Key findings:
On international investment treaties:
- There is a large emerging empirical literature looking at the impact of international bilateral investment treaties (BITs) on foreign direct investment (FDI), but findings are mixed on the relationship between BITs and FDI. The evidence points to investment treaties being part of a wider set of forces fostering FDI.
- Concerns on the influence on sustainable development include: i. whether investment treaties are largely a vehicle for the protection of investors without due consideration to the development concerns of developing countries; and ii. the lack of an interconnection between international investment policies and human rights, and other policy areas such as trade, finance, competition or environmental.
On international investment and commercial arbitration:
- The limited available empirical and anecdotal evidence on the effect of investment arbitration on FDI is mixed; no systematic evidence was found on the effect of commercial arbitration.
- There are a range of international dispute resolution models, but no agreed standard of good practice.
- There is an active and inconclusive debate on the effect the rise in investor-state arbitration on domestic legal institutions and rule of law.
- There are concerns that the investor-state arbitration system has some serious shortcomings and there are calls for increased transparency.
On overall capacity issues and capacity building initiatives:
- Contracts and investment treaties are complex and evidence suggests governments do not carry out cost-benefit analyses ex ante and do not appreciate fully the risks of arbitration.
- A number of international organisations are involved in initiatives to build developing countries’ capacity on international investment and commercial legal capacity.
