International investment agreement (IIA) reform remains a daunting task for all member States, with challenges exacerbated by the COVID-19 pandemic. Policymakers, IIA practitioners, civil society and legal scholars need to urgently take stock of ongoing reform efforts in times of COVID-19, both in terms of what IIA reform measures countries and regional organizations undertook or are considering undertaking in response to the crisis, and how to maintain and strengthen the reform momentum in light of the increased fragility of economies around the world that places added emphasis on the importance of FDI as a means of development finance. The 2021 IIA Conference will aim to pave the way for further inclusive, transparent, and synchronized IIA reform processes in the pursuit of sustainable development in the post-COVID-19 era.
Forward-looking IIA reform is well under way. All treaties concluded in 2020 contain several reform features that are in line with the UNCTAD’s Reform Package for the International Investment Regime (2018) or the UNCTAD Investment Policy Framework for Sustainable Development (2015). These features address five areas i) safeguarding the right to regulate, while providing protection ii) reforming investment dispute settlement iii) promoting and facilitating investments iv) ensuring responsible investment v) enhancing systemic consistency. UNCTAD policy tools have also spurred action to modernize old-generation treaties. Countries are increasingly interpreting, amending, replacing or terminating outdated treaties (Phase 2 of IIA Reform).
Given that, to date, such reform actions have addressed a relatively small number of IIAs, there is broad scope and urgency to pursue them further. Currently, the stock of old-generation treaties is 10 times greater than the number of modern, reform-oriented treaties and the majority of known investor–State dispute settlement cases have to date been based on old-generation treaties.
UNCTAD’s newly launched IIA Reform Accelerator offers a practical tool for intensifying IIA reform efforts. Based on a stocktaking of recent reform efforts, the 2021 High-level IIA Conference will offer the platform for accelerating IIA Reform and taking concrete steps towards a more coherent and consolidated process for modernizing old-generation IIAs.
Issues to be addressed
- Taking stock of IIA reform efforts
- Reforming investment dispute settlement
- Accelerating IIA reform in the public interest
- Taking stock of the reform of the IIA regime
- Way forward – accelerating IIA reform