Since December 2021, when state parties to the AfCFTA began discussion rounds on the zero-draft text to raise preliminary concerns on it, they have since had rounds of negotiations between March and June 2022.
From September 5 to 16, 2022, UNCITRAL Working Group III (WGIII) on ISDS Reform held its 43rd session. This was the first in-person session since the global outbreak of COVID-19. It was also one of the longest WGIII sessions, covering a broad range of topics.
In December, the OECD released model Global Anti-Base Erosion Rules (GloBE) rules for countries to implement a global minimum tax and for companies to adhere to. It subsequently published detailed technical guidance on these model rules in the form of a commentary and examples.
The UN Convention on the Right to Development is a multilateral framework currently being negotiated by the UN General Assembly Human Rights Council and drafted by a tasked drafting committee. It stems from the 1986 UN Declaration on the Right to Development, which establishes development as a right and puts people at the centre of the development process.
On May 10, 2022, the OECD held its seventh Annual Investment Treaty Conference on the nexus of investment treaties and climate change policy. The event took place following unprecedented warnings by the Intergovernmental Panel on Climate Change about the problematic role played by investment treaties as an obstacle to climate action.
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Draft code of conduct for legal decision-makers still under discussion In accordance with its work plan, UNCITRAL WGIII is continuing to make progress on ISDS reform. At its 42nd session, […]
After a lengthy negotiation process, Contracting Parties at the June 24 meeting of the Energy Charter Conference reached an agreement in principle to modernize the Energy Charter Treaty (ECT)—an outdated investment treaty that protects fossil fuel investors at the expense of critical climate action.
Following discussions at the Freedom of Investment Roundtable in 2021, the OECD has launched a new Work Programme on the Future of Investment Treaties.
From March 1 to 4, 2022, the contracting parties of the ECT met for their 11th round of negotiations for a possible reform of the treaty. The meeting was overshadowed by rising energy prices and the Russian invasion of Ukraine, which is likely to have significant consequences for the European energy market.
The tribunal in the NAFTA-based arbitration of Odyssey Marine Exploration, Inc. v. United Mexican States has declared inadmissible the amicus curiae brief submitted by the Centre for International Environmental Law (CIEL) in collaboration with Sociedad Cooperativa de Producción Pesquera Puerto Chale (Cooperativa).
The European Commission has adopted a proposal on requiring EU companies to conduct “due diligence” processes related to their human rights and environmental impacts. Some businesses would also be required to align their business strategies with limiting global warming to 1.5°C. The directive also extends to companies’ subsidiaries and value chains.
On December 10, 2021, WTO members who are signatories to the Joint Statement Initiative on investment facilitation adopted a statement (contained in document WT/L/1130). In this statement, they welcomed the progress made in negotiations, “aiming to conclude the text negotiations by the end of 2022.”
In accordance with the third phase of its mandate, as well as the work planning and resourcing plan adopted at its 40th session, UNCITRAL Working Group III (WGIII) has continued its work on ISDS reform in 2022, with a focus on the draft code of conduct for international investment adjudicators, which was already the sole topic on the agenda of the 41st session and the subject of an informal meeting in December 2021.
The UNCITRAL WGIII on ISDS reform held its 41st session from November 15–19, 2021, with delegates participating both in person and virtually. Discussions focused on the proposed Draft Code of Conduct for Adjudicators in International Investment Disputes and its attendant note on Means of Implementation and Enforcement.
Over these last months, participating WTO members have continued work on new proposals as well as on the “Easter Text” (circulated by the coordinator of the structured discussions in mid-April), which has become the basis for negotiations.
Since our last report, two more negotiation rounds have taken place on ECT modernization. The seventh round took place from October 28–November 1, 2021, while the eighth round was held from November 9–11, 2021.
Since we last reported on the process, there have been two virtual negotiation rounds on ECT modernization, taking place in the midst of increased civil society opposition to the agreement, particularly within the EU.
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As we reported, UNCITRAL WGIII on ISDS reform held its 40th session in May 2021, at which time delegates discussed a draft work and resourcing plan.
Twelve years after it denounced the agreement, Ecuador has again ratified the ICSID Convention. The agreement came back into force on September 3, following the deposit of the instrument of ratification with the World Bank on August 21.
The prime minister of Spain, Pedro Sánchez, and the president of Colombia, Iván Duque Márquez, signed a new BIT on September 16, 2021. Both countries sought to modernize the previous treaty, which had come into force in 2005.
The government of Pakistan has reportedly resolved to terminate 23 of the country’s 48 BITs that have completed their initial duration. Additionally, the country will not ratify 16 BITs that have been signed but have yet to enter into force.
On July 27, 2021, the UN Working Group on Business and Human Rights published its 2021 Report on Human Rights-Compatible IIAs.
WTO members involved in the “structured discussions” on investment facilitation met on several occasions during the first quarter of 2021. These meetings culminated with the circulation of the “Easter Text,” an important milestone in the talks that brings together several earlier drafts and texts in one document. This text will serve as the main basis for drafting any ultimate agreement on investment facilitation.
The UNCITRAL WGIII convened, with delegates able to attend virtually or in-person, from May 4–5, 2021 for the resumption of its 40th session. On the agenda was consideration of the draft work and resourcing plan.
On May 20, 2021, the European Parliament voted to suspend ratification efforts of the “in principle” Comprehensive Agreement on Investment (CAI) with China.
As we reported, German-owned energy company Uniper put the Netherlands on notice of an investment dispute last year, following the announcement of the country’s plan to phase out coal-burning power plants by 2030. Alongside RWE, another German energy company, Uniper made good on that threat earlier this year; both companies initiated ICSID claims lodged under the ECT this spring.
On May 13, 2021, Canada announced that it had finalized its 2021 Model Foreign Investment Promotion and Protection Agreement (FIPA), which will replace the 2014 version. According to Global Affairs Canada, the agreement is the result of “extensive public consultations initiated in 2018 with a broad range of stakeholders, including from civil society and labour unions, legal experts, representatives of all sizes of Canadian business, representatives of provinces and territories, and Indigenous partners.”
Following three negotiation rounds on ECT modernization last year, the most recent of which concluded on November 6, 2020, a leaked progress report from December 2020 suggests that state parties are still divided on key issues. This makes progress in negotiations, which require consensus from the national delegations, difficult to come by.
On December 30, 2020, after seven years of discussion, Brussels and Beijing announced the conclusion of the negotiations for an “in principle” Comprehensive Agreement on Investment (CAI) between China and the European Union.
On January 19, 2021, the main shareholders of a consortium controlling the billion-dollar concession for Santiago’s Arturo Merino Benítez international airport informed Chilean President Sebastián Piñera of their intention to initiate an ICSID claim. The investors claimed they had suffered losses as a consequence of measures taken in response to the COVID-19 pandemic.
The UNCITRAL Working Group III (WGIII) convened virtually from February 8 to 12 for its 40th session. During this session, the group’s deliberations focused on two main issues related to structural reform of ISDS: the selection and appointment of ISDS tribunal members in the context of a “Standing mechanism” or “Standing body” (A/CN.9/WG.III/WP.203) and an appellate mechanism (A/CN.9/WG.III/WP.202).
Four decisions adopted by Canada and the European Union on January 29 have moved the parties closer to implementing an Investment Court System (ICS) under the Canada-EU Comprehensive Economic and Trade Agreement (CETA). The decisions on appeals, interpretation, code of conduct, and mediation were formally endorsed by CETA’s Joint Committee and Committee on Services and Investment (CSI) and will take effect once the dispute resolution provision of CETA comes into force.
The EU’s foreign investment screening mechanisms became operational on October 11, 2020. As we’ve reported, guidance on the screening mechanisms, which are implemented by individual member states, was released in March 2020 following the 2019 entry into force of the FDI Screening Regulation.
On December 2, 2020, in an answer to questions submitted by MEPs, the EC suggested that the EU could exit the ECT.
On November 15, 2020, 15 Asia-Pacific countries signed the Regional Comprehensive Economic Partnership (RCEP) nearly one year after negotiations came to a close.
On November 9, 2020, the Asian Academy of International Law hosted a virtual event on the use of mediation in investor–state dispute settlement. This event is one of several being organized by UNCITRAL in parallel to the formal meetings of the Working Group III on investor–state dispute settlement reform.
UNCTAD’s IIA Reform Accelerator launched in November 2020.
Negotiators working on multilateral reform of the ISDS system will reconvene on October 5 to 9, 2020, in Vienna for their 39th session. This session, which was originally to be held in March and April 2020, was rescheduled in light of the COVID-19 pandemic.
On July 31, 2020, the Cypriot parliament voted against the ratification of CETA, the trade deal between the EU and Canada.
The U.S. and Kenya formally launched negotiations on the US–Kenya FTA on July 8, 2020. If concluded, the agreement would be the first bilateral trade agreement between the U.S. and a sub-Saharan African state.
On May 14, 2020 the EC initiated infringement proceedings against the UK and Finland for failing to terminate the intra-EU BITs to which they are a party. Though the UK has formally left the European Union, EU law continues to apply to the UK during the transition period, which ends on December 31, 2020.
Following two years of “structured discussions,” the negotiations for a proposed WTO multilateral framework for investment facilitation (MFIF) are set to begin on September 24–25, 2020.
Negotiations for the Indonesia–EU FTA have been ongoing since 2016, with the ninth round taking place on June 15–26, 2020.
The government of India has recently enacted significant restrictions on inward FDI coming from its neighbours, in a move that seems calculated to target Chinese investment.
As we reported, the EC launched a consultation to clarify and supplement rules on cross-border investment within the EU in May 2020.
Two rounds of the negotiations for the modernization of the ECT have been held over the past two months, from July 6 to 9 and September 8 to 11, 2020.
On May 26 2020, the EC launched a consultation to clarify and supplement rules on cross-border investment within the EU. According to the consultation document released by the EC, the […]
On March 25, 2020, the European Commission published a guidance for member states on FDI screening in the face of the COVID-19 pandemic, focusing on, but not limited to, health-related industries.