By Damon Vis-Dunbar
6 February 2009
Faculty at Columbia University in New York have called on U.S. President Barack Obama’s administration to address “imperfections” in the international legal regime that governs foreign investment.
In a letter to the President, the academics write: “While the current international investment regime has been heralded as a great success, the speed with which it has developed has led to imperfections that need to be addressed to maintain and strengthen its legitimacy and effectiveness.”
The letter is now being circulated in the hopes that more people will sign on.
Members of the Columbia University faculty raise four concerns: the international investment law regime favours the rights of investors over those of host states; the piecemeal expansion of investment treaties and inconsistent interpretations of their provisions jeopardize the predictability of system; developing countries are not equipped to respond to complex investor complaints under investment treaties; and countries may restrict foreign investment in response to current financial troubles.
Among the proposed responses is the establishment of an international committee of academic institutions who would formulate a “Restatement of International Investment Law”, which would distinguish between those tenets of the law which are generally accepted and those that are contested.
In addition, the letter recommends further consideration of a multilateral appeals mechanism for arbitral decisions in investment disputes. An appeals mechanism has been suggested in other fora in the past as a means to ensure that investment treaty provisions are interpreted by arbitrators with greater consistency; however, the concept has yet to gain endorsement from a sufficient number of states.
An advisory center for developing countries on international investment law is also proposed. Such a center would be intended to help developing countries negotiate investment treaties and respond to investor complaints.
Finally, the letter calls for a “standstill onprotectionist measures,” in line with an agreement by G20 countries in November 2008.
A copy of the memo and details on how to include a signature are available from the Vale Columbia Center on Sustainable International Investment website: www.vcc.columbia.edu.