contribution on the Effects of the Transformation of International Law on the Sources of International Law’ in P Nobel (ed), International Standards and the Law (Berne, Staempfli, 2005). 66 The United Nations Codes of Conduct on Transnational Corporations, UN Centre on Transnational Corporations, UN Doc ST/CTC/SER.A/4 at 1 (1988), 23 ILM 626 (1984). 67UN Doc E/CN.4/Sub.2/2003/12/Rev.2 (2003). 68 See for a comprehensive analysis C Hillemanns, ‘UN Norms on the Responsibilities of Transnational Corporations and Other Business Enterprises with regard to Human Rights’, 10 German Law Journal No. 10 (1 October 2003), available at <http://www.germanlawjournal.com>. 69 In particular the Universal Declaration of Human Rights, GA Res 217A (III), UN Doc A/810 at 71 (1948); the International Covenant on Civil and Political Rights, GA Res 2200A (XXI), 21 UN GAOR Supp (no. 16) at 52, UN Doc. A/6316 (1966), 999 UNTS 171; and the International Covenant on Economic, Social and Cultural Rights, GA Res 2200A (XXI), 21 UN GAOR Supp (no. 16) at 49, UN Doc A/6316 (1966), 993 UNTS 3. 70ILO Doc GN 204/4/2 (1978), 17 ILM 422 (1978). 71OECD Doc DAFFE/IME(2000)20 (2000), 40 ILM 236 (2001). 72 Information available at <http://www.unglobalcompact.org>.? 73 See above n 67. 74 See also the ‘Interim report of the Special Representative of the Secretary-General on the issue of human rights and transnational corporations and other business enterprises to the United Nations Economic and Social Council’, E/CN.4/2006/97 of 22 February 2006 (hereinafter referred to as the Ruggie Report). The Special Representative, John Ruggie, states (para 61) that ‘[u]nder customary international law, emerging practice and expert opinion increasingly do suggest that corporations may be held liable for committing, or for complicity in, the most heinous human rights violations amounting to international crimes, including genocide, slavery, human trafficking, forced labour, torture and some crimes against humanity’. See too UNCTAD, World Investment Report 2007 (New York and Geneva, United Nations, 2007) Part II. 75 The non-binding OECD Guidelines for Multinational Enterprises, above n 71, were annexed to the draft agreement. 76 See O De Schutter, ‘Transnational Corporations as Instruments of Human Development’, in Phillip Alston and Mary Robinson (eds), Human Rights and Development—Towards Mutual Reinforcement (Oxford, Oxford University Press, 2005) 403 at 405. Noteworthy initiatives in the extractive sector include the ‘Extractive Industries Transparency Initiative’. For the principles and criteria, see <http://www.eitransparency.org/section/abouteiti/principlescriteria>. See also ‘Business and Human Rights: Policy Commitments and Disclosure in the Extractive Sector’, published by the International Business Leaders Forum, available at <http://www.iblf.org/resources/general.jsp?id=123736>. 77 See IIASD Model Agreement, above n 46 Part 3 (Arts 13–20). 78 Drawn from Art 9 IIASD Model Agreement, above n 46, but common in all kinds of investment treaties. See further Reinisch ‘Expropriation’ Ch 11 below. 79 See the MAI Negotiating Text (1998) above n 25 at p 57, Chapter IV, the ‘General Treatment’ provision. 80 The most well-known case is Ethyl Corporation v Canada , 24 June 1998 (Jurisdiction Phase), UNCITRAL, 38 ILM 708 (1999). Ethyl Corporation, a US-based TNC, used the NAFTA provisions to claim damages against the Canadian government for banning the import of a gasoline additive, MMT, which is a dangerous toxin. The ban was on health, safety, and environmental grounds; see for further case-law n 99 below. For a commentary on a number of NAFTA disputes, see M Barutciski, ‘In the Eye of the Beholder: A Commentary on Investor Protection under NAFTA’, in Alan S Alexandroff (ed), Investor Protection in the NAFTA and Beyond: Private Interest and Public Purpose (Ottawa, CD Howe Institute, Policy Study 44, The Border Papers, 2006) 61. 81 MAI Negotiating Text (1998) above n 25 at p 13, Chapter III. 82 Kurtz points, however, to the ‘fundamental differences’ between applying non-discriminatory standards in the trade rather than in the investment field, see Kurtz, above n 2 at 49. 83 MAI Negotiating Text (1998) above n 25 at pp 77 ff, Chapter VI. 84 Requiring national treatment already in the pre-establishment phase, the provisions within the 1998 MAI Negotiating Text provided investors a de facto right of entry into the host state and, thus, went beyond the majority of the existing BITs. 85 See Kurtz, above n 27 at 229. 86 See the OECD Code of Liberalisation of Capital Movements and the Code of Liberalisation of Current Invisible Operations, available at <http://www.oecd.org/document/63/0,2340,en_2649_34887_1826559_1_1_1_1,00.html . 87 See IIASD Model Agreement, above n 46 Art 4(E). Note also that in the Energy Charter Treaty this issue was dealt with by having a separate agreement on the extension of investor and investment protection to the pre-entry stage. To date that agreement has not entered into force. See Energy Charter Treaty Art 10(4), above n 11. See further Energy Charter Treaty Secretariat (1998), Draft Supplementary Treaty to the Energy Charter Treaty, available at <http://www.encharter.org/fileadmin/user_upload/document/SP_draft_text.pdf>. 88 Graham, above n 24 at 63, notes that OECD countries also use the combination of performance requirements and incentives. 89 Ibid . 90 See Ferrarini, above n 37 at 12; N Bernasconi-Osterwalder, ‘International Legal Framework on Foreign Investment—Background Paper’ in Seminar on Transnational Enforcement of Environmental Law and International Law on Foreign Investment on 1 May 2004 at Constitution Club, organized by International Law Association 69, 70 (2004); Muchlinski above n 21 at 1050. 91 Cf J Kokott, ‘Naturrecht und Positivismus im V?lkerrecht, Sind wir auf dem Wege zu einer Weltverfassung?’ in C Meier-Schatz and R Schweizer (eds), Recht und Internationalisierung, Fg. Zum Juristentag 2000 in St. Gallen (2001) 3 ff. 92 See the 1998 MAI Negotiating Text, above n 25, at p 7, Preamble; there was, however, never consensus among OECD members that language on the environment should appear even in the Preamble. 93 Ibid at p 56 esp n 129. 94 Ibid at p 54, the ‘not lowering labour and environmental standards’ clause. 95OECD Doc DAFFE/IME above n 71. 96 See L Compa, ‘The Multilateral Agreement on Investment and International Labor Rights: A Failed Connection’, 31 Cornell Int'l LJ 683, 685 ff (1998). 97 For a comprehensive analysis, see ibid at 687 ff. 98NAFTA Art 1114 allows merely for environmental measures which are ‘otherwise consistent’ with the provisions of Chapter 11. 99NAFTA Art 1110. 100 See eg Metalclad v The United Mexican States , 30 August 2000, ICSID Case No. Arb(AF)/97/1, 40 ILM 35 (2001); T?cnicas Medioambientales Tecmed, SA v United Mexican States , 29 May 2003, Award, ICSID Case No. Arb(AF)/00/2; Methanex v United States , 7 August 2002 (1st Partial Award), UNCITRAL; SD Myers, Inc v Canada , NAFTA Arbitration, 40 ILM 1408 (2001); see also in general Madalena above n 56 at 71. 101 See above sub-section (ii). 102 Experience from the WTO has also shown that attempts to include core labour standards as an issue for negotiation met with fierce resistance from developing countries. 103 See eg Report of the UN Working Group on the Right to Development, UN Doc. E/CN.4/2006/26, para 59: ‘The right to development implies that foreign direct investment (FDI) should contribute to local and national development in a responsible manner, that is, in ways that are conducive to social development, protect the environment, and respect the rule of law and fiscal obligations in the host countries. The principles underlying the right to development, as mentioned above, further imply that all parties involved, i.e. investors and the host countries, have responsibilities to ensure that profit considerations do not result in crowding out human rights protection …’. 104 MAI Negotiating Text (1998), above n 25 at 63 ff, Chapter V. 105 See R Geiger, ‘Regulatory Expropriations in International Law: Lessons from the Multilateral Agreement on Investment’, 11 NYU Env LJ 94, 105 (2002–3). 106 Needless to say, however, just as investors may bring abusive claims against states, so too may states do so against investors. This calls for careful crafting of any such dispute settlement mechanisms. 107 Such claims by individuals were then likely to take place at a national level, but special international dispute settlement mechanisms may also be provided. 108IIASD Model Agreement, above n 46, Art 19. 109 See MAI Negotiating Text (1998), above n 25 at 70-6, Chapter V. D. Art 2: the three options were the ICSID, the UN Committee on International Trade Law (UNCITRAL) and the International Chamber of Commerce (ICC). 110NAFTA Article 1120 offers ICSID and UNCITRAL arbitration. 111 See Sect 4(a) above; for proponents of the WTO as the right forum for multilateral investment rules see above n 48. 112Art 24.3 calls for the establishment of a Permanent Group of Experts who may be requested to assist a dispute settlement panel. 113 See in particular Art 22 of the DSU. 114 It should be noted that before the Canc?n Ministerial the USA floated the idea of allowing investor-state dispute settlement for a future WTO investment agreement. Some have (perhaps cynically) noted that this was a deliberate attempt on the part of the USA to kill off the prospect of negotiations. 115 See generally for possible improvements of the WTO dispute settlement system, D McRae, ‘What is the Future of WTO Dispute Settlement?’, 7 JIEL 3 (2004); E-U Petersmann, ‘WTO Negotiators Meet Academics: The Negotiations on Improvements of the WTO Dispute Settlement System’, 6 JIEL 237 (2003). 116 See above n 109. 117 Bernasconi-Osterwalder, above n 90 at 73. 118 Cf Art 43 IIASD Model Agreement, above n 46. Select Bibliography
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