UN trade body meets to promote sustainability in international investment agreement regime
Responsible Investor | 6 Feb 2014
UN trade body meets to promote sustainability in international investment agreement regime
Bid to ensure sustainability is factored in to cross-border investment framework
by Daniel Brooksbank
The United Nations Conference on Trade and Development (UNCTAD) is convening a meeting later this month in a bid to make sure that sustainability is embedded in the global country-level ‘International Investment Agreement’ (IIA) regime for cross-border investment.
An IIA is a treaty between countries covering cross-border investments, usually foreign direct investment (FDI) and portfolio investment – and there is an acknowledgment that the system needs reform. “Challenges arising from the negotiation of IIAs and their implementation suggest that the time has come to revisit the IIA regime with a view to transforming it,” UNCTAD says. The three-day event aims to develop “concrete strategies and action points” to shape a sustainable-development friendly framework. As a sign of the urgency being felt, speakers are being asked to limit their contributions to just two pages and identify “tangible, workable solutions”.
The event follows on from an earlier meeting at the World Investment Forum 2014 which UNCTAD says helped “sketched the contours” of reform of the IIA regime. Also feeding in to it is UNCTAD’s 2012’s Investment Policy Framework for Sustainable Development (IPFSD) document.
The framework is facing two challenges, according to evidence from UNCTAD’s Director of Investment and Enterprise, James Zhan, at the European Parliament last month in a session on the controversial Transatlantic Trade and Investment Partnership (TTIP) EU-US trade pact. The first is “policy space” and the second was how to integrate sustainable development objectives into IIAs.
“Most existing IIAs follow the approach of focusing more or less exclusively on investment promotion and protection, while largely neglecting the sustainable development impact of investment,” Zhan said.
“Only recently, have new IIAs begun to illustrate a growing tendency to craft treaties that are in line with sustainable development objectives.”
He went on to explain that investment policies do not exist in isolation, but interact with other policy areas, such as environmental policies, trade policies, social policies, labour policies, or industrial policies : “Any IIA reform needs to take this interaction into account.”
The ‘Transformation of the International Investment Agreement Regime’ event takes place in Geneva on February 25-27. A provisional agenda is available here.
