6 - EU Approach to International Investment Regimes and Climate Change Mitigation Flashcards
What does this lecture on the EU’s approach to international investment regimes and climate change mitigation touch upon? (6)
1/ role and place of envtal protection in EU investment law and policy
2/ EU current substantive approach to investment protection standards
3/ relationship of invst protection standards and MS + EU ability to take necessary measures to combat CC
4/ EU current procedural approach to invst protection
5/ relationship procedural approach to invst protection and MS + EU ability to take necessary measures to combat CC
6/ ability EU to reform IIL under EU law, esp. in relation to existing & new invst agreements of EU and MS
Which case is discussed as explanatory example?
Rockhopper case
Considerations on Rockhopper case? (7)
1/ 2005 exploration permit
2/ 2010 prohibition of offshore drilling
3/ 2012 & 2014 legal exceptions to prohibition
4/ 2016 law ending exceptions
5/ 2016 denial of permit
6/ 2017 arbitration proceedings
7/ 2022 240 million EUR award
Key questions of this lecture? (5)
1/ relationship btwn IIL and CC policies?
2/ impact of IIL on CC policies?
3/ what is response of EU?
4/ can EU meaningfully reform IIL?
5/ is EU approach to IAs adequate in light of its int. climate ambitions?
History IIL? (4)
1/ colonial era (1800-1945)
2/ post-colonial era (1945-1990)
3/ global era (1990-2014)
4/ era of contestation (2014-current)
Characteristics colonial era IIL? (5)
1/ friendship, commerce and navigation treaties
2/ rational and content: protection of ind. doing business abroad
3/ strong ties with trade
4/ min, standards of protection for nationals doing business abroad
5/ espousal for DS
Characteristics post-colonial era IIL? (4)
1/ separation from trade agreements, mainly bilateral agreements
2/ North-South dynamics
3/ introduction of ISDS
4/ protection of ind. and legal entities
Characteristics global era IIL? (3)
1/ end of history?
2/ changing dynamics in int. political economy
3/ key examples: ECT, NAFTA
Characteristics era of contestation IIL? (3)
1/ litigation on agreements
2/ termination of IIAs
3/ efforts to reform IIAs
Why are IIAs concluded? (3)
1/ initially, to facilitate commerce
2/ then, to protect and attract capital
3/ now, again to facilitate commerce
For whose and what benefit are IIAs concluded? (2)
1/ from individuals to corporations
2/ from protection of goods to all possible forms of invst
What do IIAs include? (2)
1/ initially, min. standard of protection & espousal
2/ now, elaborate invst protection standards & ISDS
History of EU relationship to IIL? (3)
1/ Treaty of Rome period (1958-1991)
2/ Treaty of Maastricht period (1991-2007)
3/ Treaty of Lisbon
Characteristics of Treaty of Rome period? (4)
1/ limited liberalisation of intra-EU capital movements
2/ no need for common external capital regime
3/ Keynesian thinking dominant (gvt involvement & control over capital flows)
4/ rejection of EU BITs
Characteristic Treaty of Maastricht period?
Limited EU competence related to invst liberalisation with third countries (current Art. 63 TFEU)
Characteristics Treaty of Lisbon period? (4)
1/ inclusion of FDI in scope of CCP (Art. 207 TFEU)
2/ shared competence for portfolio invst (Arts. 63 and 216(1) TFEU)
3/ shared competence for ISDS
4/ shared competence for termination of MS BITs (Arts. 207 and 63 TFEU)
What are substantive basics of IIL? (3)
1/ def. of investment
2/ def. of investor
3/ market access
Investment protection standards? (4)
1/ national treatment
2/ MFN treatment
3/ fair and equitable treatment
4/ right to compensation for expropriation
Procedural basics of ISDS? (4)
1/ foreign investor access to int. arbitration over any asset
2/ generally no exhaustion domestic remedies
3/ remedies
4/ procedural rules (ICSID, UNCITRAL, enforcement)
What are challenges for climate mitigation policies? (5)
1/ weak role and place of CC policies in invst treaties
2/ regulatory chill and ISDS
3/ just and fair transition
4/ flexibility in relation to CC policies
5/ ‘green’ investments under invst policies
Considerations on regulatory chill? (3)
1/ incentives for gvts to be less ambitious or abandon CC policies
2/ direct and indirect effects
3/ delays, modification and abandonment
What is a concrete example of challenge for climate mitigation policies?
NZE scenario and oil & gas projects
What are advantages of using ICSID for fossil fuel investors? (8)
1/ higher amounts of compensation
2/ one-sided
3/ broad scope
4/ enforceable rights
5/ detached from national law
6/ exclusively focused on investor rights
7/ governed by invst arbitration community
8/ limited transparency
What are responses to the situation of challenges to climate mitigation policies? (2)
1/ termination
2/ reform
Considerations on termination IIAs? (3)
1/ is it even possible?
2/ either withdrawal, denunciation or agreement
3/ sunset clauses
What is an interesting example of termination of IIAs? (4)
1/ South Africa Investment Protection Act 2015
2/ unilateral internal act
3/ copies investment rights from IIAs
4/ subjects disputes to jurisdiction of domestic courts
What types of reform are possible? (3)
1/ procedural
2/ investor rights
3/ investor obligations
Which procedural reforms are envisageable? (6)
1/ no ISDS
2/ exhaustion of domestic remedies
3/ carve-out of ISDS
4/ transparency requirements
5/ third party rights
6/ counterclaims
Which reforms of investor rights are envisageable? (3)
1/ carve-outs for definition of investment or investor
2/ change def. of substantive investor rights (e.g. FET)
3/ interpretative instruments
What is the EC’s response to EU IIAs? (5)
1/ ‘save the system’
2/ 2015 Commission Concept Paper
3/ 2015 TTIP proposal for an Investment Court System
4/ right to regulate clauses
5/ more language clarifying substantive rights
What would procedural aspects of the Investment Court System be? (3)
1/ appeal mechanism
2/ roster of arbitrators
3/ prepare for Multilateral Investment Court
Contribution of Opinion 1/17? (4)
1/ competence void
2/ incompatibility of IA with EU law if amendment or withdrawal of legislation required bc of assessment made by a tribunal outside EU on level of protection
3/ EU cannot conclude IAs setting up bodies competent to call into question choices democratically made on, e.g., level of envtal protection
4/ but only so if body can only award monetary damages, leading to a requirement to abandon achievement level of protection
EP position on IIL and climate mitigation policies? (2)
1/ 2017: consent to Council decision concluding CETA
2/ 2022: resolution on future of EU int. invst policy
What does EP resolution on future of EU int. invst policy contain? (3)
1/ carve-out for invst in fossil fuels
2/ exhaustion domestic remedies
3/ 3rd party rights
Considerations on ‘modernisation’ of ECT? (4)
1/ ECT = multilateral trade and invst agreement in energy sector (1998)
2/ 2018: EU modernisation initiative
3/ MS and Council not in favor
4/ EP resolution: full withdrawal if EC proposes
What can and does the EU do with respect to MS IIAs? (3)
1/ termination of existing MS IIAs (either by EU or by MS)
2/ blocking new or renegotiated agreements
3/ conditioning authorisation
Recap? (2)
1/ IIL entered a period of contestation as result of use by foreign investors of ISDS against public policy measures (incl. those aimed at addressing CC)
2/ EU response has largely been to save the system by making procedural and substantive changes to new IIAs
