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The Knowledge to Act.
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IISD | Economic Law and Policy Program
How IISD's Economic Law and Policy Program is advancing sustainable and equitable development

NOVEMBER 2018

NEW DEVELOPMENTS ON ISDS IN NORTH AMERICA


Over the past year, we have been closely watching the negotiation of the new trade deal between Canada, the United States and Mexico. Of particular interest to us were the developments around investment. In the early nineties, it was the North American Free Trade Agreement (NAFTA) that had put the famous investor-state dispute settlement mechanism (ISDS) on the map. Now, the new United States-Mexico-Canada Agreement (USMCA) has taken it off again – at least between the United States and Canada. What does this mean for Canada as the country develops a new model for its investment promotion and protection agreements (FIPAs)? What does it mean for broader developments around ISDS reform, when the most active users of ISDS retreat?

In our submission to the government, we argue that the narrow focus on investment protection and investment liberalization dominating Canada’s current foreign investment promotion and protection agreements (FIPAs) should be redesigned to put the Sustainable Development Goals (SDGs) at their core. Traditional investor-state dispute settlement (ISDS) mechanisms need to be reassessed, corporate social responsibility prioritized, and gender equality and women’s economic empowerment further enhanced.  
  
Nathalie Bernasconi-Osterwalder
Group Director, Economic Law and Policy Program

IS MOONLIGHTING A PROBLEM? NOT ANYMORE, AS ICJ JUDGES STOP ACTING AS ARBITRATORS IN INVESTOR-STATE DISPUTES AFTER IISD PUBLISHES ITS INFLUENTIAL STUDY ON THE ICJ


Members of the International Court of Justice (ICJ) have announced that they will no longer participate in investor-state arbitration or in commercial arbitration. IISD’s report issued in late 2017 analyzing the judges’ increased participation in investment arbitration was instrumental for this most recent development. We welcomed the news, a crucial step towards ensuring the ICJ’s reputation for independence as the highest authority on public international law remains intact.  

ASSISTING DEVELOPING COUNTRIES NAVIGATE BEPS IN MINING

For many resource-rich developing countries, mineral resources present a significant economic opportunity to increase government revenue. Tax base erosion and profit shifting (BEPS), combined with gaps in the capabilities of tax authorities in developing countries, threaten this prospect. This is why we’re addressing challenges developing countries face in raising revenue from their mining sectors by providing a series of practice notes and tools developed specifically for governments.

PROVIDING POLICY-MAKERS THE TOOLS
FOR CREDIT ENHANCEMENT OPPORTUNITIES

Policy-makers and infrastructure planners are tasked with spurring economic and social development by closing the infrastructure gap. At the same time, they deal with budgetary constraints, debt ceilings and more. To help governments reach their goals and improve the financial feasibility of sustainable infrastructure projects, our public procurement and infrastructure financing team developed a new inventory on credit enhancement instruments, accompanied by a new research paper.

CONTRACT FARMING TEMPLATES AVAILABLE


Together with FAO and UNIDROIT, we launched the Model Agreement for Responsible Contract Farming, a simple and practical legal tool for buyers and producers to improve their business relatiosn and help make responsible agricultural investment a reality. It can help address power asymmetries, create more equitable and sustainable business relationships, and support a transparent business environment for contract farming schemes. The Model Agreement provides simple, customizable template provisions, which can be adapted by the parties to suit the commodity, context and parties' specific needs.

TRANSFORMING AGRICULTURE IN AFRICA AND ASIA

Successfully eradicating poverty through agriculture depends on whether a country has enough agricultural land, how fertile it is and the demographic pressures, according to our latest report. Launched in partnership with the International Food Policy Research Institute (IFPRI), the findings are from a first-of-its-kind framework tracking 117 countries over 45 years to understand which policies have succeeded or failed.

With only 10 countries still categorized by subsistence agriculture, compared with 30 in 1970, our report is a clear indication agricultural transformation fosters economic empowerment for countries and their communities. Learn more about the findings online.

FOSTERING MODERN LAW AND POLICY IN MINING


The Intergovernmental Forum on Mining, Minerals, Metals and Sustainable Development (IGF) hosted its 14th Annual General Meeting (AGM) from October 15-19 in Geneva. This year's topic focused on modern mining law and policy, fostering accountable, equitable and innovative approaches. More than 400 delegates participated, including participants from 75 countries, as well as representatives from international organizations, industry associations and civil society. The IGF was also pleased to welcome Afghanistan, Colombia, Fiji, Laos, Sudan and Thailand as new members since last year's AGM. Read the communique to learn more.

ADVANCING DIALOGUE ON INVESTMENT
FOR SUSTAINABLE DEVELOPMENT

International investment governance is in the process of renewal with approaches emerging that take a more holistic approach, rebalance the rights and obligations of different stakeholders, and integrate a sustainable development lens. At the 2018 World Investment Forum (WIF), we organized discussions on ways to articulate and incorporate investor obligations in international investment agreements and on the future of investment-related dispute settlement.

HIGHLIGHTING THE IMPACT OF SUSTAINABILITY STANDARDS

The standards team worked with key stakeholders in Guatemala to identify and respond to their capacity strengthening needs, with a particular focus on Voluntary Sustainability Standards (VSSs) as an effective sustainable development tool. Learn more about our work in sustainability standards.

ADDITIONAL RESOURCES

Business and Human Rights: Read our submission to the crowd-drafting session of the 2018 UN Forum on Business and Human Rights.

Webinars: Listen to our webinar on developing and negotiating based on a model investment treaty.

Mining: Access three local content expert papers online: exploring downstream linkages, designing local content policies and stimulating direct local employment.

Investment treaties: Read our quarterly online journal on investment law and policy from a sustainable development perspective.

Blogs: Learn what our CEO Scott Vaughan had to say about the WTO's uncertain survival as Ministers met in Canada, if food labelling improvements reduce obesity rates and what bears and smartphones have in common.

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