Transcript Implementation of Investment Treaty Obligations and

Implementation of Investment
Treaty Obligations and
Management of Investment Disputes
José Antonio Rivas
International Investment and ADR
W&L University and UNCTAD Conference
Lexington, VA, March 29, 2010
Abstract
Implementation and management of investment treaty obligations refers to those
measures and actions that a State Party to an international investment agreement (IIA)
undertakes in order to comply with IIAs, minimize the chance of international investment
arbitration claims and improve its readiness to face these sorts of claims. IIAs usually do
not spell out measures to be taken following the signature of the treaty, or after its entry
into force, as a component to guarantee consistency with the particular IIA.
Usually, whether or not there is compliance with a particular IIA constitutes an analysis
done in front of an arbitration tribunal, after an investor alleges that acts or omissions of
the host State have breached the IIA. By contrast, other international economic
agreements, e.g. certain trade chapters of free trade agreements (FTAs) after their
signature are often followed by a set of measures and actions that the trading partners
shall take in order to guarantee compliance with the FTA. The question is whether an
implementation and follow-up approach would benefit host States, investors and the
system of international investment law as a whole, in contrast to only having a reactive
posture – defensive most of the time – when facing investor State arbitration claims. This
approach encourages the implementation of investment treaty obligations at the domestic
level, first through the inclusion of implementation clauses into the IIA; and second
through the development of certain steps to prevent as far as possible, minimize and face
investor-State disputes.
I.
Generally IIAs do not require implementation of
legislation or modifications of existing regulations
after their entry into force
II. International investment law, host States and
investors would benefit from IIAs encouraging State
Parties to implement legislation to prevent, minimize
and address international investment arbitrations
III. Measures and actions derived from model clauses on
management and implementation of IIAs obligations
IV. Conclusions
I. Generally IIAs do not require implementation of
legislation or modifications of existing regulations after
their entry into force
1. IIAs as self executing agreements – IIAs do not specify that
additional domestic legislation should be enacted after their
entry into force
a. Enacting domestic legislation for Treaty implementation
2. Other international economic agreements entail the
enactment of domestic legislation for their implementation
3. IIAs include certain obligations demanding a proactive
stance from State Parties
4. Deference to State Parties on how to implement their IIA
obligations
II.
International investment law, host States and
investors would benefit from IIAs encouraging State
Parties to implement legislation to prevent, minimize and
address international investment arbitrations
1. Legitimate concerns:
Proliferation of disputes requires efforts from host State
Parties to minimize the risk of international arbitration
claims and increase the State Parties’ readiness to face
them.
II.
International investment law, host States and
investors would benefit from IIAs encouraging State
Parties to implement legislation to prevent, minimize and
address international investment arbitrations (cont’d.)
2. a.Investment Committee of the Colombia - Canada FTA
"Article 817: Committee on Investment
1.
The Parties hereby establish a Committee on Investment, comprising
representatives of each Party.
2.
The Committee shall provide a forum for the Parties to consult on issues related to
this Chapter that are referred to it by a Party.
3.
The Committee shall meet at such times as agreed by the Parties and should work
to promote cooperation and facilitate joint initiatives, which may address issues such
as:
(a)
capacity building, to the extent resources are available, in legal expertise on investor-State
dispute settlement, investment negotiations and related advisory matters;
(b)
promoting corporate social responsibility; and
(c)
other investment-related issues identified as a priority by the Parties."
II.
International investment law, host States and
investors would benefit from IIAs encouraging State
Parties to implement legislation to prevent, minimize and
address international investment arbitrations (cont’d.)
3.
Alternatives for implementation clauses
a.
A binding and detailed option;
b. A binding and deference option; or
c. A Soft Law option.
II. International investment law, host States and investors would benefit from
IIAs encouraging State Parties to implement legislation to prevent, minimize
and address international investment arbitrations (cont’d.)
3.
Alternatives for implementation clauses
Binding and detailed Implementation Model Clause:
“ As part of the implementation of this Agreement each Contracting
Party shall establish a lead State agency (“LSA”) which shall:
i.
ii.
iii.
iv.
coordinate communications between investors of the other
Contracting Party and the Contracting Party in case an
international investment arbitration arises;
coordinate the State’s actions and defense in an international
investment arbitration; and
have the power and authority to collect evidence domestically
when the Contracting Party which it represents acts as a
party in an international investment arbitration;
have the power and authority to negotiate, on behalf of the
Contracting Party, settlement agreements with disputing investors
of the other Contracting Party.”
II. International investment law, host States and investors would benefit
from IIAs encouraging State Parties to implement legislation to prevent,
minimize and address international investment arbitrations (cont’d.)
3. Alternatives for implementation clauses
b. Binding and Deference Implementation Model Clause:
“As part of the implementation of this Agreement each
Contracting Party shall increase its ability to prevent
investor-State disputes and its readiness in case of
international investment arbitrations.”
II. International investment law, host States and investors would benefit
from IIAs encouraging State Parties to implement legislation to prevent,
minimize and address international investment arbitrations (cont’d.)
3. Alternatives for implementation clauses
c. Soft Law Implementation Model Clause:
“Each Contracting Party should, to the extent possible,
prevent investor-State disputes and increase their
readiness in case of international investment
arbitrations.”
III. Measures and actions derived from the model
clauses on management and implementation of IIAs
obligations
1. Monitoring investment obstacles as a component of
investment facilitation
2. Effective administration of investment obligations
a. Designation of a lead state agency – LSA
b. Granting authority to LSA to collect evidence
c. Procedures for interagency consultations
d. Designation of contact persons for investment matters
e. Budget of LSA
f. Application of non-procurement but transparent rules to
effectively advance the State’s defense
III. Measures and actions derived from the model
clauses on management and implementation of IIAs
obligations
2. Effective administration of investment obligations
a. Designation of a lead state agency
i.
Resource on investment treaty obligations;
ii.
Provide support in investment treaty negotiations;
iii.
Record keeper of investor-State proceedings for use of policy
makers and counsel in future claims;
iv.
State contact for alleged aggrieved investors;
v.
Facilitate early amicable settlement of disputes;
vi.
In case of claims lead the defense of the State – liaise with
outside counsel, experts and witnesses where appropriate
III. Measures and actions derived from the model
clauses on management and implementation of IIAs
obligations
2.
Effective administration of investment obligations
b.
Granting authority to LSA to collect evidence
- Power to direct the gathering of evidence and information relevant to the
dispute, including power to request evidence from all relevant government
agencies.
- Punitive and disciplinary consequences by uncooperative agencies?
c.
Procedures for interagency consultations
- Prior establishment of rules giving authority to the LSA may prevent
agencies from questionning who should lead the case.
- LSA should consult agencies with technical knowledge but should be
empowered to proceed with a defense strategy absent unanimity in the
interagency consultation process
III. Measures and actions derived from the model
clauses on management and implementation of IIAs
obligations
2. Effective administration of investment obligations
d. Designation of contact persons for investment matters
- Who will be the contact person in each investment related
agency?
- Who will receive the training on investment treaty obligations?
e. Budget of LSA
- Sufficient resources to cover first year of expenses of an i-S
dispute – arbitral tribunal, administration fees, attorney and
expert witnesses
III. Measures and actions derived from the model clauses on
management and implementation of IIAs obligations
2. Effective administration of investment obligations
f.
Application of non-procurement but transparent rules to
effectively advance the State’s defense
- Expeditiousness in assembling and hiring a defense team in a
transparent manner may be achieved if certain rules are in
place prior to the existence of a dispute.
IV. Conclusions
Reference:
Managing Investment Treaty Obligations and Investor-State Disputes: A Guide for Government
Officials’, Jose Antonio Rivas and David Pawlak, in T.E. Carbonneau and M.H. Mourra (ed),
Latin American Investment Treaty Arbitration. The Controversies and Conflicts, (The Hague:
Kluwer Law International, 2008)
Thank you,