Search Results (8)

Brazil, after signing several traditional Bilateral Investment Treaties without ratifying them, recently shifted towards a different type of bilateral investment agreement, i.e., Investment Cooperation and Facilitation Agreements. Two claims have been made in the literature regarding the transition from traditional Bilateral Investment Treaties to Investment Cooperation and Facilitation Agreements—Claim #1: The non-ratification of the traditional BITs has not harmed Foreign Direct Investment into Brazil, a claim which puts into question the purpose of Bilateral Investment Treaties. Claim #2: While Investment Cooperation and Facilitation Agreements avoid some of the problems of traditional Bilateral Investment Treaties, on balance they are less effective than traditional Bilateral Investment Treaties would have been. We examine the two claims from an empirical economic point of view. We build on the literature about Brazil’s position vis-à-vis Bilateral Investment Treaties, which must be viewed by an amalgamation of (i) a historical legacy; (ii) domestic initiatives, and (iii) a particular U-turn in the political debate. Using empirical evidence on Foreign Direct Investment effects of Bilateral Investment Treaties, the following conclusions emerge: With regard to claim #1, empirical evidence in general as well as specific to Brazil suggests that Brazil has forgone Foreign Direct Investment by not ratifying traditional Bilateral Investment Treaties. Concerning claim #2, while Investment Cooperation and Facilitation Agreements include alternative dispute settlement mechanisms, which aim at a better compliance of states with the Investment Cooperation and Facilitation Agreements’ rules, rather than the compensation of foreign investors, the lower stringency of the State–State dispute settlement mechanism compared to Investor–State dispute settlement mechanism makes Investment Cooperation and Facilitation Agreements less effective. Yet, this weakening effect must be weighed against the effects on Foreign Direct Investment from innovative clauses in Investment Cooperation and Facilitation Agreements, which are absent in many traditional Bilateral Investment Treaties. Full article

Enhancing legal certainty is one of the main values that are sought in the investor–state dispute settlement system. The importance of legal certainty is strengthened in the case of renewable energy investments, which are in the global public interest, long-term and capital-intensive up-front. The first part of the paper presents the importance of legal certainty in investment arbitration in general, its limits and its importance in the context of the green energy transition. In addition, it addresses the special features of renewable energy investments. The second part of the paper analyses from the perspective of legal certainty the Spanish renewable energy cases initiated under the Energy Charter Treaty (ECT), which deal with similar factual and legal issues. In this respect, the paper presents the varying weight tribunals gave to the important facts that led them further to conclude whether Spain breached the fair and equitable treatment standard, and if so, whether the investor was entitled to full compensation or a reasonable rate of return. In addition, it presents different approaches to perceiving the stability provision of Article 10 (1) of the ECT. The paper concludes that it remains uncertain to what extent RE investors will be protected under the ECT’s stability condition in the case of fundamental or small-scale changes. Although one group of arbitrators may argue that the fundamental change triggers per se a breach of a stability condition, others may argue that for the breach to be established, the host state’s measures must be arbitrary, unreasonable or discriminatory. Moreover, the threat to legal certainty might not only be the vague provisions of the ECT but also the significant discretion tribunals have towards the interpretation of facts, leading to different outcomes. Indeed, it is at the discretion of arbitrators to consider whether the timing of investment, presence of evidence indicating possible regulatory changes, and the reasonable rate of return prescribed in Spain’s domestic law will be relevant or irrelevant. Full article

The conflicting objectives of the Energy Charter Treaty’s (ECT) protection of fossil fuel investments and climate change mitigation can reveal themselves in investor state dispute settlement (ISDS). As neither the modernization nor the termination of the ECT is likely, ECT arbitration will continue to exist. This article, therefore, examines the reconciling potential of integrative interpretation in climate relevant ECT arbitrations. An integrative interpretation is not only prescribed by the international rules of treaty interpretation, but can also be found in the practice of international dispute settlement. However, international climate law has not yet been taken into account by a single ECT tribunal. Although some hurdles and uncertainties remain in practice, examples of extraneous treaty use, as well as the reasoning of the judgments of recent climate litigation, show that ECT ISDS has the potential to reconcile climate change and energy investment interests in the future. Full article

The principal purpose of this article is to demonstrate how the precautionary principle can be included in the investor–state dispute settlement (ISDS) deliberative process by providing a legal solution that would permit the invocation and implementation of this concept within the ISDS operational framework. The precautionary principle has been widely applied in the environmental management field, yet its role within the ISDS framework has remained relatively underutilised. To analyse this issue, this paper first explores the operational justification of the precautionary principle and how decision-makers should endorse it in order to fully recognise and address environmental concerns on a legal level. Next, the article proceeds to examine recent ISDS cases in which the precautionary principle was invoked and compares various risk assessment techniques to illustrate how it may be incorporated into the deliberative process and harmonised with other standards. The paper suggests that the forward-looking nature of the precautionary principle has paramount importance in disputes involving oil and gas, particularly in cases where oil and gas activities are believed to contribute to greenhouse gas emissions that could worsen global warming. This paper advances the argument that a wider application of the principle could better equip ISDS tribunals to address the limitations of scientific knowledge, especially under circumstances where significant or irreversible environmental damage may occur. Full article

The current international investment treaty network is not well suited to climate goals. The tension stems from the fact that “old generation” of international investment agreements were concluded before the widespread climate action and they were “climate neutral” or “climate blind”. This study explores the obstacles for international investment agreements and investment arbitration to tackle climate change issues, indicating the need for reform. Despite the fact that some states have begun to reform their international investment agreements in light of climate change, there are still many shortcomings to be addressed. The current international investment agreement regime should be reformed to incorporate climate change considerations for investment arbitration to contribute to climate change mitigation. According to the findings, updating investment treaties based on a climate-oriented model would be a viable option for states. Full article

Indigenous peoples’ environments can be easily disrupted by foreign investments, and disputes have occasionally occurred over the past few years. The objective of this research article is to examine if current international investment law, especially its investor-state dispute settlement (ISDS) mechanism, could provide necessary protection to Indigenous rights. We searched all publicly available ISDS cases from 2000 to 2020, and selected 10 typical ones for comprehensive case study by using various research methods such as doctrinal legal research and comparative analysis. Our research revealed that Indigenous peoples’ participation in the ISDS proceedings is legally restrained, time-consuming, and rarely favorably decided by the arbitral tribunals. Responsibility for such undesirable outcomes rests with all stakeholders involved in the process, while the consequences of post-arbitration tend to be “triple losing”. These findings highlight the quest for a more sustainable international investment regime that promotes Indigenous peoples’ wellbeing and environment protection. We argue that future reform could be promoted not only over ISDS procedural matters, but also by upgrading substantive rules in international investment agreements (IIAs), emphasizing free, prior, and informed consent (FPIC), and strengthening foreign investors’ corporate social responsibilities (CSR). Full article

Transnational trade holds opportunities for prosperity and development if accompanied by a robust political and legal framework. Yet, where such a framework is missing, transnational trade is frequently associated with, among others, negative impacts on the environment. Applying a legal comparison, this article assesses if recent free trade agreements, i.e., the Mercosur Agreement, CETA and the EU–Vietnam Free Trade Agreement, negotiated by the European Union, have been underpinned with effective environmental standards so that they are in line with global environmental goals and avoid detrimental effects on climate and biodiversity. Besides that, we evaluate the extent to which these agreements at least enable and incentivise environmental pioneering policies in the trading Parties. In particular, we discuss the likely impacts of the agreements on the agricultural sector. The analysis finds that, while a few mandatory standards concerning, e.g., deforestation have been established, overall, the agreements lack a comprehensive legal framework to uphold/enhance environmental protection. Moreover, weak dispute settlement mechanisms to ensure compliance with sustainability measures limits their effectiveness. In addition, the provisions on regulatory cooperation and investor-state dispute settlement are likely to negatively affect the decision-making processes and (thus) discourage ecological pioneering policies in the trading Parties. Hence, there is a long way to go so that transnational trade is compatible with global environmental goals. Full article

The Trans-Pacific Partnership (TPP) is a trade agreement, which seeks to regulate copyright law, intermediary liability, and technological protection measures. The United States Government under President Barack Obama sought to export key features of the Digital Millennium Copyright Act 1998 (US) (DMCA). Drawing upon the work of Joseph Stiglitz, this paper expresses concerns that the TPP would entrench DMCA measures into the laws of a dozen Pacific Rim countries. This study examines four key jurisdictions—the United States, Canada, Australia, and New Zealand—participating in the TPP. This paper has three main parts. Part 2 focuses upon the takedown-and-notice scheme, safe harbours, and intermediary liability under the TPP. Elements of the safe harbours regime in the DMCA have been embedded into the international agreement. Part 3 examines technological protection measures—especially in light of a constitutional challenge to the DMCA. Part 4 looks briefly at electronic rights management. This paper concludes that the model of the DMCA is unsuitable for a template for copyright protection in the Pacific Rim in international trade agreements. It contends that our future copyright laws need to be responsive to new technological developments in the digital age—such as Big Data, cloud computing, search engines, and social media. There is also a need to resolve the complex interactions between intellectual property, electronic commerce, and investor-state dispute settlement in trade agreements. Full article