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  • Publication Date: 12-2017
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: This brief, reviews recent international gas developments, the outlook in this regard and implications for the development of proposed offshore gas projects in Tanzania. As the country aims to benefit from its gas discoveries by increasing its domestic gas use, it also outlines some of the trade-offs and considerations that need to be taken into account when negotiating the domestic gas allocation.
  • Topic: International Political Economy, Climate Finance
  • Political Geography: Tanzania
  • Publication Date: 10-2017
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The message is by now clear: our global economy must be fundamentally reoriented and redeployed in order to achieve the SDGs and the commitments of the Paris Climate Agreement. This requires action by all stakeholders, including non-financial and financial firms, debt and equity investors, government policymakers, and consumers. In terms of the amount of money required, it has been estimated that meeting the SDGs will require $5 to $7 trillion annually, with investment needs for developing countries amounting to roughly $3.3 to $4.5 trillion per year. While a big picture view of and strategic thinking regarding the entire economic ecosystem is necessary to generate such investments, this paper, produced in conjunction with the UN Inquiry into the Design of a Sustainable Financial System, focuses on the actual and potential role of one type of financial flow—FDI—in achieving the transition to a low-carbon, just and sustainable world and, more specifically, FDI flows into developing countries.
  • Topic: International Political Economy, Climate Finance
  • Political Geography: Global Focus
  • Publication Date: 10-2017
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: When a local asset (or a right relating to such asset) is sold, a country will generally have jurisdiction to levy a capital gains tax on the sale, both under domestic law and international treaty. This is called taxation of a “direct” transfer of a local asset. However, taxation becomes increasingly complicated when a company located offshore owns the local asset. Further difficulties arise when the local asset is held by a chain of corporations located in tax havens. An “indirect” transfer occurs when the shares of the domestic subsidiary, the shares of the foreign company with a branch in the country, or the shares of the holding company are sold, instead of the asset.
  • Topic: International Political Economy
  • Political Geography: Global Focus
  • Author: Howard Mann, Karl Sauvant
  • Publication Date: 09-2017
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Based on a review of 150 instruments, ranging from international investment agreements to codes of multinational enterprises, this paper identifies ten core characteristics of sustainable FDI and twenty emerging sustainable FDI characteristics widely accepted across ten stakeholder groups. The paper explores furthermore opportunities and mechanisms to advance the application of the sustainability characteristics. The FDI sustainability characteristics are also of immediate relevance for the discussions of investment facilitation
  • Topic: International Affairs
  • Political Geography: Global Focus
  • Publication Date: 10-2017
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Agricultural investment contracts and forestry projects can be complex, with complicated provisions that are difficult to understand. To assist non-lawyers in better understanding agricultural investment contracts, such as those available on OpenLandContracts.org, CCSI has developed a Guide to Land Contracts: Forestry Projects. This Guide, prepared by International Senior Lawyers Project staff and volunteers in collaboration with the Columbia Center on Sustainable Investment, aims to assist OpenLandContracts.org users in unpacking the technical provisions and language typically found in forestry contracts in order to better understand the contracts and the potential implications of specific provisions across a range of stakeholder interests.
  • Topic: International Affairs, Landpower
  • Political Geography: Global Focus
  • Publication Date: 10-2016
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: This paper explores both the role that local content measures can play in advancing sustainable development, and the impact that trade and investment treaties concluded over the past 20 years have had and will continue to have on the ability of governments to employ those tools. Certain local content measures had been restricted under the WTO due to wide agreement by negotiating parties that their costs outweigh their benefits. But the WTO also left a number of local content measures in governments’ policy toolboxes. As is discussed in this paper, however, that is changing, with the range of permissible actions for many countries being significantly smaller than it was even a decade ago. This narrowed policy space, in turn, can limit the steps governments can take to make progress on the universally adopted Sustainable Development Goals.
  • Topic: International Trade and Finance, International Affairs
  • Political Geography: Global Focus
  • Author: Kaitlin Y. Cordes, Olle Östensson, Perrine Toledano
  • Publication Date: 07-2016
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Employment creation is often seen as a key benefit of investment in natural resources. However, this benefit sometimes falls short: job estimates may be inflated, governmental policies may fail to maximize employment generation, and, in some cases, investments may lead to net livelihood losses. A more thorough examination of employment tied to mining and agricultural investments is thus useful for assessing whether and how employment from natural resource investments contributes to sustainable economic development—a particularly timely topic as countries consider how they will achieve the Sustainable Development Goals adopted in 2015.
  • Topic: Agriculture, International Affairs, Economic growth
  • Political Geography: Global Focus
  • Publication Date: 11-2016
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: CCSI has been working with the World Economic Forum, United Nations Development Programme (UNDP), and the UN Sustainable Development Solutions Network (SDSN) to create a shared understanding of how the mining industry can most effectively contribute to the SDGs. The report will help mining companies navigate where their activities – from exploration, through operations and mine closure – can help the world achieve the SDGs. Governments, civil society and other stakeholders can also identify opportunities for shared action and partnership with the industry.
  • Topic: International Development
  • Political Geography: Global Focus
  • Publication Date: 07-2016
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: CCSI developed A Policy Framework to Approach the Use of Associated Petroleum Gas. Associated Petroleum Gas (APG) is a form of natural gas that is found associated with petroleum fields. APG is often flared or vented for regulatory, economic or technical reasons. The flaring, however, is problematic from health and environmental perspectives. Moreover, flaring and venting APG wastes a valuable non-renewable resource that could be re-injected into the oil field or used for local and regional electricity generation. This framework aims at providing guidance for regulators, policymakers, and industry leaders seeking to develop practical approaches to unlock the economic value of APG.
  • Topic: Industrial Policy
  • Political Geography: Global Focus
  • Author: Louis Brennan
  • Publication Date: 03-2015
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: As the motives driving China’s outward foreign direct investment (OFDI) have expanded from resource - seeking to asset - and market - seeking, Chinese FDI in Europe has grown rapidly. Although Europe, with its advanced technologies and know - how, brands and sophisticated markets, represents an attractive destination for asset - seeking and market - seeking Chinese FDI, it has also posed challenges for Chinese investors. They arise for a number of reasons: the divergent characteristics of the host region, home country liability of origin, as well as China’s OFDI regulation and the capabilities of the investing enterprises.
  • Political Geography: China, Europe
  • Author: Sophie Nappert
  • Publication Date: 02-2015
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In her Perspective, Lise Johnson takes a strong stance in favor of the United Nations Commission on International Trade Law (UNCITRAL) Rules on Transparency in Treaty-based Investor-State Arbitration (“Rules”). The Rules apply in UNCITRAL proceedings, and may be adopted in non-UNCITRAL proceedings, under future investment treaties. Since coming into force in April 2014, the Rules have been welcomed as a ground-breaking, positive development.
  • Topic: United Nations
  • Author: Axel Berger, Lauge N. kovgaard Poulsen
  • Publication Date: 02-2015
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The prospect of including investor-state dispute settlement (ISDS) into the Transatlantic Trade and Investment Partnership (TTIP) has produced a polarizing debate in the Europe an Union (EU). Critics have argued that this adjudication mechanism is unnecessary in TTIP as United States (US) investors can expect fair treatment in EU courts and vice versa.
  • Political Geography: China
  • Author: Ilan Strauss, Ralf Krüger
  • Publication Date: 02-2015
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Over the last decade Africa has attracted an increasing share of global foreign direct investment (FDI) inflows. China and other emerging markets are usually highlighted as important sources of this increase — and they are. However, perhaps the most significant contributor has been Africa itself.
  • Political Geography: Africa, China
  • Author: Steven Globerman
  • Publication Date: 01-2015
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The growth of outward foreign direct investment (OFDI), particularly from China, has generated substantial controversy about whether government - controlled or state - influenced foreign investors should be treated differently than other foreign investors by host country governments. Indeed, several developed country governments impose special review procedures on OFDI undertaken by state - owned enterprises (SOEs). For example, in 2012 the Canadian government announced that takeovers of domestic companies by foreign SOEs would face “strengthened scrutiny,” permitting them only in “exceptional circumstances.”
  • Author: Peter Nunnenkamp, Wan-Hsin Liu, Frank Bickenbach
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: P. Chidambaram, India's Minister of Finance, claimed that "FDI worked wonders in China and can do so in India." However, China's example may also point to the limitations of foreign direct investment (FDI) liberalization in promoting the host country's economic development. FDI in China is heavily concentrated in the coastal areas, and previous studies have suggested that this has contributed to the increasing disparity in regional income and growth since the late 1970s.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: China, South Asia, India
  • Author: Rudolf Adlung
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: A number of recent studies have discussed the implications of most-favored-nation (MFN) clauses in bilateral investment treaties (BIT s) and the possible need for, and role of, a multilateral framework for investment. Surprisingly, the relevance of existing multilateral disciplines, in particular under the General Agreement on Trade in Services (GATS), is seldom acknowledged in this context.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements, Foreign Direct Investment
  • Author: Gary Hufbauer, Sherry Stephenson
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In Columbia FDI Perspectives, No. 102, Axel Berger claimed that the debate over a multilateral framework for investment is futile. We disagree. Following its achievements at the 9th Ministerial Conference in Bali, Indonesia, the World Trade Organization (WTO) should launch negotiations to draft a 21st century Investment Framework Agreement (IFA).
  • Topic: Economics, International Trade and Finance, Markets, Treaties and Agreements, Foreign Direct Investment
  • Political Geography: Colombia
  • Author: Joachim Karl
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In his famous book, "The End of History and the Last Man", published in 1992, Francis Fukuyama argued that Western democracy represents the end point of the socio-cultural evolution of humanity and the final form of government.
  • Topic: Economics, International Trade and Finance, Markets, Treaties and Agreements, Foreign Direct Investment
  • Political Geography: France
  • Author: Anthea Roberts
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: There have been many calls for a rebalancing of investor protection and state sovereignty in the investment treaty system. However, another equally important shift is underway: the recalibration of interpretive authority between treaty parties and arbitral tribunals. In newer-style investment treaties, states are increasingly protecting and enhancing their role in interpreting and applying their treaties.
  • Topic: Economics, Government, International Trade and Finance, Markets, Treaties and Agreements, Foreign Direct Investment
  • Author: Sheng Zhang
  • Publication Date: 01-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The China-US bilateral investment treaty (BIT) negotiations have attracted attention due to the relative size and weight of both economies. Despite broad consensus about the importance of such a treaty, there is considerable debate about its shape and content. The debate is reflected in two recent Columbia FDI Perspectives. Donnelly argued that a China-US BIT should be modeled on the US Model BIT without "splitting the difference between Chinese and US positions", and that the possibility of meaningful BIT negotiations are "really up to China at this point".
  • Topic: Economics, Globalization, International Trade and Finance, Bilateral Relations, Foreign Direct Investment, Governance
  • Political Geography: United States, China, Europe, Colombia
  • Author: Rainer Geiger
  • Publication Date: 04-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Launched in July 2013 by the European Union and the United States, the Transatlantic Trade and Investment Partnership (TTIP) represents an important effort to reach a comprehensive economic agreement between two major trading partners. As has been pointed out, the project offers great opportunities for liberalizing trade and investment and regulatory convergence. Its level of ambition implies high risks, but despite negotiators' initial optimism, its success is far from certain. This Perspective focuses on the project's investment chapter, drawing lessons from the failed negotiations on a Multilateral Agreement on Investment (MAI), which was meant to consolidate the results of liberalization in the OECD area, establish new disciplines and introduce protection and dispute settlement.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements
  • Political Geography: Europe, North America
  • Author: Nathan M. Jensen, Jeremy Caddel
  • Publication Date: 03-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Foreign direct investors increasingly use investment dispute-settlement mechanisms to resolve investment disputes and reduce political risk. Using data from the International Centre for Settlement of Investment Disputes (ICSID), the major forum of international investment arbitration, we cataloged the government actors involved in disputes and the actions that led to arbitration. Existing case-based studies of investment arbitration have provided general inferences about the actors involved, but we contribute to the literature in political science and economics by systematically documenting these patterns of behavior.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment, Governance
  • Author: Karl P. Sauvant, Victor Z. Chen
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: China's rising outward foreign direct investment (OFDI) faces rising skepticism abroad. This is partly the result of the leading role of state-owned enterprises in her OFDI (and the fear that it serves non-commercial purposes), the speed with which this investment has grown, the negative image of the home country in some quarters, and the challenges it poses to established competitors. Moreover, Chinese multinational enterprises (MNEs) may not always keep in mind that host countries see FDI as a tool to advance their own development and hence seek maximum benefits from it.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: China, Asia
  • Author: Miguel Pérez Ludeña
  • Publication Date: 05-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Multinational enterprises (MNEs) multiplied their profits made in developing countries by four between 2002 and 2011 (at current prices). In Latin America and the Caribbean, they rose from US$20 billion in 2002 to US$113 billion in 2011. The growth rate has been even higher in Africa and China, but much lower in developed countries. This rise is explained by an increase in FDI stock in developing economies and the higher average profitability of MNEs.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Africa, China, Latin America
  • Author: Louis T. Wells
  • Publication Date: 02-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: A recent Perspective concluded that, in countries given to sudden shifts in policy, "a host country government equity stake in a project may decrease project risk by giving the state a reason not to demand a renegotiation." An investor may benefit, but does the host country? In my experience, rarely.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment
  • Author: Rainer Geiger
  • Publication Date: 04-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Launched in July 2013 by the European Union and the United States, the Transatlantic Trade and Investment Partnership (TTIP) represents an important effort to reach a comprehensive economic agreement between two major trading partners. As has been pointed out, the project offers great opportunities for liberalizing trade and investment and regulatory convergence. Its level of ambition implies high risks, but despite negotiators' initial optimism, its success is far from certain.
  • Topic: Economics, International Trade and Finance, Treaties and Agreements, Foreign Direct Investment
  • Political Geography: United States, Europe
  • Author: John Gaffney, James Nicholson
  • Publication Date: 06-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In their contribution to the FDI Perspectives series, Baiju Vasani and Anastasiya Ugale drew attention to an emerging trend in favor of the so-called "costs follow the event" (CFtE) (or loser pays) approach, which is in contrast to the more "traditional" approach under which parties share the costs of arbitration equally, with each party covering its own legal fees.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Publication Date: 11-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Investments in the extractive industries and large-scale land-based investments in forestry and agriculture present similar opportunities for host governments to accelerate sustainable development, as well as comparable challenges to ensure that such investments do not serve as a source of corruption, rights abuses, or environmental degradation. In response to the challenges associated with ensuring successful and inclusive results from such large-scale investments, an increasing number of initiatives have sought to increase good governance over these types of investments. Yet, despite some perceived commonalities between the sectors, the good governance initiatives in respect of extractive industry investments and land-based (forestry or agriculture) investments are often distinct and sector-specific, with few attempts being made to examine how lessons learned from one sector could be applied to the other.
  • Author: Dylan G. Rassier
  • Publication Date: 12-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Economic accountants, who are responsible for measuring gross domestic product (GDP), and tax authorities, which are responsible for collecting tax revenues, face similar challenges with respect to multinational enterprises (MNEs): economic accountants want to know where within an MNE production is taking place and, thus, where to attribute GDP; tax authorities want to know where income from production is earned. Current global guidance on economic accounting and international taxation generally require transactions within MNEs to be recognized at market (or “arm's length”) values as if the transactions are taking place among unrelated entities. However, the values of transactions within MNEs may not reflect economic reality because related entities may exchange unique products with no active markets, and because MNEs may be structured with one or more entities that exist for purposes other than production. As a result, transactions within MNEs may distort economic accounting statistics and tax revenues.
  • Author: Gus Van Harten
  • Publication Date: 12-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The Canada - China bilateral investment treaty (BIT) – ratified by Canada on September 12, 2014, after a two - year delay following its signature in 2012 – provides a useful reference for future investment negotiations involving Canada or China and other countries.
  • Political Geography: China, Canada
  • Author: Stephen M. Schwebel
  • Publication Date: 11-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The creation of the International Centre for Settlement of Investment Disputes (ICSID) is the boldest step in the modern history of international cooperation on the protection of foreign investment. I t has furthered the flourishing of arbitration between investors and states, itself one of the most progressive developments in international law of the past sixty years. Since Germany concluded the first bilateral investment treaty (BIT) with Pakistan in 1959, some 3,000 BITs have been concluded. Yet, there are reports that the European Union (EU), led by Germany, may exclude investor - state arbitration from the Transatlantic Trade and Investment Partnership (TTIP) with the United States (US), impairing the ubiquity of investor - state arbitration.
  • Political Geography: Pakistan, United States, Germany
  • Author: Roel Nieuwenkamp Kimmo Sinivuori
  • Publication Date: 11-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: As the OECD Guidelines for Multinational Enterprises, first adopted in 1976 and updated for the fifth time in 2011, are approaching middle age, it is appropriate to reflect on how the use of the se far - reaching recommendations for responsible business conduct can be promoted in international investment agreements (IIAs). During the Guideline's almost four decades of existence, the landscape of the global economy has continuously evolved, and securing sustainable development has become a key international issue.
  • Author: Peter Nunnenkamp, Julian Donaubauer, Birgit Meyer
  • Publication Date: 10-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: It is widely believed that a country's infrastructure is a critical factor in sustaining economic growth, promoting trade and attracting foreign direct investment (FDI). However, better data are required to assess the links between infrastructure, FDI and economic development. The available measures are either restricted to specific aspects of economic infrastructure, or they cover only a limited number of countries over a short period of time.
  • Author: Ralph Alexander Lorz
  • Publication Date: 10-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The Transatlantic Trade and Investment Partnership (TTIP) currently being negotiated between the European Union (EU) and the United States (US) could become the most comprehensive international agreement on free trade and investment protection. The negotiations have mostly been met with the usual criticism that accompanies attempts to expand free trade, despite overwhelming evidence that free trade fosters global economic development.
  • Political Geography: United States, Germany
  • Author: Kenneth P. Thomas
  • Publication Date: 09-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: As I discussed in an earlier Perspective, the use of investment incentives is pervasive and growing. The most recent example of a big bidding war was when Boeing threatened to move production of its 77 7 - X aircraft out of Washington state, prompting some 20 states to offer incentive packages to the company (including $1.7 billion from Missouri). In the end, Washington gave Boeing a package of tax incentives worth a record - breaking $8.7 billion over the 2 025 – 2040 period to stay, and the unions made substantial concessions regarding pensions.
  • Political Geography: Washington
  • Author: Catherine Kessedjian
  • Publication Date: 09-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: An OECD study shows that arbitration costs in investment disputes average US$ 8 million; in one case involving mass claims, the parties spent almost US$ 40 million in legal fees just to reach the decision on jurisdiction. Under these circumstances, it is no wonder that third party funding has become the talk of the town.
  • Publication Date: 09-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: <p>The Canada-China BIT could provide insight on the key issues to be discussed in a possible US-China BIT. A particularly controversial issue will be the terms of investor-state arbitration (ISA). But as ISA becomes increasingly controversial between developed democratic states, it may become harder to negotiate ISA with China.</p>
  • Author: Alisha Anderson, Alexandra Guisinger
  • Publication Date: 08-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The International Centre for Settlement of Investment Disputes (ICSID) has emerged as a powerful actor within the field of inter-state investment arbitration. However, as with other international institutions, its existence depends on continued acceptance by domestic actors.
  • Author: Lise Johnson
  • Publication Date: 07-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In July 2013, after nearly three years of work, the United Nations Commission on International Trade Law (UNCITRAL) adopted a set of arbitration rules that will help open some investor-state arbitrations to public view. The UNCITRAL Rules on Transparency in Treaty - based Investor - State Arbitration (Transparency Rules) were crafted with input from governments, academics, arbitration practitioners, and non-governmental organizations, and approved by consensus by the member states. When applied, the Transparency Rules will require disclosure of information submitted to, and issued by, arbitral tribunals throughout proceedings, mandate open hearings and expressly allow for participation by non-parties to a dispute. The Transparency Rules also guard against disclosure of confidential information and establish a repository in which all information will be published.
  • Author: Anna De Luca
  • Publication Date: 07-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Many governments offer incentives to attract foreign direct investment (FDI). For example, the renewable energy sector has benefitted from large national incentive schemes in the past decade. However, the withdrawal of such incentives can lead to investors bringing investment treaty claims against host countries. This Perspective looks at some claims host countries face from investors in the renewable energy sector and their implications.
  • Author: Rafael Tamayo-Álvarez, Maria Alejandra Gonzalez-Perez, Juan David Rodriguez-Rios
  • Publication Date: 06-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Free trade agreements (FTAs) and international investment agreements (IIAs) are regarded as instruments to promote world trade, investment flows and market liberalization. The question, however, is whether they promote sustainable development as well. This Perspective contemplates incorporating voluntary codes of conduct for multinational enterprises (MNEs) in IIA s to strengthen the protection of labor rights, “the social component [...] embedded in the notion of sustainable development.”
  • Author: John Gaffney, James Nicholson
  • Publication Date: 06-2014
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In their contribution to the FDI Perspectives series, Baiju Vasani and Anastasiya Ugale drew attention to an emerging trend in favor of the so-called “costs follow the event” (CFtE) (or loser pays) approach, which is in contrast to the more “traditional” approach under which parties share the costs of arbitration equally, with each party covering its own legal fees.
  • Author: Catharine Titi
  • Publication Date: 01-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In July 2012, in an internal document, the European Commission's Directorate-General for Trade suggested that future EU investment agreement s (EUIAs) should incorporate regulatory flexibility in the same way in which EU free trade agreements (FTAs) safeguard parties' policy space. Since it is expected that a number of treaties on the EU's negotiating agenda will be concluded in the near future, and given the policy shift that has already taken place in Canada and the US, it is time to start thinking about a new balance in a move away from investment treaties' traditional laissez-faire liberalism toward WTO law's embedded liberalism, a model whereby liberalization is embedded within a wider framework that enables public regulation in the interest of domestic stability.
  • Topic: Economics, Globalization, International Trade and Finance, World Trade Organization, Foreign Direct Investment
  • Political Geography: Europe, Canada
  • Author: Nicolle Graugnard
  • Publication Date: 09-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Business needs a stable and predictable investment environment, especially in times of economic uncertainty, to continue to generate employment and create wealth. Although foreign direct investment (FDI) flows rose for two years after plummeting in the wake of the global financial crisis, they fell again by 18% to US$ 1.4 trillion in 2012. According to UNCTAD, the major factors contributing to this sharp decline were economic fragility and policy uncertainty in several economies. Moreover, investment regulations classified as “restrictive” rose to 25% in 2012, compared to just 6% in 2000; “liberalizing” regulations were 75 % of the total in 2012, compared to 94% in 2000. The result of these regulations is, therefore, not surprising: businesses are holding back on new investments, with multinational enterprises reporting record cash-holdings of between US$ 4 to 5 trillion.
  • Topic: Development, Economics, International Cooperation, International Trade and Finance, Foreign Direct Investment, Governance
  • Author: Axel Berger
  • Publication Date: 08-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: One of the recurrent debates on international investment rule-making relates to the question whether it is possible to establish a multilateral framework for investment (MFI). Proponents argue that growing foreign direct investment (FDI) from emerging countries, especially China, contributes to a new consensus on global investment rules.
  • Topic: Economics, Globalization, International Trade and Finance, Regional Cooperation, Foreign Direct Investment
  • Political Geography: China
  • Author: Karl P. Sauvant, Federico Ortino.
  • Publication Date: 08-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Discussions on a multilateral investment framework have recently seen a revival, as the International Chamber of Commerce, the World Economic Forum and various authors have called for negotiations on this subject. A growing number of countries have been reviewing and adapting their international investment policies. This reflects dissatisfaction with the current international investment law regime, and a desire to improve it.
  • Topic: Economics, International Law, International Trade and Finance, Foreign Direct Investment
  • Author: Baiju S. Vasani, Anastasiya Ugale
  • Publication Date: 07-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In 2006, the Thunderbird tribunal, operating under the UNCITRAL Arbitration Rules, called for the harmonization of cost-allocation approaches in commercial and investment arbitration. Subsequent tribunals appear to be heeding Thunderbird's call paving a trend in favor of the so-called “costs follow the event” (CFtE) approach and its variations. Generally, this approach prescribes the shifting of arbitral costs and reasonable legal fees to the unsuccessful party (or based on parties' relative success) and has historically been prevalent in commercial arbitration. By contrast, the more traditional approach in investment arbitration has been to share the costs of arbitration equally, save for special circumstances, with each party covering its own legal fees (traditional approach). In the wake of what appears to be an emerging trend in favor of a default CFtE custom, it is time to revisit the idea of whet her a single harmonized approach to cost allocation is really appropriate. We suggest that it most likely is not.
  • Topic: Development, Economics, Emerging Markets, International Trade and Finance, Foreign Direct Investment
  • Author: Nicolle Graugnard
  • Publication Date: 09-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Business needs a stable and predictable investment environment, especially in times of economic uncertainty, to continue to generate employment and create wealth. Although foreign direct investment (FDI) flows rose for two years after plummeting in the wake of the global financial crisis, they fell again by 18% to US$ 1.4 trillion in 2012. According to UNCTAD, the major factors contributing to this sharp decline were economic fragility and policy uncertainty in several economies. Moreover, investment regulations classified as “restrictive” rose to 25% in 2012, compared to just 6% in 2000; “liberalizing” regulations were 75% of the total in 2012, compared to 94% in 2000. The result of these regulations is, therefore, not surprising: businesses are holding back on new investments, with multinational enterprises reporting record cash-holdings of between US$ 4 to 5 trillion.
  • Topic: Development, Economics, Industrial Policy, International Trade and Finance, Natural Resources
  • Author: Marino Baldi
  • Publication Date: 09-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Traditional bilateral investment treaties (BITs) focus on investment protection, i.e., regulate post-establishment aspects of foreign investment. In recent times, investment agreements have increasingly been supplemented with liberalization rules and also clauses on, e.g., key personnel, labor rights and sustainable development. Such integrated investment accords have notably become part of preferential trade agreements (PTAs). This trend started with NAFTA, continued with the negotiations on a Multilateral Agreement on Investment (MAI), and has in the course of the past ten years increasingly characterized PTAs throughout the world. The rapid proliferation of PTAs has, in the investment field, unfortunately led to lower quality provisions. Many of these treaties contain such wide-ranging exceptions and vaguely formulated safeguard clauses that their regulatory value as regards the protection of foreign investments in their post-establishment phase is called into question.
  • Topic: Development, Economics, International Trade and Finance, Foreign Direct Investment
  • Author: Barclay E. James, Paul M. Vaaler.
  • Publication Date: 12-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Business researchers, executives and regulators may assume that state ownership in firms raises risk for private co-investors. After all, private investors are seeking profits while states are seeking welfare. Giving them both equity only confuses the aims of an investment project, complicates the job of investment project managers and raises the overall risk of investment project failure. But these assumptions do not fit the evidence as demonstrated by a well-known risk indicator observable in hundreds of investment projects located in dozens o f countries: in countries where initial investment terms are more vulnerable to renegotiation by host country governments, we found that "minority rules" apply w hereby a non-controlling, but still substantial equity investment by a host country government can play a risk-mitigating role.
  • Topic: Markets, Treaties and Agreements, Foreign Direct Investment, Governance, Reform
  • Political Geography: Ethiopia
  • Author: Gus Van Harten
  • Publication Date: 12-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Investment treaty arbitration has unfolded rapidly in recent years. Some observations arising from analyses of arbitrator awards are high lighted below. They support broad conclusions that: arbitrators reviewed a wide range of legislative, executive and judicial decisions but typically did not exercise judicial restraint in various ways associated with domestic and international courts; arbitrators typically adopted expansive approaches to their authority and to investor entitlements to compensation, especially where the claimant had the nationality of a major Western capital-exporting state; and decision-making power was highly concentrated amongarbitrators, suggesting a need for closer scrutiny of how the most active individual arbitrators have expanded the meaning of investment treaties and corresponding principles of state liability.
  • Topic: Economics, International Trade and Finance, Markets, Treaties and Agreements, Foreign Direct Investment, Law Enforcement, Law
  • Author: Xavier Carim
  • Publication Date: 11-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Proponents tend to argue that bilateral investment treaties (BITs) encourage investment and strengthen the rule of law particularly in jurisdictions where court systems are weak or biased against foreigners. This premise is contested. First, studies on BITs and FDI suggest the relationship is, at best, ambiguous and that BITs are neither necessary nor sufficient to attract FDI. Indeed, South Africa receives FDI from investors in countries with whom it has no BIT and often little or no FDI from others where a BIT was in place.
  • Topic: Security, Economics, Emerging Markets, International Trade and Finance, Treaties and Agreements
  • Political Geography: Africa, South Africa
  • Author: Janani Sarvanantham, John Gaffney
  • Publication Date: 11-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: A number of influential international organizations recently have issued publications that discuss the promotion of sustainable development in international investment. These organizations include the United Nations; UNCTAD; FAO, IFAD, the UNCTAD Secretariat, and the World Bank Group; the Commonwealth Secretariat; the Organisation for Economic Co-operation and Development (OECD); the International Chamber of Commerce (ICC); and the South African Development Community (SADC).
  • Topic: Development, Economics, Emerging Markets, International Organization, Foreign Aid, Governance
  • Political Geography: United Nations
  • Author: Nikia Clarke
  • Publication Date: 11-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Energy investments and infrastructure contracts remain prominent in China's Africa engagement. However, investment in manufacturing makes up a significant proportion of Chinese outward foreign direct investment (FDI). Its characteristics–large numbers of smaller transactions by privately owned small and medium-sized firms–make these flows difficult to assess or control. However, China and African governments have an interest in effectively channeling this type of FDI.
  • Topic: Development, Economics, Industrial Policy, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Africa, China
  • Author: Karl P. Sauvant
  • Publication Date: 10-2013
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Since China adopted its "going out" policy in 2001, her outward foreign direct investment (OFDI) flows have grown rapidly, reaching US$84 billion in 2012 (although the stock remains small). That year, China was the world's third largest outward investor (after the US and Japan). This performance raises all sorts of issues, especially because state-owned enterprises (SOEs) control some three-quarters of the country's OFDI stock. Three challenges are addressed in this Perspective.
  • Topic: Development, Economics, Emerging Markets, Foreign Direct Investment
  • Political Geography: United States, Japan, China
  • Author: Seev Hirsch
  • Publication Date: 01-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The purpose of this Perspective is to explore the relationship between multinational enterprises (MNEs) and their home countries. I use the term “nationality” when discussing a home country, to stress the contrast with “multinationality” which refers to business enterprises. The question I seek to address is whether, ceteris paribus, nation states have an economic interest in becoming home countries to MNEs. This is not a trivial question, bearing in mind that in many countries -- especially those with emerging markets -- outward foreign direct investment (FDI) has been frowned upon long after incoming FDI was generally welcome by local governments and academic scholars.
  • Topic: Development, Economics, Emerging Markets, International Trade and Finance, Political Economy, Foreign Direct Investment
  • Author: Tadahiro Asami
  • Publication Date: 01-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The Business and Industry Advisory Committee to the OECD (BIAC) has accepted the updated OECD Guidelines for Multinational Enterprises (Guidelines), adopted on May 25, 2011 after a series of negotiations and consultations among members of the Organisation for Economic Cooperation and Development (OECD), adhering governments, BIAC, the Trade Union Advisory Committee to the OECD, and OECD Watch, an international network of civil society organizations. The Guidelines are the most comprehensive government-endorsed code of responsible business conduct. The Update upheld the voluntary and non-legally binding character of the Guidelines, and while the new text introduces important new elements, the Update is very carefully formulated and its changes are accompanied by extensive conditionalities.
  • Topic: Development, Economics, International Cooperation, International Trade and Finance, Markets, Foreign Direct Investment
  • Author: Mira Wilkins
  • Publication Date: 01-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In a recent Perspective, Beugelsdijk, Hennart, Slangen, and Smeets warned readers about biases in the measure of FDI stock. They are to be congratulated for pushing readers to be careful in the use of data.
  • Topic: Development, Economics, Emerging Markets, International Trade and Finance, Foreign Direct Investment
  • Author: Miguel Pérez Ludeña
  • Publication Date: 03-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Chinese foreign direct investment (FDI) in Latin America is a recent phenomenon. Although the China National Petroleum Corporation and other companies have been present in Peru, Ecuador and Venezuela since the early 1990s, large projects have been pursued only since 2006, following an extended period of high commodity prices. The Economic Commission for Latin America and the Caribbean (ECLAC) estimated that there were US$ 15 billion of Chinese FDI inflows into Latin America in 2010, 90% of which were in extractive industries. This further contributed to the already high percentage of Chinese FDI flows to the region that are in natural resources. At a time of high economic growth fueled by commodity exports and strong currency appreciation (particularly in Brazil), FDI into extractive industries strengthens the region's specialization in primary products at the expense of manufacturing and other activities.
  • Topic: Economics, International Trade and Finance, Markets, Natural Resources, Foreign Direct Investment
  • Political Geography: China, Brazil, Latin America, Peru
  • Author: Karl P. Sauvant, Chen Zhao, Xiaoying Huo
  • Publication Date: 03-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Among developing countries, China attracts most foreign direct investment (FDI). Where is this investment located within China, what explains its distribution and what are policy implications? We used UNCTAD's FDI Performance Index to answer the first question. Although developed for countries , it can be applied to sub-national units. It uses provincial GDP to ascertain whether a given territorial unit has received FDI inflows as expected from its economic size. Standardizing the data accordingly reveals three clusters of provinces for 2007-2010 (table 1, figure 1 below): The first cluster encompasses virtually all coastal provinces: they have an index value above 1, i.e. perform better than their economic size would lead one to expect. They account for 9 of the top 11 performers of Mainland China's 31 provinces, municipalities and autonomous regions (“provinces”). The provinces in the middle cluster underperform (index value of 1-0.5). They include 5 central provinces, but also 3 western and 2 coastal provinces. The provinces in the bottom cluster underperform significantly (index value below 0.5), comprising primarily the country's western provinces (8 out of the 10 provinces in this cluster).
  • Topic: Development, Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: China
  • Author: Clint Peinhardt, Todd Allee
  • Publication Date: 02-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The proliferation of investment treaties is perhaps exceeded only by academic studies of those treaties. Legal scholarship has long been attentive to the evolution in international investment agreement (IIA) content -- but until recently, quantitative assessments of IIAs have tended to treat them as interchangeable: the only measure of investor protections encoded in IIAs is whether a treaty had been signed and/or entered into force. Thankfully, the United Nations Conference on Trade and Development has been at the forefront of capturing not just IIAs' proliferation but also the evolution in their content. Its work shows that treaties apply for differing durations, have conflicting procedures for termination and include varying definitions of even basic terms, such as “investors” and “investment.” Other quantitative studies have begun to measure these variations, focusing initially on differences in dispute resolution. 1 Some IIAs demand that investors choose between domestic and international dispute resolution; some provide explicit consent of both parties to international arbitration; and some designate a particular forum for arbitration, whereas others specify multiple options. Of course, IIAs vary across many dimensions, but our initial examination of dispute resolution provisions alone demonstrates the importance of examining IIA content.
  • Topic: Economics, International Trade and Finance, Markets, Treaties and Agreements, Foreign Direct Investment
  • Political Geography: United Nations
  • Author: Alice H. Amsden
  • Publication Date: 02-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: A priori, is there a growth/efficiency justification for government programs designed to support and promote national companies (public and private) as opposed to, and in competition with, opening the doors to multinational enterprises (MNEs)? In competitive markets, there should be no difference. Where national companies close in capabilities to foreign affiliates do not exist, foreign direct investment (FDI) may stimulate development, if a country is lucky enough to attract it. But in the imperfect markets that characterize the BRICs and other emerging markets, where foreign affiliates may crowd out excellent but inexperienced national firms, the question arises as to which type of enterprise policy makers should encourage for the long run. Historically, policy makers used tariffs to promote national firms (a “race to the bottom”). Today they use investments in science and technology (a “race to the top”).
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Author: Gus Van Harten
  • Publication Date: 02-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Investment arbitration has a remarkably poor record on representation of women. This calls for reform of the appointments process for arbitrators, who make important policy choices in the context of global governance.
  • Topic: Economics, Gender Issues, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Europe
  • Author: Stephan W. Schill
  • Publication Date: 01-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: At the heart of the so-called “legitimacy crisis” of international investment law, prominently reflected in the Public Statement on the International Investment Regime, is what I call the public law challenge. It builds on the observation that one-off appointed arbitrators, instead of standing courts, review government acts and reach far into the sphere of domestic public law by crafting and refining the standards governing in vestor-state relations. Arbitrations against Uruguay and Australia concerning cigarette packaging are the most recent examples of genuinely public law disputes now settled in arbitration. The disputes about Argentina's emergency legislation and Canada's ban on pesticide s are others. These arbitrations create friction with domestic public law as arbitrators, having little democratic legitimacy, often operate in non-transparent proceedings and produce increasing amounts of incoherent decisions.
  • Topic: Economics, International Law, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Canada, Argentina, Australia
  • Author: Nathan M. Jensen, Persephone Economou, Paul Antony Barbour, Daniel Villar
  • Publication Date: 05-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The events of the Arab Spring have dramatically increased the risk perceptions of foreign investors. In directly affected countries, these events led to disruptions in economic activity including plummeting tourism and foreign direct investment (FDI) flows, all of which negatively impacted economic growth. While the economic impact was uneven across the Middle East and North Africa (MENA) region, for the region's developing countries the growth rate assumption underpinning survey analysis in the Multilateral Investment Guarantee Agency's (MIGA's) World Investment and Political Risk Report for 2011 was 1.7%. How much will these developments affect future FDI?
  • Topic: Political Violence, Regime Change, Foreign Aid, Fragile/Failed State, Foreign Direct Investment
  • Political Geography: Middle East, Arabia, North Africa
  • Author: Mark Feldman
  • Publication Date: 04-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The ICSID Convention, under Article 25(1), applies only to those investment disputes that are between a contracting state and a “national” of another contracting state. Given that limitation, and in light of the significant and growing amount of foreign investment by state-controlled entities (SCEs), ICSID tribunals likely will need to address one fundamental issue with greater frequency: whether disputes arising from SCE investments constitute investor-state disputes falling within, or state-to-state disputes falling outside of, the scope of the ICSID Convention.
  • Topic: Development, Economics, Markets, Foreign Direct Investment, Governance
  • Author: Karl P. Sauvant, Jonathan Strauss
  • Publication Date: 04-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Developing country sovereign wealth funds (SWFs) as players in the world foreign direct investment (FDI) market have received considerable attention. While outward FDI from emerging markets has indeed risen dramatically, that by SWFs has been negligible: their outward FDI stock is around US$ 100 billion (compared to a world FDI stock of US$ 20 trillion in 2010).
  • Topic: Development, Economics, Emerging Markets, Government, International Law, Foreign Direct Investment
  • Political Geography: United States
  • Author: Terutomo Ozawa
  • Publication Date: 05-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: This is a reply to Francisco Sercovich's commentary on my Perspective on FDI-led industrial takeoff in which I described foreign direct investment (FDI) as an ignition for catch-up industrialization. He emphasized "the rich and nuanced variety of strategic options" (e.g., S policies, engineering education, chaebol-type enterprises for technology absorption, R capabilities), which are, however, relevant only to higher-stages of catch-up, but notto the kick-off stage with which my previous Perspective was concerned. Economic development derives from structural changes at different stages of growth, requiring stages-focused strategies.
  • Topic: Development, Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Author: Sophie Meunier
  • Publication Date: 05-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: China is investing throughout the world, in industries from automobiles to zinc. In the US, Chinese foreign direct investment (FDI) accounted for only 0.25% of total FDI stock in 2010,but it is likely to increase as China diversifies its holdings and seeks to obtain technology, managerial know-how and easier access to US consumers. As these investments multiply, we expect a few cases to attract negative attention in the media and political arena. Chinese companies are predominately state-controlled, raising the specter that they act to fulfill strategic, rather than profit maximizing, goals. China is also an ideological rival, causing irrational concern that Chinese investment in the US may act as a Trojan Horse of Chinese values and politics --fueled by rational concerns about subsidies, piracy, and economic espionage.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Political Geography: United States, China
  • Author: Ilan Alon, Aleh Cherp
  • Publication Date: 10-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The motivations prompting China's dramatic increase in outward foreign direct investment (OFDI) are not always clear, especially regarding OFDI by state-owned enterprises (SOEs) in energy and natural resources. First, both commercial and governmental interests are intertwined, although not necessarily in lock-step. Chinese SOEs listed in the West may worry about the reputational risks to their global corporate citizenship, while government stakeholders may instead focus on diplomatic international relations. Second, subsidies for oil investments may be viewed as serving Chinese national interests and threatening the national security of the host countries. Whether China's OFDI will benefit or harm global energy security, economic development and diplomatic relations is still hotly contested.
  • Topic: Economics, Emerging Markets, Energy Policy, International Trade and Finance, Oil, Foreign Direct Investment
  • Political Geography: China
  • Author: Jo En Low
  • Publication Date: 10-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: A review of the definition of “investor” and investor-state dispute resolution clauses in 851 international investment agreements (IIAs) reveals that, except in two, state controlled entities (SCEs) (sovereign wealth funds and state-owned enterprises (SOEs)) have equivalent standing to their purely private counterparts as investors under such IIAs.
  • Topic: Economics, Emerging Markets, International Trade and Finance, Markets, Foreign Direct Investment
  • Author: Lise Johnson
  • Publication Date: 09-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: As UNCTAD highlighted over a decade ago and again recently in its Investment Policy Framework for Sustainable Development, home-country measures (HCMs), like host-country commitments regarding the protection of foreign investors, are tools of promoting foreign investment. Nevertheless, the vast bulk of investment treaties, which state the promotion of foreign investment as their objective, overlook the potential role of HCMs and focus rather singularly on setting out the obligations of host countries regarding the treatment of foreign investors. Even recent agreements and model investment treaties that should represent “next generation” practices incorporating accumulated learning about the impacts and effectiveness of these treaties remain relatively devoid of any obligation for governments to facilitate or promote the quantity and quality of outward investment that many countries want and need for sustainable development.
  • Topic: Development, Economics, Emerging Markets, International Trade and Finance, Markets, Foreign Aid, Foreign Direct Investment
  • Author: Elizabeth L. Broomfield
  • Publication Date: 09-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: There is currently no universal framework governing capital controls. As a result, a conflict has arisen due to the different approaches taken by various international organizations and many international investment agreements (IIAs). In particular, the International Monetary Fund (IMF) -- established to manage the international financial system -- preserves national autonomy over capital controls when such measures are deemed necessary; in contrast, IIAs, and especially bilateral investment treaties (BITs) -- crafted primarily to protect investors -- typically do not allow for the imposition of restrictions on capital outflows associated with foreign investments for balance-of-payments reasons.
  • Topic: Development, Economics, International Monetary Fund, Foreign Aid, Foreign Direct Investment, Financial Crisis
  • Author: Sandy Walker
  • Publication Date: 08-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In its World Investment Report 2011, UNCTAD reported that liberalizing investment policy measures taken globally in 2010 outnumbered restrictive measures. Without the benefit of statistics, investors might have drawn the opposite conclusion, witnessing what appears to be a rising tide of national resistance to foreign takeovers: the Australian Foreign Investment Review Board's rejection of a takeover of the Australian Securities Exchange by the Singapore Exchange, Italian concern over a French company's takeover of dairy giant Parmalat and the US Government's requirement that Chinese company Huawei divest certain assets it had acquired from 3Leaf.
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: United States, China, Canada, Australia, Singapore
  • Author: Julien Topal, Perrine Toledano
  • Publication Date: 08-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Transparency demands in extractive industries are tied to the complex paradoxical correlation between significant resource endowment and poverty in many resource dependent countries. Citizens of these countries and international investors alike only have limited means to scrutinize money-flows between governments and companies, disrupting accountability mechanisms.
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Author: Peter Nunnenkamp, Martin Roy, Axel Berger, Matthias Busse
  • Publication Date: 07-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: It may appear all too obvious that the extent to which foreign direct investment (FDI) is attracted by bilateral investment treaties (BITs) and regional trade agreements (RTAs) depends on the strength of key investment provisions. Still, BITs and RTAs have typically been treated as black boxes in prior empirical literature, ignoring two important legal innovations: investor-state dispute settlement (ISDS) and pre-establishment national treatment (NT) provisions.
  • Topic: Economics, International Trade and Finance, Foreign Direct Investment
  • Author: M Sornarajah
  • Publication Date: 07-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The legitimacy of investment arbitration becomes increasingly questioned, with liberal states like Australia moving away from the regime. Defenders seek to ensure the survival of this regime of asymmetric investment protection, using a variety of techniques. The conservation of the gains of property protection has resulted in novel arguments relating to the existence of a global administrative law and standards of global governance. These arguments seek to preserve an approach associated with the failure of market fundamentalism and global economic crises. As long as the inequity contained in regulatory restraints of the system affected only the powerless states, it operated with vigor; but with powerful states feeling the effects of regulatory restraints of investment treaties, there has been movement away from the earlier premises of the established regime.
  • Topic: Development, Economics, Emerging Markets, International Trade and Finance
  • Political Geography: China, India, Australia
  • Author: Lorenzo Cotula
  • Publication Date: 06-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Foreign investment in developing countries' natural resources brings into contact competing interests characterized by an unequal balance of negotiating power -- from multinational enterprises and host governments to people affected by the implementation of investment projects. Economic globalization has been accompanied by extensive developments in national and international norms regulating investment and its impact -- including investment law, natural resource law and human rights law. These norms affect the way the costs, risks and benefits of investments are shared among the multiple parties involved.
  • Topic: Development, Economics, Emerging Markets, International Law, Foreign Direct Investment, Law
  • Author: Torfinn Harding, Beata Javorcik
  • Publication Date: 06-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Foreign direct investment flows to developing countries are hindered by many factors. Two of these factors -- the mere lack of information and red tape -- could be easily remedied through investment promotion efforts.
  • Topic: Development, Economics, Emerging Markets, International Trade and Finance, Markets, Foreign Direct Investment
  • Author: Thomas Jost
  • Publication Date: 06-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The rise of sovereign wealth funds (SWFs) and state-owned enterprises (SOEs) -- together state-controlled entities (SCEs) -- has led to concerns that SCEs could threaten national security by following political rather than mere commercial goals with respect to their foreign direct investment (FDI). While developed countries acknowledged that the rise of SCEs should not lead to new barriers to FDI, several have changed their legislation to expand government oversight of FDI flows. In 2009, Germany also tightened its foreign investment regime. What are the first experiences with this change in German investment law?
  • Topic: Economics, Markets, Foreign Direct Investment, Law
  • Political Geography: Europe, Germany
  • Author: Karl P. Sauvant, Huiping Chen
  • Publication Date: 12-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: China is the largest foreign direct investment (FDI) host and home country among emerging markets, the United States among developed countries. As host countries, both seek to maintain policy space to pursue their own legitimate public policy objectives; as home countries, both seek to protect their investors' outward FDI. The development of their bilateral investment treaties (BITs) over the past decade reflects this: Chinese BITs have become more protective of investors, US ones more respectful of host country interests. If agreement is reached between both, it would provide a template for future investment agreements.
  • Topic: Economics, Emerging Markets, Treaties and Agreements, Foreign Direct Investment
  • Political Geography: United States, China
  • Author: Saurav Pathak, André Laplume, Emanuel Xavier-Oliveira
  • Publication Date: 12-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Whether or not foreign direct investment (FDI) is essential for domestic technological and economic development remains a contentious question. The controversy is illustrated by comparing the Celtic and Asian Tigers experiences from 1995 to 2000. Based on IMF and World Bank data in constant prices, Ireland and China averaged an annual growth rate of 8% in GDP per capita. However, FDI per capita grew at an average pace of 98% per year in Ireland, while in China it decreased by 1% -- absolute values averaged US$ 3,397 versus US$ 144, respectively. This suggests that, rather than a one-policy-fits-all approach, customized policies are more appropriate; and, if any generalization can be made, it should be based on a country's stage of economic development.
  • Topic: Development, Economics, Emerging Markets, International Trade and Finance, Foreign Direct Investment
  • Political Geography: Israel, Asia
  • Author: John M. Kline
  • Publication Date: 11-2012
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Prescriptions to increase the role of FDI in promoting sustainable development generally focus on the macro level -- getting policies right and otherwise improving the investment climate. These steps are necessary but not sufficient. Effective implementation processes, especially at the micro project level, are also essential to encourage FDI that matches host country development needs and priorities.
  • Topic: Development, Economics, Emerging Markets, International Trade and Finance, Foreign Direct Investment
  • Author: Harry G. Broadman
  • Publication Date: 02-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The dramatic increase in recent years of trade and foreign direct investment (FDI) in sub-Saharan Africa by firms from Asia—notably China and India—has become an emotionally charged issue. This is not surprising, since the resulting greater integration into international markets is exposing African firms and workers to greater competition, an inevitable by-product of development in today's globalized economy. Most assessments of this topic, with few exceptions, have relied on anecdotes and subjective judgments. Meaningful policy recommendations require systematic, objective analysis.
  • Topic: Development
  • Political Geography: Africa, China, India, Asia
  • Author: Gert Bruche
  • Publication Date: 07-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The growth of outward foreign direct investment (FDI) from developing countries and of a new generation of “emerging multinational enterprises” (EMNEs) has stimulated a flurry of publications. EMNEs have been portrayed as on their way to adulthood, latecomers that leapfrog into advanced positions, emerging giants, and challengers of conventional multinational enterprises (MNEs) from advanced economies.
  • Topic: Development, Economics, Foreign Direct Investment
  • Political Geography: South Asia, India
  • Author: Ken Davies
  • Publication Date: 06-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The 48 least-developed countries (LDCs), most of them in sub-Saharan Africa and a few in Asia, need foreign direct investment (FDI) to help meet their development targets. The FDI they now receive, although inadequate, is enough to demonstrate that investors see potential in them. It is therefore realistic for LDCs to seek more FDI, but they need to enhance their investment environments to attract it in the much greater quantities required. Donors can help by targeting official development assistance (ODA) on investment in human capital and supporting governance improvements. Meanwhile, LDCs should establish effective investment promotion agencies (IPAs).
  • Topic: Development, Economics, Poverty, Foreign Aid, Foreign Direct Investment
  • Political Geography: Africa, Asia
  • Author: Terutomo Ozawa
  • Publication Date: 06-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Although not yet fully conceptualized as a new catch-up model in mainstream development economics, the infant industry argument (protectionism designed to replace imports with domestic substitutes) is giving way to a foreign direct investment (FDI)-led model of industrialization.
  • Topic: Development, Economics, Industrial Policy, Foreign Direct Investment
  • Political Geography: United States, Japan, China
  • Author: Nicolás Marcelo Perrone
  • Publication Date: 05-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: The world food situation is back in the headlines as price levels surpass 2008 peaks, confirming the rising trend in food markets. Higher prices pose challenges to both food importing and exporting countries. One serious barrier to increasing food output remains the lack of necessary capital and technology in countries that have the potential to increase production rapidly. To avoid a food crisis, international organizations and several governments have increasingly turned to promoting foreign direct investment (FDI) by multinational enterprises (MNEs) in agriculture. This may be an effective solution, but some obstacles stand in the way of the establishment of such projects and, more importantly, their long-term sustainability.
  • Topic: Agriculture, Economics, Markets, Food, Foreign Direct Investment
  • Author: Daniel M. Firger
  • Publication Date: 05-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Developments in climate change policy and international investment law may be ushering in a new era characterized by profound harmonization between the two regimes. Although policy instruments such as the Kyoto Protocol's “Clean Development Mechanism” (CDM) have been in existence for years, it is only relatively recently that the international community has turned to low-carbon foreign direct investment (FDI) and away from command-and-control regulation as the preferred means by which to achieve future greenhouse gas emissions reductions. Meanwhile, states have begun to renegotiate international investment agreements (IIAs) or sign new treaties to take into account policy goals, including climate change mitigation, that extend beyond the regime's traditional preoccupation with investor protection. Though still somewhat tentative, emerging trends in both arenas are thus showing unmistakable signs of convergence.
  • Topic: Climate Change, Economics, Industrial Policy, Foreign Direct Investment
  • Political Geography: United States, China
  • Author: Nilgün Gökgür
  • Publication Date: 04-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: There are no up-to-date systematic data on the size, composition, ownership structure, and economic weight of state-owned enterprises (SOEs), so we are unable to assess the impact of SOE performance on stakeholders in domestic and overseas markets. Yet there is sufficient evidence of their expansion, especially following the 2008 financial crisis. Emerging markets, led by China, are now increasingly encouraging their SOEs to expand globally as multinational enterprises (MNEs).
  • Topic: Economics, Emerging Markets, Globalization, Markets
  • Political Geography: Africa, China
  • Author: Giorgio Sacerdoti
  • Publication Date: 04-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Some readers of the Columbia FDI Perspective No. 33 of December 14, 2010 may have been surprised to read Hans Smit's contribution against party-appointed arbitrators. The opening of his Perspective could not be expressed in more sweeping terms: "In my judgment, party-appointed arbitrators should be banned unless their role as advocates for the party that appointed them is fully disclosed and accepted. Until this is done, arbitration can never meet its aspiration of providing dispassionate adjudication..."
  • Topic: Economics, Human Rights, Foreign Direct Investment, Law
  • Political Geography: United States
  • Author: Sjoerd Beugelsdijk, Jean-François Hennart, Arjen Slangen, Roger Smeets
  • Publication Date: 08-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Researchers often call the value added (VA) in a host country by firms based in another country foreign direct investment (FDI) and use FDI stocks and flows from a country's balance of payments to measure it. What FDI stocks and flows actually measure, however, is narrower, since they record long term financial transactions by which domestic firms exert control over foreign firms. French FDI stocks in Australia, for example, measure the value of shares and reinvested earnings of Australian firms owned by French firms and the net indebtedness of these Australian firms to their French parents.
  • Topic: Economics, Markets, Foreign Direct Investment, Financial Crisis
  • Political Geography: France, Australia
  • Author: Kathryn Gordon, Joachim Pohl
  • Publication Date: 08-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In Columbia FDI Perspective No.37, Daniel M. Firger foretells “a new era characterized by profound harmonization” between climate change policy and international investment law, based on what he sees as “unmistakable signs of convergence” in recent investment treaty making. A study just released by the OECD suggests that convergence of investment treaty making toward environmental policy began about a decade ago, but also that “profound harmonization” of investment and climate change policy is still some time away.
  • Topic: Climate Change, Economics, Foreign Direct Investment
  • Political Geography: Colombia
  • Author: Hermann Ferré, Kabir Duggal
  • Publication Date: 08-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In September 2008, the bankruptcy of Lehman Brothers sent financial markets in the United States into a spin. Credit markets froze as banks began to mistrust counterparties, not knowing the extent of toxic assets in loan portfolios that could lead to another major bank collapse. The crisis quickly spread around the world. Governments were urged to take drastic measures. Experts discussed the possible nationalization of portions of the U.S. banking industry and other sectors. Other countries also considered measures to save key industries.
  • Topic: Economics, International Trade and Finance, Markets, Financial Crisis
  • Political Geography: United States
  • Author: Karl P. Sauvant, Persephone Economou
  • Publication Date: 07-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Twenty years ago, in the inaugural issue of the World Investment Report, the United Nations highlighted a shift in the global pattern of foreign direct investment (FDI) from bipolar, dominated by the United States and the European Community, to tri-polar (the FDI Triad), dominated by the European Community, the United States and Japan.
  • Topic: Economics, International Trade and Finance, United Nations, Foreign Direct Investment
  • Political Geography: United States, Japan, Europe
  • Author: Manfred Schekulin
  • Publication Date: 09-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: On May 25, 2011, US Secretary of State Hillary Clinton joined ministers from members of the Organisation of Economic Co-operation and Development (OECD) and developing economies to celebrate the Organisation\'s 50th anniversary and agree on an update of the OECD Guidelines for Multinational Enterprises, the fifth revision since their adoption in 1976. This marked the culmination of an intense one-year negotiating process involving a large number of stakeholders, international organizations and emerging economies.
  • Topic: Development, Economics, International Cooperation, Foreign Direct Investment
  • Political Geography: United States
  • Author: Geraldine McAllister, Joel H. Moser
  • Publication Date: 09-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: In his jobs address to a joint session of Congress last week, President Obama returned to a familiar theme: a call for nontraditional infrastructure investment as a generator of economic growth and, ultimately, jobs. The President's frequent references to “private investment” and “fully paid” infrastructure are encouraging, yet there is no assurance that domestic private capital investment alone is sufficient to reverse the degradation of the nation's infrastructure. As host to the largest flows of inward foreign direct investment (FDI), it is time that the United States employs this critical source of capital in tackling the nation's infrastructure deficit.
  • Topic: Economics, Labor Issues, Infrastructure, Foreign Direct Investment, Financial Crisis
  • Political Geography: United States
  • Author: George Kahale, III
  • Publication Date: 10-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Years ago, international tax lawyers introduced us to the term “Dutch sandwich.” The concept was to sandwich a Dutch company between an investor from country A and its investment in country B. The combination of the extensive network of Dutch tax treaties and investor-friendly domestic Dutch tax law meant that country A's investor could reduce withholding tax on dividends out of country B and perhaps eliminate capital gains tax altogether by structuring its investment through a Dutch company.
  • Topic: Economics, International Trade and Finance, Markets, Foreign Direct Investment
  • Political Geography: Europe
  • Author: Daniel H. Rosen, Thilo Hanemann
  • Publication Date: 10-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: China's outward foreign direct investment (OFDI) grew rapidly in the past decade, but flows to developed economies have been limited. Now China's direct investment flows to the United States are poised to rise substantially. This new trend offers tremendous opportunities for the U. S., provided policymakers take steps to keep the investment environment open and utilize China's new interest productively.
  • Topic: Climate Change, Economics
  • Political Geography: United States, China
  • Author: Kenneth P. Thomas
  • Publication Date: 12-2011
  • Content Type: Policy Brief
  • Institution: Columbia Center on Sustainable Investment
  • Abstract: Investment incentives (subsidies designed to affect the location of investment) are a pervasive feature of global competition for foreign direct investment (FDI). They are used by the vast majority of countries, at multiple levels of government, in a broad range of industries. They take a variety of forms, including tax holidays, grants and free land. Politicians, at least in the United States, may have good electoral incentives to use them.
  • Topic: Development, Environment, Globalization, International Trade and Finance, Foreign Aid, Foreign Direct Investment
  • Political Geography: United States, Europe