Transcript UNCTAD`s IPFSD: Why now?
International Investment Agreements – Balancing Sustainable Development and Investment Protection
10-11 October 2013, Berlin
UNCTAD's Investment Policy Framework for Sustainable Development (IPFSD)
Elisabeth Tuerk, Officer-in-Charge International Investment Agreements (IIAs) Section Investment and Enterprise Division (DIAE) UNCTAD
UNCTAD’s IPFSD: Why now?
1.
Evolving global
investment landscape
paradigm/path for a new investment-development 2.
Imperative for mainstreaming
sustainable development
policy core into the investment
3.
Investment policy making at a crossroads:
at times of reflection, review and revision 4.
Challenges of
systemic flaws
, issues of policy coherence, synergy and effectiveness
Need guidelines and tools
Foreign direct investment is the largest source of development finance FDI, remittances and ODA to developing economies, 2000-2012
(Billions of dollars)
Developing economies surpass developed economies as FDI recipients for the first time FDI inflows by group of economies, 1995 – 2012
(Billions of dollars) 2 500 World total 2 000 1 500 1 000 Developed economies Transition economies Developing economies 42% 500 0 1995 1996 1997 1998 1999 2000 2001 2002 2003 2004 2005 2006 2007 2008 2009 2010 2011 2012 52%
4
Imperative for mainstreaming sustainable development into the investment policy core
Investment policy making at a crossroads: Most countries remain keen to attract FDI while becoming more selective and reinforcing regulatory frameworks
Changes in national investment policies, 2000 – 2012 (Per cent) 100 94% 75 Liberalization/promotion 75% 50 Restriction/regulation 25% 25 6% 0
12
Investment policy making at a crossroads: The number of newly signed IIAs continues to decline Trends in IIAs, 1983 –2012
The current three-year average of one new IIA per week is considerably lower than the 4 new IIAs per week average of the mid-1990s.
A record number of 58 new ISDS cases were initiated in 2012 Known ISDS cases, 1987-2012
58 new ISDS claims in 2012 - the highest number for a single year.
Total number of known cases at the end of 2012: 514.
UNCTAD’s IPFSD: Why now?
1.
Evolving global
investment landscape
paradigm/path for a new investment-development 2.
Imperative for mainstreaming
sustainable development
policy core into the investment
3.
Investment policy making at a crossroads:
at times of reflection, review and revision 4.
Challenges of
systemic flaws
, issues of policy coherence, synergy and effectiveness
Need guidelines and tools
UNCTAD's Investment Policy Framework for Sustainable Development (IPFSD)
IPFSD
IPFSD: Key characteristics
Holistic Systemic
Addressing all dimensions of investment policy
Synergistic
IPFSD: Structure & components IPFSD helps policymakers address today’s investment policy challenges
IPFSD: Core principles for investment policymaking
1
Investment for sustainable development
2 3
Policy coherence Public governance and institutions
…overarching objective of investment policymaking … …grounded in a country’s overall development strategy … coherent and synergetic … …involving all stakeholders … standards of public governance …predictable, efficient and transparent procedures for investors 4 5 6 7
Dynamic policymaking Balanced rights and obligations Right to regulate Openness to investment
…regular reviews for effectiveness and relevance … …setting out rights and obligations of States and investors in the interest of development …in the interest of the public good and to minimize potential negative effects …in line with development strategy … open, stable and predictable entry conditions … 8
Investment protection and treatment
…adequate protection to established investors … non-discriminatory 9
Investment promotion and facilitation
…aligned with sustainable development goals … minimize risk of harmful competition for investment 10
Corporate governance and responsibility
…promote adoption of and compliance with best international practices of CSR … 11
International cooperation
…address shared investment-for-development challenges … avoid investment protectionism
How national investment policymaking works in the IPFSD
The challenges of international investment policymaking
International investment policymaking: 3 levels
• Formulating a strategic approach investment to international engagement on – – Integrating IIAs into a country's development strategy Understanding what IIAs can and cannot do • Designing sustainable development friendly IIA clauses – What type of agreement (BIT or FTA) – What type of relationship (bilateral or regional) – With whom • Engaging in multilateral consensus building
IIA table of elements in the IPFSD: How it works
An excerpt from the IPFSD framework
Examples of IPFSD policy options
• • • • • • • • Carefully
craft scope and definitions
clause.
Structure
FET
as an exhaustive list of State obligations.
Distinguish legitimate regulations from
regulatory takings
.
Make
full protection and security
commensurate with a country’s level of development.
Limit the scope of the
transfer of funds clause.
Include
exceptions
to protect human rights, health, labor standards, and the environment.
Consider, in light of host country’s quality of judicial and administrative system, no
ISDS
, or last resort ISDS jurisdiction.
Create an
institutional setup
that makes the IIA adaptable to changing development contexts.
IPFSD: What for? End-use
Reference for policy making
: a "policy at a glance" for politicians, a handbook for national policy makers, and “checklist of options” for treaty negotiators
Tool for technical assistance :
framework for IPRs, basis for updating regulatory regimes, menu for training, a handbook for general advisory services
Basis for consensus-building :
• Short-term: promoting common understanding on key issues related to investment for sustainable development; • Longer-term: a stepping stone for formulating common denominators of multilateral cooperation
Living framework for all stakeholders to contribute :
"open source“ on the web and discussion forum for best practices.
IPFSD – What for? End-use and next steps
Growing tendency to craft treaties in line with sustainable development objectives
By the end of 2013, more than 1,300 BITs will be at the stage where they could be terminated or renegotiated at any time Cumulative number of BITs that can be terminated or renegotiated
Treaty expiration provides window of opportunity for improving the IIA regime. Countries need to analyse the pros and cons of treaty termination and its implication for the overall investment climate and existing investments.
Source : UNCTAD
The Investment Policy Hub and the IPFSD
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The Investment Policy Hub: http://investmentpolicyhub.org
UNCTAD websites: www.unctad.org/diae www.unctad.org/wir www.unctad.org/fdistatistics @unctadwif