Law Commons^™

Reforming International Investment Law To Advance Tax Justice, Madeleine Songy

Columbia Center on Sustainable Investment

Reforming International Investment Law to Advance Tax Justice" highlights the detrimental impact of current international investment treaties on tax justice and sustainable development objectives. It argues that Investor-State Dispute Settlement (ISDS) mechanisms often impede states' ability to implement effective tax policies by allowing foreign investors to challenge tax measures. The brief recommends a comprehensive reform of international investment law to ensure that investment treaties support rather than undermine tax justice. This can include eliminating ISDS provisions, drafting new treaties that safeguard the sovereign right of states to regulate taxation, and facilitating cooperation among states to reform tax systems at national, …

The Role Of Investment Treaties And Investor–State Dispute Settlement (Isds) In Renewable Energy Investments, Ladan Mehranvar, Sunayana Sasmal

Columbia Center on Sustainable Investment

Achieving our global goals of universal access to clean energy and averting a climate crisis will require a mass scale-up of investments in renewable energy infrastructure, redirecting capital from carbon intensive energy and transport systems. The International Renewable Energy Agency estimates that the transformation of the energy system alone will need cumulative investments to reach USD 110 trillion by 2050 to keep the rise in global temperatures to well below 2°C and towards 1.5°C during this century. Of that amount, over 80% will need to be invested in renewables, energy efficiency, end-use electrification, and power grids and flexibility.

The private …

Scaling Investment In Renewable Energy: Roadblocks And Drivers – Executive Summary, Mithatcan Aydos, Perrine Toledano, Martin Dietrich Brauch, Ladan Mehranvar, Theodoros Iliopoulos, Sunayana Sasmal

Columbia Center on Sustainable Investment

The zero-carbon energy transition is the solution to the 2022 energy crisis and a fundamental part of the solution to the global climate crisis. Yet, there are relatively low levels of investment in renewable energy in developing countries, hindering their achievement of the Sustainable Development Goals (SDGs) and contribution to the Paris Agreement goals.

In 2021, the Asia–Pacific region (excluding China) accounted for less than 8% of investments in energy transition technologies, Latin America and the Caribbean for less than 4%, and Africa and the Middle East for less than 2%. Annual investment in zero-carbon energy in developing economies other …

International Investment Law And The Extractive Industries, Ella Merrill, Jesse Coleman, Lisa E. Sachs, Lise Johnson

Columbia Center on Sustainable Investment

As of April 2022, the United Nations Conference on Trade and Development (UNCTAD) tallied 3,218 international investment treaties, of which 2,558 are in force. Investors in extractive industries (the oil, gas, and mining sectors) have used investor-state dispute settlement (ISDS) mechanisms embedded in these treaties to challenge a wide range of host state actions and inactions that have allegedly negatively affected their investments. Those claims, and the threats thereof, restrict states’ ability to maximize the benefits, and their ability to limit environmental and social harms, resulting from the exploitation of natural resources. This briefing note provides an introduction to international …

International Investment Governance And Achieving A Just Zero-Carbon Future, Ella Merrill, Martin Dietrich Brauch, Lisa E. Sachs

Columbia Center on Sustainable Investment

As developing countries continue to be the most negatively affected by climate change and the energy transition, it is increasingly critical that they receive foreign direct investment and financial support to build climate resilience, adapt to climate impacts, avoid carbon lock-in and fossil fuel dependence, and leverage their rich endowments of renewable and extractive resources to prepare for the zero-carbon future.

There is a disconnect and fundamental misalignment between international investment law and the international climate change regime, comprising the United Nations Framework Convention on Climate Change (UNFCCC) and the Paris Agreement. Existing investment treaties—including their centerpiece, investor–state dispute settlement …

Climate Action Needs Investment Governance, Not Investment Protection And Arbitration, Columbia Center On Sustainable Investment

Columbia Center on Sustainable Investment Staff Publications

A response by the Columbia Center on Sustainable Investment to the OECD Public Consultation on Investment Treaties and Climate Change.

The Columbia Center on Sustainable Investment (CCSI) — a joint research center of Columbia Law School and the Earth Institute at Columbia University — explores elements of the international investment legal framework, including the impact of investment treaties, investor–state dispute settlement, and home and host government policies governing inward and outward investment, among many other issues.

The Fighting's Done, Now Pay Me: Investment Treaties, War And State Liability, Thomas C. Hildebrand, Iii

Vanderbilt Journal of Transnational Law

Where major conflict erupts, major state liability follows. Sri Lanka, Zaire, Libya, and Syria have all found themselves subject to extensive liability to investors under bilateral investment treaties for harms incurred in the midst of armed conflicts raging within their borders. This Note argues that war-loss clauses, present in nearly every bilateral investment treaty, should be interpreted to create a lex specialis regime limiting investor compensation following armed conflicts. Arbitral tribunals, however, have consistently refused to apply war-loss clauses in this manner. This has lead to an over-extension of state liability to foreign investors in the wake of armed conflict. …

Crisis, Continuity, And Change In International Investment Law And Arbitration, Valentina Vadi

Michigan Journal of International Law

The dialectic between continuity and change lies at the heart of international law, which seeks to foster peaceful, just, and prosperous relations among nations. International law endeavors to govern the future by applying, in the present, norms that are inherited from the past. Nonetheless, everything flows and in an ever-changing world, some change is needed within the international legal system to ensure its stability especially in time of crisis. Not only can crises constitute means for the development of international law, but they can test, undermine or ultimately buttress the structure of international law. This article explores the connection between …

Against Balancing: Revisiting The Use/Regulation Distinction To Reform Liability And Compensation Under Investment Treaties, Jonathan Bonnitcha, Emma Aisbett

Michigan Journal of International Law

Investment treaties generate mutual benefits for host states and foreign investors to the extent that they discipline opportunistic conduct by host states. Investment treaties do not necessarily generate mutual benefits insofar as they constrain states’ ability to respond to new information or to change their policy priorities. In a companion paper, we use the tools of law and economics to formalize and clarify the relationship between problems of opportunism on the one hand, and new information and shifts in policy priorities on the other. On this basis, we develop a proposal to reform the legal principles that govern liability and …

Ccsi Submits Written Views To Us Department Of State Regarding Uncitral’S Working Group Iii, Columbia Center On Sustainable Investment

Columbia Center on Sustainable Investment Staff Publications

In connection with the US Department of State’s Annual Advisory Committee on Private International law meeting in May 2019, CCSI submitted written views regarding UNCITRAL’s Working Group III on ISDS reform. CCSI’s comments highlighted specific areas of CCSI’s research as it relates to the US Government and its work within the Working Group. Specifically, US investment treaty negotiating objectives specify that covered foreign investors in the United States should not be accorded greater substantive rights than domestic investors. CCSI highlights the ways in which greater procedural rights afforded under investment treaties to foreign investors in practice result in greater substantive …

Alternatives To Investor-State Dispute Settlement, Lise Johnson, Jesse Coleman, Brooke Güven, Lisa E. Sachs

Columbia Center on Sustainable Investment Staff Publications

Proponents often explain support for international investment agreements (IIAs) for their ability to: (1) promote investment flows; (2) depoliticize disputes between investors and states; (3) promote the rule of law; and (4) provide compensation for certain harms to investors – objectives of varying degrees of importance to multinational enterprises, home states, host states, and other stakeholders.

While each of these objectives may seem desirable, it is important to consider what exactly they mean and whether IIAs are optimally tailored to achieve them.

This two-part series aims to consider just that. In the first blog installment, we asked of investor-state dispute …

The Private Law Critique Of International Investment Law, Julian Arato

Articles

This Article argues that investment treaties subtly constrain how nations organize their internal systems of private law, including laws of property, contracts, corporations, and intellectual property. Problematically, the treaties do so on a one-size-fits-all basis, disregarding the wide variation in values reflected in these domestic legal institutions. Investor-state dispute settlement exacerbates this tension, further distorting national private law arrangements. This hidden aspect of the system produces inefficiency, unfairness, and distributional inequities that have eluded the regime's critics and apologists alike.

Trading Goods For Bad: Is Public Policy Undermined By Investor State Dispute Mechanisms?, Michelle C. Perez

University of Miami Inter-American Law Review

No abstract provided.

Clearing The Path: Withdrawal Of Consent And Termination As Next Steps For Reforming International Investment Law, Lise Johnson, Jesse Coleman, Brooke Güven, Lisa E. Sachs

Columbia Center on Sustainable Investment Staff Publications

This is a crucial moment in international investment policymaking. Two factors have converged, calling for a new direction. First, it has become increasingly difficult to justify investor-state dispute settlement (ISDS); even governments that had been among its strongest proponents are now changing course and have raised a range of fundamental, systemic and inter-related issues relating to ISDS. Second, policy makers and other stakeholders have a greater awareness of the need to design appropriate policies to maximize the contributions cross-border investment can make to sustainable development. Influenced by these factors, various reform efforts related to investment policy are underway at the …

Investment Treaty Arbitration In Cuba, Rafael Cox Alomar

University of Miami Inter-American Law Review

Not since the fateful days of the 1962 Missile Crisis, has Cuba commanded as much global attention as it does today. The 2014 diplomatic rapprochement between the United States and Cuba, not only did away with the last vestiges of the Cold War in Caribbean waters, but more importantly has coincided with a period of acute ideological effervescence in Havana. Even in the face of President Raúl Castro’s resolute commitment to the principles of the 1959 Revolution, it is more than evident that Cuba is in the midst of a transformational moment. And perhaps in no other area of the …

Space For Local Content Policies And Strategies, Lise Johnson

Columbia Center on Sustainable Investment Staff Publications

This paper explores both the role that local content measures can play in advancing sustainable development, and the impact that trade and investment treaties concluded over the past 20 years have had and will continue to have on the ability of governments to employ those tools. Certain local content measures had been restricted under the WTO due to wide agreement by negotiating parties that their costs outweigh their benefits. But the WTO also left a number of local content measures in governments’ policy toolboxes. As is discussed in this paper, however, that is changing, with the range of permissible actions …

International Investment Law And The Extractive Industries Sector, Lise Johnson, Jesse Coleman

Columbia Center on Sustainable Investment Staff Publications

Since the 1990s, international investment law has been rapidly evolving, resulting in a complex web of over 3,000 investment treaties. These treaties have been used to challenge a wide range of host state actions and inactions that have allegedly negatively affected foreign investors or investments. Those challenges, in turn, expose host states to potentially significant financial costs, and can restrict the ability of such states to maximize the benefits, and limit the environmental and social harms, that can result from the exploitation of natural resources. This briefing note provides an introduction to international investment law, with a view to assisting …

Tpp Would Let Foreign Investors Bypass The Canadian Public Interest, Lisa E. Sachs, Lise Johnson

Columbia Center on Sustainable Investment Staff Publications

In early October, prime ministerial candidate Justin Trudeau promised Canadians “a full and open public debate” on the Trans-Pacific Partnership. With 30 chapters that would bind Canada to sweeping agreements on everything from services to intellectual property to the environment to procurement, there is much to debate.

The Tpp’S Investment Chapter: Entrenching, Rather Than Reforming, A Flawed System, Lise Johnson, Lisa E. Sachs

Columbia Center on Sustainable Investment Staff Publications

During the negotiations of the Trans-Pacific Partnership (TPP) agreement, many stakeholders raised strong concerns about the Investment Chapter of the TPP, and in particular, the investor-state dispute settlement mechanism (ISDS). The US Trade Representative (USTR) and other representatives of the negotiating partners assured the stakeholders that the TPP’s investment chapter would respond to the legitimate concerns about expansive investor protections and ISDS. The actual text, however, when made public, showed the opposite: a further evisceration of the role of domestic policy, institutions, and constituents. In their current form, the TPP’s substantive investment protections and ISDS pose significant potential costs to …

Next Generation Treaty – India’S New Model Bit Makes It Clear That Its Goal Is To Accomplish More Than Investor Protection, Lisa E. Sachs, Lise Johnson, Sudhanshu Roy

Columbia Center on Sustainable Investment Staff Publications

The April release of India’s draft model bilateral investment treaty 1(BIT), which is expected to be approved by the cabinet soon, has generated a rich public debate on its international investment regime. There are important questions about the purpose and content of investment treaties, both in India and other countries. However, some reactions – like Augusts Law Commission report suggesting that the model BIT was not sufficiently investor-friendly – frame the discussion too narrowly, ignoring key questions and objectives behind India’s transitioning investment policy regime.

Empiricism And International Law: Insights For Investment Treaty Dispute Resolution, Susan Franck

Susan D. Franck

While scholars in the United States increasingly focus on the empirical dimension of legal scholarship, there have been challenges in using empiricism to explore international legal issues. Rather than relying on logic or instinct alone, empirical methodologies can provide scholars with tools to gain new facts, see existing ideas through a different lens, and engage in a more nuanced analysis of international law phenomena. There appears to be a natural synergy between empiricism and international investment treaty dispute resolution. With calls for trade time outs by U.S. presidential candidates, there is interest in how investment treaties function, whether they achieve …

Ripe For Refinement: The State’S Role In Interpretation Of Fet, Mfn, And Shareholder Rights, Lise Johnson

Columbia Center on Sustainable Investment Staff Publications

Over recent years, many states have taken steps to refine and modernize their investment treaties. These reforms, however, are typically only included in newer treaties or model agreements. States continue to be exposed to claims, litigation, and potential damages under older “old-style” agreements. These risks are particularly acute given that tribunals have often permitted investors to “treaty shop” to obtain more favorable protections, and have also permitted investors to use the most-favored nation (MFN) provision to “import” more investor-friendly (or at least less clear) provisions from other treaties.

This working paper discusses one strategy states can use to try to …

New Weaknesses: Despite A Major Win, Arbitration Decisions In 2014 Increase The Us’S Future Exposure To Litigation And Liability, Lise Johnson

Columbia Center on Sustainable Investment Staff Publications

In 2014, the US continued its overall record of success in defending investment treaty claims. But it did suffer losses on a number of important issues, and those losses will render the US (and its treaty parties) vulnerable to future claims, litigation expense, and liability. The US’s recent losses, which have thus far been largely ignored in commentary on the US’s experiences in investment arbitration, are highlighted in this briefing note.

Practical Implications From An Expansive Interpretation Of Umbrella Clauses In International Investment Law, Katherine Jonckheere

South Carolina Journal of International Law and Business

The right way to interpret so-called 'umbrella clauses' has been debated for over a decade. Interpreted restrictively, these clauses merely reinforce the substantive commitments and protections listed in the remainder of the investment treaties in which they are found. An expansive interpretation on the other hand gives these clauses the effect of elevating purely contractual obligations undertaken by the state vis-à-vis specific investors to full-blown treaty obligations under international law, subject to the investment treaty's dispute settlement provisions. Although an expansive reading seems to have gained considerable ground amongst investment arbitration tribunals over the years, this article will show that …

Investment Treaties And Industrial Policy: Select Case Studies On State Liability For Efforts To Encourage, Shape And Regulate Economic Activities In Extractive Industries And Infrastructure, Lise Johnson

Columbia Center on Sustainable Investment Staff Publications

This paper, prepared in connection with a February 2014 conference organized by the UN Economic Commission for Africa, discusses some of the implications that investment treaties have for investments in infrastructure and the extractive industries. It focuses on liability for government conduct (1) in connection with tenders and negotiations; (2) when responding to questions regarding the legality of the investment; (3) in using performance requirements to leverage benefits and capture spillovers from the investment; (4) changing the legal framework governing an investment in response to evolving needs, circumstances, and interests; (5) administering the investment; and (6) requesting, and responding to …

State Liability For Regulatory Change: How International Investment Rules Are Overriding Domestic Law, Lise Johnson, Oleksandr Volkov

Columbia Center on Sustainable Investment Staff Publications

With governments around the world pushing efforts to negotiate and approve mega-investment treaties, it is important to be clear on just what these investment treaties do and do not mean. One issue that is increasingly apparent is that investment treaties are not merely tools to provide protections against abusive regimes and egregious conduct, but are mechanisms through which a small and typically powerful set of private actors can change the substantive content of the law outside the normal domestic legislative and judicial frameworks.

The Margin Of Appreciation In International Investment Law, Julian Arato

Articles

Investment treaties tend to say nothing, or only very little, about the appropriate standard of review for arbitrating disputes between sovereign states and foreign investors. Most treaties do not address whether states should be afforded any deference in their own assessment of their treaty obligations. Neither do they specify the converse, that state action must be strictly reviewed. They are simply silent – and their silence has been interpreted in innumerable ways by different tribunals. This interpretive chaos has generated calls for a unified approach – one that would resolve the uncertain and fragmented status quo, while being sufficiently flexible …

The Place Of Treaties In International Investment, Eustace Chikere Azubuike

Annual Survey of International & Comparative Law

This paper is divided into seven parts. Part 1 traces the history of foreign investment treaties and provides the factors that led to the emergence of the current investment regime. Part 2 discusses the significance of treaties in the vexed question of whether or not there is a hierarchy of international law sources. Part 3 examines treaty-making in the current international investment regime – visiting the argument about whether or not the provisions of investment treaties have ripened into customary international law, highlighting the dominance of bilateral investment treaties over multilateral investment treaties, offering explanation for the near absence of …

Public Policy In International Investment And Trade Law: Community Expectations And Functional Decision-Making, Diane A. Desierto

Diane A Desierto

This article uses a contextual policy-oriented approach to assess how the standing debate on a State's regulatory freedom has been treated within international investment law (e.g. case-by-case interpretation of variant treaty design in each case), in contrast with how the issue of domestic regulatory autonomy in international trade law has evolved towards coordination (e.g. attempted harmonization of the same set of instruments). The article submits a different view from many primarily trade law/investment law scholars (and other systemic integrationists who idealize a seamless shift from trade law to investment law), who have postulated that this fundamental issue of State regulatory …

Investor-State Contracts, Host-State “Commitments” And The Myth Of Stability In International Law, Lise Johnson, Oleksandr Volkov

Columbia Center on Sustainable Investment Staff Publications

A new de facto rule has emerged in international investment law that emphasizes and prioritizes investment stability, imposing liability on host governments for a wide range of public interest measures deemed to interfere with “commitments” given to foreign investors by host governments. The arbitral decisions from which this new rule has emanated in treaty-based investment disputes resolve types of claims that have long been familiar to domestic jurisdictions. Yet, as this article uncovers through a comparative law analysis of factually similar cases decided under United States law over roughly the past 200 years, the approaches taken and pronouncements issued by …