Aligning Investment Treaties with Sustainable Development Goals (original) (raw)

Abstract

is the Investment Law and Policy Head at the Columbia Center on Sustainable Investment ("CCSI"). Her work at CCSI centers on analyzing investment treaties and treaty-based investor-state arbitrations, and examining the implications those instruments and cases have for host countries' domestic policies and sustainable development strategies. In addition, she concentrates on key institutional and procedural aspects of the investment law framework, including efforts to increase transparency in and legitimacy of investor-state dispute settlement. She has a B.A. from Yale University, a J.D. from the University of Arizona, an LL.M. from Columbia Law School, and is admitted to the bar in California. ** Lisa Sachs is the Director of CCSI, where she oversees three areas of focus: investments in extractive industries, investments in land and agriculture, and investment law and policy. She received a B.A. in economics from Harvard University, and earned her J.D. and M.A. in international affairs from Columbia University, where she was a James Kent Scholar and recipient of the Parker School Certificate in International and Comparative Law. She is admitted to the bar in New York. *** Nathan Lobel is a J.D. candidate at Harvard Law School, where he focuses on climate policy and political economy. Prior to law school, he was the Special Assistant to the Director of CCSI, where his scholarship centered on international governance and the clean energy transition. He received his B.A. in political science from Yale University with high honors, during which time he also worked with the Yale Program on Climate Change Communication and as a fossil fuel divestment organizer.

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References (40)

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  14. Johnson et al (58-1) (Do Not Delete) 11/27/2019 2:08 PM 104 COLUMBIA JOURNAL OF TRANSNATIONAL LAW [58:1
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  17. Johnson et al (58-1) (Do Not Delete) 11/27/2019 2:08 PM 112 COLUMBIA JOURNAL OF TRANSNATIONAL LAW [58:1 ration on taxation of MNEs so as to help prevent companies from us- ing their global networks to evade and avoid taxes. 169 Governments have also been working together to help understand competition ef- fects of cross-border mergers and acquisitions, enforce their anti-trust laws and prevent abusive market practices. 170 But much remains to be done. IIAs aiming to increase MNE activities should play a role, helping to anticipate and monitor the governance gaps that MNEs fall into (or purposefully exploit), and supporting collaboration (on a special and differential treatment ba- sis) to close those gaps 171 or remedy their effects. 172 Relevant activi- ties can include technical and financial support, 173 agreements to co- operate on rule-making, monitoring, and enforcement relating to international corporate activities, and efforts to establish funds and 169. See OECD, ACTION PLAN ON BASE EROSION AND PROFIT SHIFTING 9-10 (2013), available at https://www.oecd.org/ctp/BEPSActionPlan.pdf [https://perma.cc/EF5T-H797\] (calling for countries to establish domestic and international legal and administrative frameworks for exchange of country-by-country reports by multinational enterprises); see also OECD/G20, BASE EROSION AND PROFIT SHIFTING PROJECT, TRANSFER PRICING DOCUMENTATION AND COUNTRY-BY-COUNTRY REPORTING: ACTION 13: 2015 FINAL REPORT 10 (2015), available at https://www.oecd-ilibrary.org/docserver/9789264241480- en.pdf?expires=1569526881&id=id&accname=ocid177456&checksum=C569710B4BFBFD AB10B0A658D45D4390 [https://perma.cc/JEP6-AKVR.\]. The Inclusive Framework on BEPS, which seeks to involve countries beyond the G20 and OECD in implementing the BEPS agenda, requires monitoring and enforcement of certain BEPS minimum standards, including Action 13. OECD, INCLUSIVE FRAMEWORK ON BEPS: PROGRESS REPORT JULY 2016-JUNE 2017, at 7-10 (2017), available at https://www.oecd.org/tax/beps/inclusive- framework-on-BEPS-progress-report-july-2016-june-2017.pdf [https://perma.cc/7ZRA- YD6R] [hereinafter INCLUSIVE FRAMEWORK ON BEPS].
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  19. For some ideas of how to close governance gaps in IIAs to improve corporate accountability, see generally Nathalie Bernasconi-Osterwalder & Joe Zhang, Integrating Investor Obligations and Corporate Accountability Provisions in Trade and Investment Agreements: Meeting Report, INT'L INST. FOR SUSTAINABLE DEV. (Apr. 2018), https://www.iisd.org/library/integrating-investor-obligations-and-corporate-accountability- provisions-trade [https://perma.cc/B35P-Y4H4\]. For a discussion of possibilities for increased bilateral or multilateral efforts to address anti-trust issues, see, e.g., Corporate Rent-Seeking, supra note 146, at 4.
  20. Alessandra Mistura, Integrating Civil Liability Principles into International Investment Law: A Solution to Environmental Damage Caused by Foreign Investors?, in YEARBOOK ON INTERNATIONAL INVESTMENT LAW AND POLICY 446, 481-84 (Lisa Sachs, Jesse Coleman & Lise Johnson eds., 2019).
  21. As noted by the OECD, complying with the BEPS framework requires significant capacity and resources and can be challenging for developing countries to implement. See INCLUSIVE FRAMEWORK ON BEPS, supra note 169, at 9.
  22. Johnson et al (58-1) (Do Not Delete) 11/27/2019 2:08 PM 2019] ALIGNING IIAs WITH SDGs 113
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  27. Johnson et al (58-1) (Do Not Delete) 11/27/2019 2:08 PM 116 COLUMBIA JOURNAL OF TRANSNATIONAL LAW [58:1
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  32. Johnson et al (58-1) (Do Not Delete) 11/27/2019 2:08 PM 2019] ALIGNING IIAs WITH SDGs 117 goals-targeted supports (financial, technical, or otherwise) for ener- gy or forest conservation or clean energy investment, for instance- as well as sticks to discipline continued fossil fuel dependence. Mounting research has chronicled the challenges that IIAs could pose for climate change. These include: generating increased greenhouse gas ("GHG") emissions due to increased overall econom- ic activity, transit of goods, and liberalization of restrictions on ex- port of fossil fuels. 193 Additionally, experts have highlighted that trade and investment disciplines may make it harder for governments to adopt and maintain climate friendly policies. Restrictions on local content requirements, for example, may prevent governments from using tools that can be crucial for securing political buy-in for renew- able energy projects; 194 other treaty provisions can be used to chal- lenge climate change measures such as restrictions on new fossil fuel-exploration or exploitation projects, or phase out of fossil-fuel- based infrastructure. 195 While commenters have highlighted these potential tensions, official state reviews of IIAs frequently fail to as- sess and address them. 196 But treaties could be designed differently. Apart from ensur- ing that disciplines do not unduly constrain climate policies, 197 IIAs could impose affirmative obligations to: cooperate on identifying opportunities for investment in clean technologies; provide, on a spe- cial and differential treatment basis, support for qualifying projects; reinforce or integrate commitments under climate change agree- ments; and mandate corporate disclosures of GHGs, including GHGs from outward FDI. Additionally, IIAs could require governments to provide in-
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  40. Johnson et al (58-1) (Do Not Delete) 11/27/2019 2:08 PM 118 COLUMBIA JOURNAL OF TRANSNATIONAL LAW [58:1