Making Investment Treaties Work for Sustainable Development: Addressing Challenges in Existing Agreements and Designing New Frameworks
Investment treaties are often said to be a means of attracting FDI to further sustainable development goals. But because both the causal link between investment treaties and attracting FDI, and the causal link between attracting FDI and furthering sustainable development are each uncertain and policy dependent connections, investment treaties, at least as they are currently drafted, are not sufficient means of furthering sustainable development aims. Moreover, because of the restrictions investment treaties may impose on governments’ policy options, those agreements may even frustrate governments’ efforts to implement sustainable development strategies. To date, for instance, the treaties have been used to challenge a range of measures ostensibly taken to further public interest aims, including regulating the marketing and sale of unhealthy products, banning use of harmful chemicals, strengthening review of projects’ environmental impacts, closing tax loopholes, promoting education and training, and favoring economically and socially disadvantaged groups. In order to ensure investment treaties support, rather than hinder, governments’ advancement of legitimate policy goals, states are taking steps to clarify, amend or terminate existing agreements and develop new approaches for future ones. CCSI is providing advice on these issues to governments on a confidential basis, and also supporting other inter- and non-governmental organizations on these efforts.
As one aspect of this work, CCSI has prepared a paper on the role of states in reducing uncertainty under existing treaties, and an additional paper discussing how these strategies can be applied to address the meaning of “fair and equitable treatment”, the most-favored nation treatment obligation, and the rights of shareholders to bring claims for harms to the company.