News in Brief

UNCITRAL launches new transparency registry

The UNCITRAL Secretariat has established a transparency registry[1] that will function as a repository for the publication of information and documents in treaty-based investor-State arbitration. This follows the entry into force of the UNCITRAL Rules on Transparency in treaty-based investor-State arbitration on April 1, 2014.[2]

The registry will contain information on the commencement of an arbitration, and make available a wide range of documents, including transcripts of hearings; orders, decisions and awards of the arbitral tribunal; and submissions to the tribunal.

The UNCITRAL Rules on Transparency are an integral part of the UNCITRAL arbitration rules and will apply on a default basis to UNCITRAL investor-State arbitrations conducted under investment treaties concluded after April 1, 2014.

The UNCITRAL arbitration rules are among the most common rules for settling investor-State arbitration, and had long been criticized for their secretive nature.

Indonesia terminates bilateral investment treaty with the Netherlands

In March the Dutch Ministry of Foreign Affairs announced that Indonesia has decided to terminate its bilateral investment treaty with the Netherlands. Indonesia has faced a number of treaty-based claims in recent years.

The Dutch Ministry stated: “Indonesia has informed the Netherlands that it has decided to terminate the Bilateral Investment Treaty (official title: Agreement between the Government of the Republic Indonesia and the Government of the Kingdom of the Netherlands on Promotion and Protection of Investment) per July 1, 2015.

From that date onwards the provisions of the Agreement will continue to apply only to investments made prior to that date, for a period of fifteen years. The Indonesian Government has mentioned it intends to terminate all of its 67 bilateral investment treaties. The Netherlands is discussing the matter with the Indonesian authorities.”[3]

The Netherlands’ portfolio of nearly a 100 BITs is one of the largest in the world. It has also been the focus of particular controversy. Together with a favourable tax regime, Dutch BITs have been accused of forming a strategy to attract so-called mail box companies (i.e. business with no real economic activity in the country).

Germany balks at investor-State arbitration in the Transatlantic Trade and Investment Partnership

Germany’s Ministry of Economy announced in March that it opposed investor-State dispute settlement provisions in the EU-US trade pact that is currently under negotiation, according to a report in the Financial Times.[4]

Opposition to investment arbitration by civil society groups has swelled in Europe, leading the Commission to open a public consultation on the matter (see the next story item).

Germany had previously approved a mandate for the European Commission to negotiate on investor-State arbitration, along with other EU member states. But speaking to the German parliament, Brigitte Zypries, a junior economy minister, explained that the German government now believes that “US investors in the EU have sufficient legal protection in the national courts.”

According to the Financial Times, Ignacio Garcia Bercero, the EU’s chief negotiator, and Dan Mullaney, the US lead negotiator, declined to comment on Germany’s position.

Germany’s stance on investor-State comes as a surprise; the country has the largest portfolio of BITs in the world. It also has the distinction of having signed the first ever BIT in 1959, with Pakistan.

European Commission launches public consultation on investment provisions in TTIP

The European Commission has invited the public to comment on its approach to investment protection and investor-State dispute settlement provisions in negotiations with the United States over the Transatlantic Trade and Investment Partnership Agreement (TTIP).

According to the Commission, “the key issue … is whether the EU’s proposed approach for TTIP achieves the right balance between protecting investors and safeguarding the EU’s right and ability to regulate in the public interest.”

The Commission is seeking feedback through a detail questionnaire available online.[5] The consultation is open until July 6, 2014.

Campaigners from the Seattle to Brussels Network have criticized what they label a “mock consultation.”[6] In a statement from the network, Marc Maes of the Belgian development organisation 11.11.11 said the “Commission’s so-called reform agenda does nothing to address the basic flaws of the investor-state dispute settlement system. Foreign companies will continue to have greater rights than domestic firms and citizens. And international tribunals consisting of three for-profit lawyers will continue to decide over what policies are right or wrong, disregarding domestic laws, courts and democracy.”