Ref. Ares(2017)1447535 - 17/03/2017
Ref. Ares(2017)1903424 - 10/04/2017
From:
Art. 4.1(b)
(TRADE)
Sent:
30 January 2017 12:46
To:
TRADE LIST B2;
Art. 4.1(b)
(TRADE);
Art. 4.1(b)
(TRADE)
Cc:
Art. 4.1(b)
(SJ);
Art. 4.1(b)
(TRADE);
Art. 4.1(b)
(SJ);
Art. 4.1(b)
(SJ)
Subject:
27/01 expert meeting - Investment Protection Standards under ECT
-
summary report
Attachments:
Presentation responsibility of business to respect human
rights.pdf
Last Friday I participated at the ECT investment expert meeting on ‘Investment
Protection Standards under ECT’ attended by the
delegates (JPN, EU, EU MS), UNCTAD, UNCITRAL, academia, law firms and energy
companies. The first session consisted of
presentations made by UNCTAD on the recent trends and developments of IP
standards in IIAs, UNCITRAL on transparency and EU on
its new approach to substantive rules.
Art. 4.1(b)
(Volterra Fietta) made a presentation on investors’
obligations (BHR) under international law, concluding there were
none and debating pros and cons of creating such rules (suggesting this was not
desirable - in general and under ECT). Instead, she
argued that the existing gap in investors ‘responsibilities’ under international
law should rather be bridged through reinforced national
rules, their improved enforcement by the states and soft law instruments (RBC
due diligence). I attach her presentation which features
some interesting case law, including Urbaser ICSID award suggesting to the
opposite.
The second part of the meeting turned into a ‘free style’ discussion of
different ECT standards (mostly FET, umbrella clause and indirect
expro) with some useful take-aways listed below. Considerable part of the
meeting was initially dedicated to the discussion on the very
purpose of this exercise, where EU argued that the objective should be not be to
look solely into consistency in application and
interpretation of the existing disciplines under ECT (initial pitch suggested by
the ECT Secretariat) but also at the benchmarking of the
existing ECT disciplines to their 'modernised' form.
*
academics and practitioners seem to agree that there is no inconsistency
in interpretation or application of the ECT investment
protection standards by the tribunals; some perceived inconsistencies in
application (rare though) are linked to the quality of
the pleadings and the facts of the case;
*
no conclusive result in discussion whether there would be a case for
bringing more clarity and predictability to ECT text by
codifying the existing trends in tribunal interpretation of ECT standards - with
the practitioners in general opposing such idea
(‘the rules are made by the tribunal’), while some academics recognising value
added in such approach;
*
areas where some interpretative guidance could be useful: methodology
for assessment of indirect expropriation and
calculation of compensation; lot of opposition to any ‘CETA style’ clarification
of FET; reaffirming right to regulate not
needed legally but may be considered as a policy choice;
*
difficulty to draw a line between ‘clarification’ and actual ‘revision
of the content’ of the disciplines, with prevailing view
around the table that a codification of the existing tribunal interpretation
would probably qualify as clarification but any
departure from it would probably be viewed as a revision of the discipline (with
a clear consequence for an appropriate
instrument to be used)
*
in terms of concrete proposals:
- suggestion to publish a digest of ECT awards
- explore possibility of interpretative statements by the Charter
Conference
- Protocol/Treaty amendment not realistic; rather empower Contracting
Parties to issue binding interpretation of
ECT (reference to NAFTA FTC)
As a next step, ECT Secretariat will prepare a summary of the meeting on the
basis of which it will elaborate a discussion paper to be
submitted to the next IMPL Group in March.
Art. 4.1(b)
European Commission
DG TRADE
Unit B2 Investment
Art. 4.1(b)