Investment treaties are an important component of the framework governing the conditions for foreign investment in many countries. About 2500 such treaties are in force today, including investment provisions of trade agreements. Many of them were designed decades ago with a different global economy and concerns in mind.
Interest in reshaping investment treaties has been growing steadily in the face of challenges from the COVID crisis to achieving the Sustainable Development Goals. The OECD work programme on the Future of Investment Treaties explores how the investment treaties of tomorrow could help address these challenges and how to deal with existing agreements in a pragmatic way. The overriding importance of confronting the climate crisis forms a core part of the work.
What does the OECD contribute?
The OECD convenes governments, stakeholders and experts from OECD and non-OECD countries to examine whether new or alternative content would lead to better outcomes on objectives including the optimal allocation of capital, regulation in the public interest, and promoting sustainable development.
Newer treaties have been designed in light of litigation experience to better achieve government intents. However, the vast majority of older treaties do not have these features. Governments meeting at the OECD are considering the implications and opportunities for older treaties of the convergence of designs in newer treaties.
OECD work on the future of investment treaties and reform complements ongoing work at UNCITRAL, UNCTAD and the WTO.
Why is this work important?
Today’s challenges such as climate change, COVID-19, the digital transformation, and achieving the Sustainable Development Goals can only be met through international and domestic investment. Poorly-designed treaties may impede progress, while well-designed investment treaties can help societies meet today’s challenges.
What is the process?
An initial two-year work programme will encompass discussions in two tracks:
Investment treaties and climate change
The overriding importance of confronting the climate crisis forms a core part of the OECD work programme on the Future of Investment treaties. The OECD Conference on Investment Treaties and Climate Change took place on 10 May 2022.
Read background paper on Investment treaties and climate change: The Alignment of finance flows under the Paris Agreement
The Conference contributes to ongoing government-led work on investment treaties and climate change at the OECD.
The OECD has also conducted a consultation on investment treaties and climate change, with a view to helping government policy makers respond to the climate change in their investment treaty policies, including alternative or complementary policies, with the benefit of a broad range of inputs.
On 10 May 2022, the 2022 OECD Conference on Investment Treaties will address investment treaties and the climate crisis. The conference will contribute to ongoing government-led work on investment treaties and climate change at the OECD.
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