The IIA universe is evolving in numbers and in content. In recent years, numerous countries have taken a new approach to international investment policy making, aiming at designing treaties that are more conducive to sustainable development. Countries' past experiences (e.g. with the close to 740 investor-State dispute settlement (ISDS) recorded on UNCTAD's ISDS Navigator
so far) have highlighted that there is a pressing need for systematic reform of the global IIA regime to bring it in line with today's sustainable development imperative. As evident from UNCTAD's IIA Navigator and UNCTAD's IIA Mapping Project
[as documented in UNCTAD's 2016 World Investment Report
], reform to bring the IIA regime in line with today’s sustainable development imperative is well under way. A review of 21 bilateral IIAs concluded in 2015, for which texts are available, shows that all have included a clause to safeguard the right to regulate and have at least one sustainable development-friendly clause. Evidence of IIA reform is particularly pronounced when comparing treaties over time.
UNCTAD policy tools, notably its Investment Policy Framework for Sustainable Development and its Roadmap for IIA Reform
are helping shape such reform efforts. About 100 countries, including those that undertook a review as part of the regional organizations they are a member of, have used the UNCTAD Investment Policy Framework for Sustainable Development when reviewing their IIA networks, and about 60 of these have used the UNCTAD Policy Framework when designing their treaty clauses.
- Preamble: Refer to the protection of health and safety, labour rights, environment, or sustainable development
- Definition of covered investment: Expressly exclude portfolio investment, sovereign debt obligations, or claims to money arising solely from commercial contracts
- Definition of covered investor: Include *denial of benefits * clause "
- Most-favored-nation treatment: Specify that such treatment is not applicable to other IIAs' ISDS provisions
- Fair and equitable treatment: Refer to minimum standard of treatment under customary international law
- Indirect expropriation: Clarify what does and does not constitute an indirect expropriation
- Free transfer of funds: Include exceptions for balance-of-payments difficulties and/or enforcement of national laws
- Public policy exceptions: Include exceptions, e.g. for the protection of human, animal or plant life, or health; or the conservation of exhaustible natural resources
At the High-level IIA Conference, held as part of UNCTAD World Investment Forum (WIF) 2016
, 19 July 2016, Nairobi, Kenya more than 40 ministers, chief negotiators, parliamentarians, and representatives of intergovernmental organizations and civil society discussed IIA reform and brainstormed options for the next phase of IIA reform - that is reform through which countries will address the existing stock of treaties. The high-level event emphasized the need for intensified international coordination for that second phase of reform and called upon UNCTAD to support it by providing a platform for exchange and developing further policy tools.
One area of suggested reform to improve the coherence of investment agreements with domestic policies and regulation in the public interest has been in relation to investor-state dispute settlement. In late 2015 the European Commission proposed the creation of an Investment Court System
to replace the ad hoc arbitration tribunals currently used. However, a July 2016 report by the Independent Expert on the promotion of a democratic and equitable international order
to the Human Rights Council in Geneva argued that the newly proposed investment court system suffers from the same fundamental flaws as investor-State dispute settlement and lacks the fundamental safeguards to ensure an independent legal system in line with the requirements of due process.