On April 20, 2012, the U.S. Department of State and the Office of the United States Trade Representative announced the posting of a revised Model Bilateral Investment Treaty (BIT). The new document, 42 pages in length, updates the 2004 Model BIT. Additional background materials can be found here and here.
A BIT provides binding legal rules for the treatment of one country’s investors by a foreign jurisdiction and aims to protect the interests of the overseas investor. Their general aims are to protect the interests of a country’s investors when making investments in countries where investors’ rights may not be sufficiently protected by existing treaties or international agreements. BITs cover topics such as fair and equitable treatment of foreign investors compared to domestic investors, issues of compensation if/when expropriations take place, questions concerning management personnel, and can be helpful when they address funds transfers (possibly stipulating market rates), and may also include a stipulation concerning the form of dispute resolution to be used. BITs can promote transparency and are generally seen as supporting the development of international law standards.
According to the State Department press release: “[t]he Administration made several important changes to the BIT text so as to enhance transparency and public participation; sharpen the disciplines that address preferential treatment to state-owned enterprises, including the distortions created by certain indigenous innovation policies; and strengthen protections relating to labor and the environment.”
Here is a link to the USTR page on the 40 current US BITs. Some non-U.S. BITs are here and additional investment treaty information, including other model BITs is here. BITs for OAS countries can be found here.
And, to relate this to indigenous peoples, the Chevron / Ecuador dispute is currently under review by the Permanent Court of Arbitration in The Hague. There is debate over whether it is appropriate for a case that has been fully litigated in a domestic court to then be subject to a BIT arbitration clause. So, for another column . . . how do/should domestic court decisions interact with decisions of international tribunals? This was also one of the questions raised during the ASIL 2012 Annual Meeting’s program, “Confronting Complexity.”
