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This essay reviews two books suggesting how international investment law may be recalibrated to balance the interests of foreign investors and host states. Poulsen’s book draws mainly on empirical research to argue that developing states displayed ‘bounded rationality’ when rushing to sign up to investment treaties incorporating pro-investor protections, such investor-state arbitration. Although mainly descriptive, it sketches potential reforms of the investment treaty system to achieve a more rational balance in favour of host states. By contrast, drawing on doctrinal analysis but with a keen awareness of the institutional underpinnings of international investment law and arguably analogous fields, the book by Henckels focuses on what arbitrators and commentators can do to extend a tendency to interpret substantive protections even within existing investment treaties in a more balanced way. She urges more consistent application of multi-layered ‘proportionality’ analysis, combined with principled ‘deference’ to regulatory decision-making by host states.
This chapter reveals many similarities and occasional differences in New Zealand and Australia concerning their laws on fdi screening and current approaches towards investment treaties, including the now politically sensitive issue of isds. Australia has been more active in concluding standalone bits, in light of considerably more outbound fdi (and a few claims now by its investors, notably against India and Indonesia), as well as somewhat more innovative in investment treaty drafting – although both Australia and New Zealand now largely follow the us approach epitomised by the Trans Pacific Partnership (tpp). Australia has also been subject to a high-profile isds claim, over tobacco plain packaging (2012–6), which has combined with political configurations in its bicameral parliament to complicate its contemporary approach to isds-backed treaty commitments. This recent caution may bring it closer to New Zealand’s overall trajectory, thus opening the way towards even closer collaboration to exert ‘middle power’ influence over existing and future treaty negotiations in the Asian region.
International Investment Treaties and Arbitration Across Asia brings together leading academics and practitioners to examine whether and how the Asian region has or may become a significant ‘rule maker’ in contemporary international investment law and dispute resolution. The editors introduce FDI trends and regulations, investment treaties and arbitration across Asia. Authors add country studies for the ten member states of the Association of Southeast Asian Nations as well as an overview of ASEAN treaties, or examine other potential ‘middle powers’ (Korea, Australia and New Zealand collectively) and the emerging ‘big players’ (China, Japan and India). Two early chapters present econometric studies of treaty impact on FDI flows, in aggregate as well as for Thailand, while two concluding chapters offer other normative and forward-looking perspectives.
International Investment Treaties and Arbitration Across Asia brings together leading academics and practitioners to examine whether and how the Asian region has or may become a significant ‘rule maker’ in contemporary international investment law and dispute resolution. The editors introduce FDI trends and regulations, investment treaties and arbitration across Asia. Authors add country studies for the ten member states of the Association of Southeast Asian Nations as well as an overview of ASEAN treaties, or examine other potential ‘middle powers’ (Korea, Australia and New Zealand collectively) and the emerging ‘big players’ (China, Japan and India). Two early chapters present econometric studies of treaty impact on FDI flows, in aggregate as well as for Thailand, while two concluding chapters offer other normative and forward-looking perspectives.
Thailand was initially cautious with its bilateral investment treaties (bits), consistently eschewing investor-state dispute settlement (isds). From 1989 it began agreeing to isds, but only if both states were party to the Convention on the Settlement of Investment Disputes Between States and Nationals of Other States, which Thailand signed in 1965 but never ratified. From 1993, bits increasingly provided for ad hoc arbitration. Major disputes emerged from the 1990s instead under contracts with foreign investors containing arbitration clauses. From 2004 concession contracts required Cabinet pre-approval. This limitation was extended to all public contracts from 2009, after the first treaty-based isds award against Thailand, although two further claims have been filed recently. A 2002 Model bit was revised in 2013 to incorporate more pro-host-state provisions, but Thailand had net foreign direct investment (fdi) outflows in 2011 and still concludes treaties with isds. These patterns suggest ‘more than bounded’ rationality.
Abstract
The dynamic economies of the Association of Southeast Asian Nations (
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