Updated August 2009
On July 31, CIEL along with a coalition of civil society organizations submitted written comments, as requested by the Obama Administration, in order to inform the Administration’s review of the U.S. model Bilateral Investment Treaty (BIT).
As the Administration reviews the current model bilateral investment treaty to assess whether changes should be made, CIEL and other civil society organizations expressed their numerous concerns regarding the impact of the model on the capacity of U.S. and foreign government authorities to protect the public interest. In light of these concerns, the coalition of NGOs urged the administration to revise the model BIT.
The model BIT creates a set of rights for investors (including foreign investors in the U.S.), but fails to establish obligations for investors and corporations in the communities in which they operate. The investor-State arbitration mechanism provided in the model BIT poses significant risks to the public interest because international arbitrators frequently lack expertise in and understanding of local laws and societal values that are often at the heart of investment disputes. Moreover, claims made under these agreements will be decided by ad hoc panels that are not trained in or bound by U.S. Supreme Court precedent. In addition, the decisions of these panels are not subject to review by U.S. courts to ensure that they do not deviate from U.S. law or grant greater rights to foreign investors than are accorded to U.S. investors. Nor are the panels subject to any other appellate review to ensure quality and consistency.
CIEL has testified in a public meeting hosted by the Department of State and the Office of U.S. Trade Representative regarding the U.S. model BIT CIEL is also participating in the work of the U.S. State Department’s Sub-committee on Investment, whose task includes drafting a report on the 2004 Model BIT.
CIEL and other civil society organizations shared their concerns with the U.S. government as it reviewed the 2004 model Bilateral Investment Treaty. Those concerns can be read here.
For more information, please contact Marcos Orellana.