Another blogpost on the chaos in investment treaty norm setting is highlighted in this CCSI piece by Federico Ortino. He alludes to the fact that substantive treaty protections in investment treaties have been very broadly interpreted by arbitral tribunals leading to a backlash by States to re-define the scope and content of these obligations.
The situation is bleak to arrive at a consensus on this since treaty negotiators are taking diametrically opposite views - from strengthening investor protection to rescinding treaties. The lack of multilateral fora or a comprehensive agenda is adding to the chaos.
Thus, when it comes to a core aspect of the investment treaty system, investment protection, policy-makers find themselves between a rock and a hard place: investment tribunals’ shortcomings as described above, on one side, and the politically arduous multilateral mountain to climb, on the other side. Something will have to give.
Thus, when it comes to the core of reform - the substantive provisions - there is a spaghetti effect with various bilateral and regional initiatives muddying the waters. Some would argue that this is essential considering that there is no one size fits all solution or approach.
What I found interesting in the piece was a reference to "Stabilisation clauses" that also restrict change in regulatory regimes too. Reference to the Italy Mozambique BIT and the provision that restricts regulatory change is here.
Whenever, after the date when the investment has been made, a modification should take place in laws, regulations, acts or measures of economic policies governing directly or indirectly the investment, the same treatment shall apply upon request of the investor that was applicable to it at the moment when the investment was agreed upon to be carried out.
In today's reform oriented treaties and modelas, such clauses are actually unthinkable or atleast will be modified to the extent of the need for legitimate regulatory power. That itself indicates how far we have come in investment norm setting.
The trend of varied approaches is likely to contnue in 2021 as indicated in this piece:
As we move into 2021 and States continue to review their BITs, we are likely to see new alterations and alternatives to the traditional ISDS model. However, there is no panacea to the issues surrounding foreign investment. As Esmé Shirlow notes, reforms “to one procedure may produce unintended consequences for others.” Accordingly, while arbitral institutions continue to discuss their role in facilitating international investment agreements, there will still be a need for a comprehensive approach that leverages “the strengths of different dispute settlement techniques whilst minimising their weaknesses”.
Thus, we will see more of experimentation and less of uniformalisation. Perhaps, that is the way forward.