Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Survey of OECD Work on International Investment Abstract: International direct investment is increasingly recognised as an engine of economic growth and a powerful force for global integration. The OECD has long been active in analysing the implications of such forces and in influencing the design of appropriate policies for a global economy. This report summarises the findings of recent OECD work on the role of international investment in globalisation and economic development. Foreign direct investment is defined as capital invested for the purpose of acquiring a lasting interest in an enterprise and of exerting a degree of influence on that enterprise’s operations. Direct investment differs from portfolio investment in that it involves control of the asset in question, while portfolio investors are passive investors, motivated only by the rate of return on the asset. While this distinction is useful for analytical purposes, OECD member countries are increasingly adopting a broader view of FDI which includes many investments otherwise ... Creation-Date: 1998-01-01 Number: 1998/1 Handle: RePEc:oec:dafaaa:1998/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Stephen Thomsen Title: Southeast Asia: The Role of Foreign Direct Investment Policies in Development Abstract: At a time of continuing financial crisis in Asia, the question of the appropriate policies for recovery and for future sustainable development is paramount. One area of particular importance is the treatment of foreign investors. Foreign direct investment (FDI) has played a leading role in many of the economies of the region, particularly in export sectors, and has been a vital source of foreign capital during the crisis. The four countries reviewed in this study — Indonesia, Malaysia, the Philippines and Thailand (referred to hereinafter as the ASEAN4) — have all to varying degrees welcomed inward investment for its contribution to exports. As a result, although only a small share of total investment or employment in each economy, FDI has been a key factor driving export-led growth in Southeast Asia. Foreign firms have by no means been the only actors, but they have played a leading role in those sectors with the fastest export growth such as electronics. Through such investment ... Creation-Date: 1999-01-01 Number: 1999/1 Handle: RePEc:oec:dafaaa:1999/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kathryn Gordon Author-Name: Maiko Miyake Title: Deciphering Codes of Corporate Conduct: A Review of their Contents Abstract: Evidence of public concerns about globalisation is pervasive -- in the newspapers, on the Internet and more formal discussions of public policy. The business community has been attempting to position itself with respect to these concerns. Indeed, voluntary efforts to define and implement appropriate standards for business conduct constitute one of the more prominent managerial developments in recent years. These efforts have also often involved significant contributions from NGOs, governments and intergovernmental organisations. The issuance of voluntary codes of conduct has been an important facet of these developments. Such codes are voluntary expressions of commitment made by an organisation to influence or control behaviour for the benefit of the organisation itself and for the communities in which it operates. Private companies and associations of companies have issued such codes, calling them codes of conduct, ethics statements or guidelines, in response to both internal and ... Creation-Date: 1999-11-01 Number: 1999/2 Handle: RePEc:oec:dafaaa:1999/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kathryn Gordon Title: Rules for the Global Economy: Synergies Between Voluntary and Binding Approaches Abstract: This paper explores the differences, similarities and synergies between voluntary and binding approaches to international rules. Voluntary efforts to ensure that firms adhere to appropriate standards of business conduct have been an important recent development in international business. These efforts have included the publication of codes of conduct describing the nature of a firm’s commitments in such areas as environment, labour, product safety and bribery as well as implementation of specialised management systems designed to help firms honour these commitments. Yet, some NGOs and labour unions question the credibility of these efforts and wonder whether initiatives that do not have the force of law can ever be effective. This paper notes that all approaches to the social control of business organisations – voluntary and legally binding -- have distinctive shortcomings. These include problems of: credibility arising from imperfect monitoring and enforcement; capture of the control ... Creation-Date: 1999-11-01 Number: 1999/3 Handle: RePEc:oec:dafaaa:1999/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kathryn Gordon Author-Name: Maiko Miyake Title: Business Approaches to Combating Bribery: A Study of Codes of Conduct Abstract: Bribery is becoming a high priority public concern and the legal framework and enforcement apparatus used in the fight against it are being developed in the OECD and elsewhere. Reflecting these civic and legal pressures, firms now often deal with bribery in their codes of corporate conduct – public statements of commitment to abide by a certain standard of business conduct. The question of what firms do internally in the fight against bribery is probably as important to the successful outcome of that fight as formal anti-bribery law and as the attitudes of the public. This paper looks at corporate approaches to anti-bribery commitment and at managerial approaches to implementing these commitments in an inventory of 246 codes of conduct. The paper shows that, while bribery is often mentioned in the codes of conduct, there is considerable diversity in the language and concepts adopted in anti-bribery commitments. This diversity is a feature of the language used in describing parties ... Creation-Date: 2000-03-01 Number: 2000/1 Handle: RePEc:oec:dafaaa:2000/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Stephen Thomsen Title: Investment Patterns in a Longer-Term Perspective Abstract: Reports on trends in international direct investment tend to focus on recent developments. While such information is clearly of most relevance for policymakers and others interested in the pace and scale of globalisation, it fails to provide any perspective on the nature of globalisation itself. By their nature, recent developments give more weight to the cyclical element in global investment flows. A country’s performance in terms of annual inflows is often taken as a measure of the appropriateness of its policies and, by extension, of its relative attractiveness as a location for investment. Such important issues can only be assessed over a long time period and relying on more sources of information than simply flows of foreign direct investment (FDI). This study focuses on such long-term trends and includes, where appropriate, other estimates of multinational activity. By focusing on long-term patterns, this paper demonstrates how FDI has evolved from an activity largely ... Creation-Date: 2000-04-01 Number: 2000/2 Handle: RePEc:oec:dafaaa:2000/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Lithuania: Foreign Direct Investment Impact and Policy Analysis Abstract: The present study was prepared in the third quarter of 1999 as a background study to a Conference organised by the OECD Committee on International Investment and Multinational Enterprises (CIME), in collaboration with the Centre for Co-operation with Non-Members and with the support of the Estonian Investment Agency, on the subject of “Foreign Direct Investment Policy and Private Sector Development in the Baltic States”. This event took place in Tallinn on 17 November 1999. Its objective was to provide an overall assessment of the contribution of foreign direct investment (FDI) to the economic transformation of the three Baltic states since their independence in 1991-1992. The conference was one of the main activities organised in 1999 under the auspices of the OECD Baltic Regional Programme. Within the framework of the same programme, it was followed up by a Conference on Fiscal Incentives and Competition for Foreign Direct Investment in Vilnius in Spring 2000 organised in ... Creation-Date: 2000-07-01 Number: 2000/3 Handle: RePEc:oec:dafaaa:2000/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Main Determinants and Impacts of Foreign Direct Investment on China's Economy Abstract: The present note summarises the main findings of the research conducted under the auspices of the OECD/MOFTEC Co-operation Programme on Foreign Direct Investment (FDI) between the fall 1999 and the spring 2000 on Main Determinants and Impacts of FDI on China’s Economy. The OECD/MOFTEC Co-operation Programme on FDI was established in the spring of 1999. The present study was one of the most important activities conducted during this initial phase of joint work. It will provide the analytical underpinning to the investment policy dialogue which both parties have agreed to pursue over the coming year. Because of its size, China’s “open door policy” launched twenty years ago constitutes a unique and vast laboratory for the study of major structural changes in China and the world economy. It also provides an opportunity to test the benefits and the shortcomings of the economic policies which have been followed by the Chinese authorities and identify the improvements that could be ... Creation-Date: 2000-12-01 Number: 2000/4 Handle: RePEc:oec:dafaaa:2000/4-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Recent Trends, Policies and Challenges in SEE Countries Abstract: In the wake of the Balkan crisis, the Central and East European transition countries have been put into two groups, the seven South-East European countries (SEEC-7) and the five Central European countries (CEEC-5). SEEC-7 have not only been more immediately affected by the crisis but also show several common features of economic underdevelopment and distorted transition to a market economy. In order to help their future development, the Balkan Stability Pact has been set up. One of the aims of this internationally funded programme is to reduce investment risk in the region and lay the foundations for the inflow of private capital. This section looks at the main characteristics of foreign direct investment (FDI) in the region in comparison with CEECs. Further sections of the paper will provide a deeper insight into some crucial areas – foreign ... Creation-Date: 2000-11-01 Number: 2000/5 Handle: RePEc:oec:dafaaa:2000/5-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Private Initiatives for Corporate Responsibility: An Analysis Abstract: Voluntary initiatives in the area of corporate responsibility have been among the major trends in international business in recent years. Business surveys show that most large OECD-based multinational enterprises have participated in this trend in one way or another. These initiatives involve, first, the issuance of codes of corporate conduct setting forth commitments in such areas as labour relations, environmental management, human rights, consumer protection, disclosure and fighting corruption. These codes are often backed up by management systems that help firms respect their commitments in their dayto- day operations. More recent developments include work on management, reporting and auditing standards and of the emergence of supporting institutions (e.g. professional societies, consulting and auditing services). This paper analyses the results of a fact-finding project on business approaches to corporate responsibility ... Creation-Date: 2001-02-01 Number: 2001/1 Handle: RePEc:oec:dafaaa:2001/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Corporate Responsibility: Results of a Fact-Finding Mission on Private Initiatives Abstract: In the ongoing public debate on globalisation, concerns have been expressed about the economic, social and environmental impacts of deepening international trade and investment ties and about the activities of the multinational enterprises. These concerns focus on a variety of issues including labour relations, human rights, environment, corruption, control of technology and consumer protection. The high profile of this debate means that most multinational enterprises now pay close attention to public perceptions of their activities in the societies in which they operate. Globalisation has also brought with it additional management challenges for firms in area that has come to be called “legal compliance”. Multinational enterprise are often present in dozens of jurisdictions covering many legal and regulatory areas. These companies need to keep themselves informed about the regulations affecting them and must take steps to ensure that they comply with law and regulation. Compliance ... Creation-Date: 2001-02-01 Number: 2001/2 Handle: RePEc:oec:dafaaa:2001/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Making Codes of Corporate Conduct Work: Management Control Systems and Corporate Responsibility Abstract: Many companies have implemented programmes that help them to respond to societal concerns about the economic, social and environmental impacts of their activities. These help them to manage their compliance with legal or regulatory requirements and their response to “softer” forms of social control of business. These voluntary initiatives by companies have included public statements -- codes of conduct --in which they commit to behavioural norms in a variety of areas of business ethics (e.g. environment, anti-corruption, etc.). Some companies have backed these up with management systems designed to help them respect their commitments. Indeed, codes of conduct often represent just the first step in a process of improving management processes in support of legal and ethical compliance. Subsequent steps include the implementation of systems of management control designed to promote compliance. These systems typically employ a range of tools including accounting and record keeping ... Creation-Date: 2001-02-01 Number: 2001/3 Handle: RePEc:oec:dafaaa:2001/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Public Policy and Voluntary Initiatives: What Roles Have Governments Played? Abstract: Government involvement in “voluntary” initiatives for corporate responsibility has been extensive. This chapter reviews four main types of involvement -- legal and regulatory incentives, tax expenditures on the NGO sector, contributions to compliance expertise and moral suasion. The most influential government measures have been closely co-ordinated with broader public strategy, especially in relation to regulatory reform. Many of the private initiatives studied here are closely related to the legal and regulatory environments from which they emerge. Indeed, in some instances, these initiatives are so clearly a response to legal and regulatory incentives, that they could almost be called the extension or reflection into private management practices of public law and regulation. As a result, it is often difficult to analyse the impact or effectiveness of these initiatives independently of the legal and regulatory framework from which they emerge -- the two form an interdependent ... Creation-Date: 2001-02-01 Number: 2001/4 Handle: RePEc:oec:dafaaa:2001/4-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kathryn Gordon Title: The OECD Guidelines and Other Corporate Responsibility Instruments: A Comparison Abstract: The OECD Guidelines are recommendations by governments to multinational enterprises (MNEs) operating in or from the 33 countries that adhere to the Guidelines. The Guidelines help ensure that MNEs act in harmony with the policies of countries in which they operate and with societal expectations. They are the only comprehensive, multilaterally endorsed code of conduct for MNEs. They establish non-binding principles and standards covering a broad range of issues in business ethics. The basic premise of the Guidelines is that internationally agreed principles can help to prevent misunderstandings and build an atmosphere of confidence and predictability among business, labour, governments and society as a whole. The recent review of the Guidelines, concluded in June 2000, brought significant change to the contents of the Guidelines’ recommendations and sought to enhance their distinctive implementation procedures. At the time of the review, many participants noted the intense ... Creation-Date: 2001-12-01 Number: 2001/5 Handle: RePEc:oec:dafaaa:2001/5-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Codes of Corporate Conduct: Expanded Review of their Contents Abstract: Based on a slight extension of the inventory of 233 codes of corporate conduct collected for an earlier study (TD/TC/WP(98)74/FINAL), this paper takes a more in-depth look at the contents of the codes with respect to issue coverage and code implementation procedures. The main findings of this investigation of 246 voluntary codes of conduct are: The codes examined differ considerably in terms of their content and degree of detail. This reflects the underlying diversity of the organisations issuing the codes, which differ in terms of size, sector and regional affiliation. All the firms subscribing to the codes covered in this study are based in the OECD (most of the 29 member OECD countries are covered in the inventory). The firms operate in a variety of sectors including high technology, mass retailing, heavy manufacturing, light manufacturing, primary production and financial services. Some codes in the inventory are issued by business associations and others by NGOs. The codes ... Creation-Date: 2001-05-01 Number: 2001/6 Handle: RePEc:oec:dafaaa:2001/6-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Multinational Enterprises in Situations of Violent Conflict and Widespread Human Rights Abuses Abstract: In response to enquiries about foreign investment in Myanmar, the Committee for International Investment and Multinational Enterprises (CIME) asked the Secretariat to prepare a paper, under the responsibility of the latter, that would provide background information to interested parties. This paper was not only to shed light on business activity in Myanmar, but also to consider the broader challenges of conducting business responsibly in countries characterised by civil strife and extensive human rights violations. The present paper responds to this request and focuses on issues that are of particular relevance to extractive industries. This sector’s share of global investment is quite small, but its significance for particular host societies is large and the underlying issues for corporate responsibility affect the welfare of millions of people. While not ignoring the problems that have arisen in connection with multinational enterprise activity in troubled host countries, this ... Creation-Date: 2002-05-01 Number: 2002/1 Handle: RePEc:oec:dafaaa:2002/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Managing Working Conditions in the Supply Chain: A Fact-Finding Study of Corporate Practices Abstract: The expanding geographical sweep of supply chains reflects important advances in the area of logistics management. Some of these advances are linked to progress in computing, telecommunications and robotics technologies as well as to the accumulation of management expertise. Managers have integrated new technologies into their production and distribution processes and have explored new ways of running their core businesses and of managing relations with business partners. As a result, the organisation of companies has evolved -- strategic alliances and closer relations with suppliers and contractors have tended to blur the boundaries of the enterprise. This restructuring has been accompanied by new ways of looking at and organising the roles and responsibilities of various actors in supply chains -- sourcing and supplying firms, business service providers and policy makers. The greater sophistication in the management of supply chains is part of the long-standing process in which... Creation-Date: 2002-06-01 Number: 2002/2 Handle: RePEc:oec:dafaaa:2002/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hans Christiansen Author-Workplace-Name: OECD Author-Name: Charles P. Oman Author-Workplace-Name: OECD Author-Name: Andrew Charlton Author-Workplace-Name: Oxford University Title: Incentives-based Competition for Foreign Direct Investment: The Case of Brazil Abstract: The general benefits of attracting foreign direct investment (FDI), and the potential of FDI as a tool for regional economic development in particular, are commonly recognised by policy makers and analysts. A recent study prepared under the auspices of the OECD Committee on International Investment and Multinational Enterprises concluded that FDI generally supports growth in developing, emerging and transition economies, irrespective of their initial state of development ... Creation-Date: 2003-03-01 Number: 2003/1 Handle: RePEc:oec:dafaaa:2003/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Business Approaches to Combating Corrupt Practices Abstract: The international business community’s anti-corruption efforts are essential parts of broader systems for fighting corrupt business practices. These also include formal law enforcement, where an appropriate regulatory framework is already in place, and regulatory and other public sector reform, where it is not. This paper looks at anti-corruption material published on the websites of companies in UNCTAD’s list of top 100 non-financial multinational enterprises. It seeks to understand these companies’ views of corrupt business practices as well as their anti-corruption management and reporting practices. The paper answers the following questions: How many of the top 100 non-financial multinational enterprises make public statements on corruption on their websites? Forty three of the top 100 non-financial multinational enterprises present anti-corruption material on their websites. This is low relative to earlier studies of the top 100 companies’ propensity to make public ... Creation-Date: 2003-06-01 Number: 2003/2 Handle: RePEc:oec:dafaaa:2003/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: Marie-France Houde Author-Workplace-Name: OECD Author-Name: Katia Yannaca-Small Author-Workplace-Name: OECD Title: Relationships between International Investment Agreements Abstract: International, bilateral and regional agreements have proliferated in the last ten years to twenty years and new ones are still being negotiated. It is thus virtually certain that for some more time to come international investment disciplines will continue to co-exist side by side with different terms and sets of parties, and various degrees of overlap. It is therefore important to understand how these agreements would continue to interact and how their overlaps and differences could be managed in a harmonious way. The present study, with due regard to the complexity of the issues, seeks to increase the level of understanding of the relationships between international investment disciplines, drawing on an analysis of key international investment agreements (IIAs) and OECD’s experience with the relationship between its own instruments and other relevant agreements.1 The study is organised as follows. Section 1 broadly states the issues being addressed in the paper ... Creation-Date: 2004-05-01 Number: 2004/1 Handle: RePEc:oec:dafaaa:2004/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Most-Favoured-Nation Treatment in International Investment Law Abstract: Bilateral and regional investment agreements have proliferated in the last decade and new ones are still being negotiated. Most-Favoured-Nation (MFN) clauses link investment agreements by ensuring that the parties to one treaty provide treatment no less favourable than the treatment they provide under other treaties in areas covered by the clause. MFN clauses have thus become a significant instrument of economic liberalisation in the investment area. Moreover, by giving the investors of all the parties benefiting from a country’s MFN clause the right, in similar circumstances, to treatment no less favourable than a country’s closest or most influential partners can negotiate on the matters the clause covers, MFN avoids economic distortions that would occur through more selective country-by-country liberalisation. Such a treatment may result from the implementation of treaties, legislative or administrative acts of the country and also by mere practice ... Creation-Date: 2004-09-01 Number: 2004/2 Handle: RePEc:oec:dafaaa:2004/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Fair and Equitable Treatment Standard in International Investment Law Abstract: The obligation to provide “fair and equitable treatment” is often stated, together with other standards, as part of the protection due to foreign direct investment by host countries. It is an “absolute”, “non-contingent” standard of treatment, i.e. a standard that states the treatment to be accorded in terms whose exact meaning has to be determined, by reference to specific circumstances of application, as opposed to the “relative” standards embodied in “national treatment” and “most favoured nation” principles which define the required treatment by reference to the treatment accorded to other investment1. Although some references to the standard can be found in the first negotiating attempts of multilateral trade and investment instruments, it became established as a principle mainly through the increasing network of bilateral investment treaties. The obligation of the parties to investment agreements to provide to each other’s investments “fair and equitable treatment” ... Creation-Date: 2004-09-01 Number: 2004/3 Handle: RePEc:oec:dafaaa:2004/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: "Indirect Expropriation" and the "Right to Regulate" in International Investment Law Abstract: It is a well recognised rule in international law that the property of aliens cannot be taken, whether for public purposes or not, without adequate compensation. Two decades ago, the disputes before the courts and the discussions in academic literature focused mainly on the standard of compensation and measuring of expropriated value. The divergent views of the developed and developing countries raised issues regarding the formation and evolution of customary law. Today, the more positive attitude of countries around the world toward foreign investment and the proliferation of bilateral treaties and other investment agreements requiring prompt, adequate and effective compensation for expropriation of foreign investments have largely deprived that debate of practical significance for foreign investors. Disputes on direct expropriation – mainly related to nationalisation that marked the 70s and 80s -- have been replaced by disputes related to foreign investment regulation ... Creation-Date: 2004-09-01 Number: 2004/4 Handle: RePEc:oec:dafaaa:2004/4-EN Template-type: ReDIF-Paper 1.0 Author-Name: Hans Christiansen Title: ODA and Investment for Development: What Guidance Can Be Drawn from Investment Climate Scoreboards? Abstract: The present paper was prepared in the context of a joint project between the OECD Investment Committee (IC) and Development Assistance Committee (DAC) on Official Development Assistance and Investment for Development. It responds to discussions at the IC-DAC Workshop on Synergies between ODA and Foreign Direct Investment on 11 March 2004, during which participants opined that development agencies lack information about the quality of the investment climate in developing countries and the likely repercussions for direct investment. The purpose of the present paper is threefold. First, it provides an overview of a variety of scoreboards for the investment climate that have been established by a number of actors, including the World Bank, UNCTAD and several private “think tanks”. Second, it documents their similarities and discrepancies in assessing the investment climates of developing, emerging and transition economies (henceforth jointly referred to as “developing countries”) ... Creation-Date: 2004-11-01 Number: 2004/5 Handle: RePEc:oec:dafaaa:2004/5-EN Template-type: ReDIF-Paper 1.0 Author-Name: Thuc Duc Le Author-Workplace-Name: Vietnam Institute of Economics Author-Name: Thi Thanh Ha Nguyen Author-Workplace-Name: Vietnam Institute of Economics Author-Name: Thu Hang Nguyen Author-Workplace-Name: Vietnam Institute of Economics Author-Name: Thi Hanh Tran Author-Workplace-Name: Central Institute for Economic Management Title: Mobilising Investment for Development: Role of ODA the 1993-2003 Experience in Vietnam Abstract: The Vietnamese economy was in the doldrums in the 1980s and until a certain progress had been made in the context of Doi Moi there was little incentive for businesses to invest. The following reasons are commonly given for the sluggish economic activity: a lack of appropriate infrastructure (causing market disconnectedness even within the country); weak links to the world market; a shortage of skilled labour and managerial capacity; and an inefficient or business unfriendly public administration. ODA to Vietnam was allocated in such a way as to remedy these obstacles and the donors’ well designed strategies are seen as a major factor behind the success of ODA. National ownership, an important feature of ODA programmes, has mostly been strong in ODA to Vietnam. Most of the activities of the past were closely aligned with the Vietnamese government’s development priorities. It should nevertheless be recognised that some ODA projects have aroused little enthusiasm among public ... Creation-Date: 2004-12-01 Number: 2004/6 Handle: RePEc:oec:dafaaa:2004/6-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Transparency and Third Party Participation in Investor-State Dispute Settlement Procedures Abstract: The present document surveys the issues related to transparency and third party participation in investor-state dispute settlement procedures. Section I examines the way in which the current rules apply to these issues. Section II describes the steps taken to improve the transparency of the system at the governmental level, by the arbitral Tribunals and the International Centre for the Settlement of Investment Disputes (ICSID). Section III examines the perceived advantages as well as the challenges of additional transparency. The last section sums up. Creation-Date: 2005-05-01 Number: 2005/1 Handle: RePEc:oec:dafaaa:2005/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kathryn Gordon Author-Workplace-Name: OECD Author-Name: Clelia Mitidieri Author-Workplace-Name: OECD Title: Multilateral Influences on the OECD Guidelines for Multinational Enterprises Abstract: The OECD Guidelines for Multinational Enterprises (the “Guidelines”) are one of many intergovernmental instruments that seek to promote economic, social and environmental progress. The OECD Guidelines do this by establishing concepts and principles for responsible business conduct that help “to ensure that the operation of [multinational enterprises] is in harmony with government policies, to strengthen the basis of mutual confidence between enterprises and the societies in which they operate, to help improve the foreign investment climate and to enhance the contribution to sustainable development... Creation-Date: 2005-09-01 Number: 2005/2 Handle: RePEc:oec:dafaaa:2005/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: Jeremy Baskin Author-Workplace-Name: OECD Author-Name: Kathryn Gordon Author-Workplace-Name: OECD Title: Corporate Responsibility Practices of Emerging Market Companies Abstract: Emerging market companies make up 3.8 per cent of the FT500, the 500 largest global traded companies1 and 4.6 per cent of the Dow Jones Global Index of 2,500 companies. OECD statistics show that, while the bulk of international investment flows originate in the OECD, non-OECD countries are increasingly important sources of investment flows. This paper presents a fact finding study of the... Creation-Date: 2005-09-01 Number: 2005/3 Handle: RePEc:oec:dafaaa:2005/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: Katia Yannaca-Small Title: Improving the System of Investor-State Dispute Settlement Abstract: Investor-state dispute settlement mechanisms embodied in most investment treaties provide rights to foreign investors to seek redress for damages arising out of alleged breaches by host governments of investment-related obligations. The system of investment dispute settlement has borrowed its main elements from the system of commercial arbitration despite the fact that investor-state disputes often raise public interest issues which are usually absent from international commercial... Creation-Date: 2006-02-01 Number: 2006/1 Handle: RePEc:oec:dafaaa:2006/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Catriona Paterson Title: Investor-to-State Dispute Settlement in Infrastructure Projects Abstract: This paper was prepared in the context of the Investment Committee’s project on International Investor Participation in Infrastructure. It summarises information available in the public domain about investor-state dispute settlements in the infrastructure sectors. The document as a factual survey, however, does not necessarily reflect the views of the OECD or those of its Member governments. It cannot be construed as prejudging ongoing or future negotiations or disputes pertaining to international investment agreements. The purpose of the paper is to provide an indication of some of the challenges to international investor participation in infrastructure that have in the past led to the breakdown of working relationships between public and private partners. This paper was prepared by Catriona Paterson, a Consultant in the OECD Investment Division. Creation-Date: 2006-03-01 Number: 2006/2 Handle: RePEc:oec:dafaaa:2006/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: Katia Yannaca-Small Title: Interpretation of the Umbrella Clause in Investment Agreements Abstract: This paper was prepared by Katia Yannaca-Small, Legal Advisor, Investment Division, Directorate for Financial and Enterprise Affairs, OECD. Thanks are due to Catriona Paterson, a consultant to the Investment Division, for research input. It has been developed as an input to the Investment Committee’s work aimed at enhancing understanding of the "umbrella clause" in international investment agreements and has benefited from discussions and a variety of perspectives in the Committee. It was also a subject for discussion at an APEC-UNCTAD Regional Seminar on Investor-State Dispute Settlement in Mexico City on 9-10 October 2006. The paper as a factual survey does not necessarily reflect the views of the OECD or those of its Member governments. It cannot be construed as prejudging ongoing or future negotiations or disputes pertaining to international investment agreements. Creation-Date: 2006-10-01 Number: 2006/3 Handle: RePEc:oec:dafaaa:2006/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: Takeshi Koyama Author-Workplace-Name: OECD Author-Name: Stephen S. Golub Author-Workplace-Name: OECD Title: OECD's FDI Regulatory Restrictiveness Index: Revision and Extension to more Economies Abstract: This paper provides a revised measure of regulatory restrictions on inward foreign direct investment (FDI) for OECD countries and extends the approach to 13 non-member countries. The methodology is largely similar to that adopted in the previous version of the OECD indicator and covers three broad categories of restrictions: limitations on foreign ownership, screening or notification procedures, and management and operational restrictions. The FDI restrictiveness indicator captures statutory deviations from "national treatment", i.e. discrimination against foreign investment. When combined with other factors having an influence on foreign investment decisions, it has proven to be a good predictor of countries' inward FDI performance.

L'indice OCDE des restrictions réglementaires sur les investissements en provenance de : Révisions et extension à plus de pays.
Ce document présente une mesure révisée des restrictions réglementaires envers les influx des investissements directs étrangers (IDE) pour les pays de l'OCDE et étend la mesure à 13 pays non-membres. L'approche est dans son ensemble similaire à celle adoptée lors de la version antérieure de l'indicateur de l'OCDE, et couvre essentiellement trois catégories de restrictions: les limites sur la part de firmes domestiques pouvant être détenues par le capital étranger, les procédures d'examen sélectif et de notification, et les restrictions concernant la gestion et les opérations des entreprises. L'indicateur de restrictions réglementaires mesure les déviations par rapport au "traitement national" c'est-à-dire les discriminations à l'encontre des investissements étrangers. Combiné à d'autres facteurs ayant une influence sur les décisions d'investissement à l'étranger, cet indicateur contribue à expliquer la performance des pays en matière d'influx des IDE. Classification-JEL: F21; F23 Keywords: contrôle étranger, FDI restrictions, foreign direct investment, foreign ownership, investissement direct étranger, restrictions sur l'IDE Creation-Date: 2006-12-01 Number: 2006/4 Handle: RePEc:oec:dafaaa:2006/4-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Accountability for Security-Related Investment Policies Abstract: This paper looks in detail at accountability in the context of security-related investment policies as background for discussions at Freedom of Investment Roundtable VIII and to support completion of the accountability section in the guidance provided in the April 2008 reports by the OECD Investment Committee. The guidance on restrictive investment measures contained in these reports is reproduced in Annex 1. Creation-Date: 2008-11-01 Number: 2008/1 Handle: RePEc:oec:dafaaa:2008/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Protection of ‘Critical Infrastructure’ and the Role of Investment Policies Relating to National Security Abstract: Since early 2006, the Freedom of Investment (FOI) project has provided a forum for discussing how governments can reconcile their duty to safeguard the essential security interests of their people with the need to protect and expand an open international investment system. The project includes in-depth policy discussions of selected national security topics. Recent policy changes in OECD and non-member countries show that critical infrastructure has gained prominence as a concern for essential security interests. Drawing on notifications made under OECD investment instruments and on other publicly available information, this note presents a factual survey of governments‟ general strategies for protecting critical infrastructure and of the role that investment policy plays in these strategies. Creation-Date: 2008-01-05 Number: 2008/1 Handle: RePEc:oec:dafaaa:2008/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Security-Related Terms in International Investment Law and in National Security Strategies Abstract: This fact-finding study, prepared in support of discussions at a March 2009 ―Freedom of Investment‖ Roundtable hosted at the OECD, explores the meaning of three terms – essential security interests, public order and national security – that are used frequently in international policy dialogue, including on investment. Creation-Date: 2009-01-01 Number: 2009/1 Handle: RePEc:oec:dafaaa:2009/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Foreign Government-Controlled Investors and Recipient Country Investment Policies: A scoping paper Abstract: This paper was prepared to support multilateral discussions of recipient country investment policies towards foreign government-controlled investors (FGCIs) at the eighth and ninth Freedom of Investment (FOI) Roundtables, convened under the auspices of the OECD Investment Committee. Creation-Date: 2009-01-01 Number: 2009/1 Handle: RePEc:oec:dafaaa:2009/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Lahra Liberti Author-Workplace-Name: OECD Title: Intellectual Property Rights in International Investment Agreements: An Overview Abstract: This article provides an overview of recent developments in investment treaty practice with regard to the protection of intellectual property rights (IPRs). The analysis departs from traditional IPR studies developed almost exclusively in the context of the WTO-TRIPS Agreement. The aim of this study is to clarify the extent to which and how international investment agreements (IIAs), including Regional Trade Agreements (RTAs) with an investment chapter, increase the scope of IPR protection beyond TRIPS minimum standards. Some IPR provisions found in the sample of RTAs extend IPR protection beyond WTO-TRIPS minimum standards, by providing supplementary coverage of specific standards or additional obligations under the intellectual property chapter. Expanded IPR protection can also derive from the unqualified treatment protection provisions found in IIAs. This note further explores possible reasons for the limited role played by investor-state arbitration in the enforcement of IPRs. Classification-JEL: F21; F23; K33 Keywords: intellectual property rights, international investment, investment agreements Creation-Date: 2010-05-01 Number: 2010/1 Handle: RePEc:oec:dafaaa:2010/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Identification of Foreign Investors: A Fact Finding Survey of Investment Review Procedures Abstract: This report presents the results of a fact finding survey on how governments seek to establish the identity of foreign investors, with a particular focus on transsectoral, security-related investment reviews. Creation-Date: 2010-05-01 Number: 2010/1 Handle: RePEc:oec:dafaaa:2010/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Title: Foreign State Immunity and Foreign Government Controlled Investors Abstract: Discussions at the “Freedom of Investment” Roundtables, hosted by the OECD Investment Committee, have stressed that increased investments by foreign State-controlled investors can bring significant benefits to home and host societies, but have also noted that they can raise concerns. This paper examines two principal issues concerning foreign State-controlled investors: whether the doctrine of foreign state immunity may make it difficult for private parties to pursue legitimate claims against them and whether that doctrine creates regulatory enforcement gaps for host countries. Although the restrictive approach to immunity is now widely recognised, important issues, such as whether the financial investment activities of a sovereign wealth fund are commercial or sovereign acts, remain uncertain. In the area of regulation, the paper analyses state policies in the area of tax, competition law and criminal law, and notes key factors that may influence immunity in such cases. Classification-JEL: F21; F23; G28; H82; K21; K33; K34 Keywords: antitrust, central banks, competition law, foreign government controlled investors, foreign sovereign immunity, foreign state immunity, international investment law, regulation, sovereign wealth funds, state immunity, state-controlled investors, state-owned enterprises, taxation Creation-Date: 2010-08-01 Number: 2010/2 Handle: RePEc:oec:dafaaa:2010/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: Blanka Kalinova Author-Workplace-Name: OECD Author-Name: Angel Palerm Author-Workplace-Name: OECD Author-Name: Stephen Thomsen Author-Workplace-Name: OECD Title: OECD's FDI Restrictiveness Index: 2010 Update Abstract: The 2010 update of the FDI Restrictiveness Index (FDI Index) expands the sectors covered and revises the way in which FDI measures are scored and weighted. The FDI Index is now available for all OECD Members, adherents to the Declaration on International Investment and Multinational Enterprises, Enhanced Engagement countries and other G-20 countries. The FDI Index, originally developed in 2003, is jointly maintained by the OECD Investment Division and the OECD Economics Department as one component of the revised 2008 OECD Indicator of Product Market Regulation (PMR) from which the Going for Growth policy priorities are drawn. It is also used on a stand-alone basis to assess the restrictiveness of FDI policies in OECD Economic Surveys; reviews of candidates for accession; and OECD Investment Policy Reviews, including reviews of Enhanced Engagement countries, new adherents to the OECD Declaration on International Investment and Multinational Enterprises and of other non-OECD partner countries. The FDI Index has been used as a summary measure of OECD members’ positions under the OECD investment instruments in the Committee’s 2009 report updating countries’ reservations to the OECD Codes and exceptions to the OECD National Treatment instrument (NTI). The extension to all G-20 countries enables its use in the G-20 context. Classification-JEL: F21; F23 Keywords: FDI restrictions, foreign direct investment, foreign ownership Creation-Date: 2010-08-01 Number: 2010/3 Handle: RePEc:oec:dafaaa:2010/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kathryn Gordon Author-Workplace-Name: OECD Author-Name: Joachim Pohl Author-Workplace-Name: OECD Title: Environmental Concerns in International Investment Agreements: A Survey Abstract: International investment agreements define commitments on investment protection, but also shed light on how these commitments are to be integrated with other public policy objectives. Investment protection in the context of environmental regulation has been a frequent source of controversy and investor-state disputes. In order to enhance the factual basis for debate in this policy area, the present survey establishes a statistical portrait of governments’ investment treaty writing practices in relation to environmental concerns in a sample of 1,623 IIAs, roughly half of the global investment treaty population. The survey provides a statistical portrait of the extent, kind and frequency of treaty language referring to environmental concerns and the evolution of the use of such language over time. It shows that: i) over time, more treaties contain such language; ii) only about 8% of the sample treaties include references to environmental concerns; and iii) there are wide variations in the content of such language, both across countries and across time. Classification-JEL: F02; F18; F21; F23; F42; F53; K32; K33; N40; N50; N70; Q56; Q58 Keywords: bilateral investment treaty, foreign investment, international investment, international investment law, regulation Creation-Date: 2011-06-01 Number: 2011/1 Handle: RePEc:oec:dafaaa:2011/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Stephen S. Golub Author-Workplace-Name: Swarthmore College Author-Name: Céline Kauffmann Author-Workplace-Name: OECD Author-Name: Philip Yeres Author-Workplace-Name: Swarthmore College Title: Defining and Measuring Green FDI: An Exploratory Review of Existing Work and Evidence Abstract: This paper was developed at the request of the OECD Working Party of the Investment Committee to document efforts to date to define and measure green FDI and to investigate the practicability of various possible definitions, as well as to identify investment policy restrictions to green FDI. It does so by reviewing the literature and existing work on the contributions of FDI to the environment; by providing a two-part definition of green FDI; and by discussing various assumptions necessary to estimate the magnitude of 'green' FDI. Classification-JEL: E01; F21; F23; Q01; Q56 Keywords: environmental goods and services, FDI measurement, foreign investment, green FDI, green growth, international investment, technology transfer Creation-Date: 2011-09-01 Number: 2011/2 Handle: RePEc:oec:dafaaa:2011/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: Céline Kauffmann Author-Workplace-Name: OECD Author-Name: Cristina Tébar Less Author-Workplace-Name: OECD Author-Name: Dorothee Teichmann Author-Workplace-Name: OECD Title: Corporate Greenhouse Gas Emission Reporting: A Stocktaking of Government Schemes Abstract: This paper provides an overview of current government schemes promoting corporate reporting of greenhouse gas (GHG) emissions and analyses their main building blocks. It describes the drivers and challenges for governments, companies and investors in dealing with GHG reporting and includes 4 case studies examining in more depth the domestic GHG emission reporting schemes of the UK, France, Japan and Australia. This work is part of a project with UNCTAD, the Climate Disclosure Standards Board (CDSB) and the Global Reporting Initiative (GRI) on consistency of climate change reporting. Classification-JEL: F23; G32; L15; M4; Q56 Keywords: climate change, corporate governance, emissions trading, greenhouse gas emissions, reporting, responsible business conduct Creation-Date: 2012-06-12 Number: 2012/1 Handle: RePEc:oec:dafaaa:2012/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Joachim Pohl Author-Workplace-Name: OECD Author-Name: Kekeletso Mashigo Author-Workplace-Name: OECD Author-Name: Alexis Nohen Author-Workplace-Name: OECD Title: Dispute Settlement Provisions in International Investment Agreements: A Large Sample Survey Abstract: Investor-State dispute settlement mechanisms (ISDS) are an important component of most International Investment Agreements (IIAs) and have significant influence on how disputes between States and investors are resolved. This statistical survey of a large sample of 1,660 bilateral investment treaties (BITs) identifies the main parameters of ISDS regulation in BITs; traces their emergence, frequency and dissemination over time; and highlights past and recent country-specific treaty practice. The survey finds among other things that many countries define the procedural framework thinly compared to advanced domestic procedural frameworks, despite a broad trend toward greater regulation in treaties of parameters of ISDS. Many treaties offer foreign investors a range of procedural choices, such as a choice between arbitration fora. The survey also highlights the diversity that characterises the design of ISDS: over a thousand different combinations of rules regulating ISDS can be found in only 1,660 bilateral treaties –, with variation found both at editorial and substantial level. Differences in policy approaches between countries are the source of some of this variance, but it appears that much of it may not reflect differences in policy. The study also found little evidence of general convergence of approaches towards regulating ISDS in BITs, or indeed much development in the BIT negotiating practice of a number of countries. A different approach, characterised by significantly more thorough ISDS regulation and pioneered by some countries, seems to spread increasingly in multilateral IIAs and more comprehensive treaties. Classification-JEL: F02; F21; F23; F53; K33; K41; N40; O38; P45; P48 Keywords: bilateral investment treaty, dispute resolution, foreign investment, international arbitration, international investment, international investment agreements, international investment law, regulation Creation-Date: 2012-12-14 Number: 2012/2 Handle: RePEc:oec:dafaaa:2012/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Author-Name: Kathryn Gordon Author-Workplace-Name: OECD Title: Investor-State Dispute Settlement: A Scoping Paper for the Investment Policy Community Abstract: Governments are facing an increasing number of arbitration claims by foreign investors relating to important public policies or seeking substantial damages, and many governments are taking a greater joint interest in how such cases are resolved in investor-state dispute settlement (ISDS). This scoping paper has supported inter-governmental dialogue about ISDS at several OECD-hosted investment Roundtable meetings. Part I compares ISDS with other international and domestic processes for resolving disputes including the WTO and European Court of Human Rights, and considers how ISDS may affect domestic policy making processes. Part II examines eight current and emerging issues in ISDS: (i) investors’ access to justice; (ii) the costs of ISDS cases; (iii) remedies for foreign investors under investment treaties and their possible impact on a level playing field for domestic and foreign investors; (iv) the enforcement and execution of ISDS awards; (v) third party financing of ISDS; (vi) the characteristics, selection and regulation of arbitrators in ISDS; (vii) forum shopping and treaty shopping by investors; and (viii) the question of the consistency of decision-making in ISDS. Part III outlines key findings from a statistical survey of ISDS provisions in 1,660 bilateral investment treaties. Public comment on this paper, including 46 investment policy questions (as outlined in the paper), was obtained in May-July 2012 and is available on the OECD website. Classification-JEL: D61; D63; D82; F02; F21; F23; F53; F55; F63; G23; G28; K23; K33; K41; L84; P45 Keywords: access to justice, arbitration costs, arbitrators, bilateral investment treaties, comparative law, comparative remedies, competitive neutrality, consistency of arbitral decisions, dispute resolution, dispute settlement, domestic impact of investment law, ECHR dispute settlement, enforcement of arbitration awards, foreign investment, forum shopping, treaty shopping, international arbitration, international economic law, international investment, international investment agreements, international investment law, investment arbitrators, investment law and development, investment treaties, investor-state dispute settlement, judicial review, level playing field, litigation finance, non-pecuniary remedies, remedies, selection and regulation of arbitrators, third party financing, third party funding, WTO dispute settlement Creation-Date: 2012-12-31 Number: 2012/3 Handle: RePEc:oec:dafaaa:2012/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: Ken Davies Title: China Investment Policy: An Update Abstract: This working paper examines China’s investment policy since the publication of the 2008 OECD Investment Policy Review of China. China remains the largest recipient of FDI among developing countries and FDI continues to play a disproportionately large role in promoting China’s trade, investment and tax revenue generation, albeit not as large as before. A number of structural changes occurred in recent years, including a slight revival of equity joint ventures, faster growth in services-sector FDI than in manufacturing, and a reorientation of FDI from the Eastern Region to the Central and Western Regions. In addition, China has been rapidly becoming an important source of outward foreign direct investment (OFDI), a trend that was reinforced by the global financial and economic crisis. While foreign investor confidence is maintained by China’s economic strength, it is being undermined by rising labour costs and shortages of skilled labour and by greater competition (especially from Chinese companies). In addition, there are fears that an investment protectionist trend may be emerging in China, as evidenced by, for example, perceived discrimination against foreign-owned companies in government procurement. The Chinese government has taken a number of measures to streamline and decentralise FDI administration and strengthen enforcement. The emphasis has been on aligning inward FDI flows more closely with national priorities, including upgrading industrial sophistication, supporting innovation, setting up outsourcing industries and developing poorer hinterland regions. The most important change is the three-fold raising of the ceiling on provincial examination and approval authority over foreign investment projects in the “permitted catalogue”. Merger notification discrimination against foreign investors has been removed and a national security review process for cross-border M&As has been announced. The Chinese government should continue its efforts to liberalise and increase the transparency and predictability of the framework for both inward and outward FDI. Classification-JEL: F02; F21; F23; F52; F63; G34; L21; L32 Keywords: bilateral investment treaties, China, foreign investment, international investment, international investment agreements, investment treaties, level playing field, state-owned enterprises Creation-Date: 2013-05-29 Number: 2013/1 Handle: RePEc:oec:dafaaa:2013/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Françoise Nicolas Author-Workplace-Name: Institut Français des relations internationales Author-Name: Stephen Thomsen Author-Workplace-Name: OECD Author-Name: Mi-Hyun Bang Author-Workplace-Name: OECD Title: Lessons from Investment Policy Reform in Korea Abstract: As more and more countries seek to liberalise their foreign investment regimes to attract global flows of foreign direct investment (FDI), an essential question for policy-makers is no longer just what to reform but also how to reform. How is a reformist government to sell the idea of reform to the general public and to counter any opposition to reform? How are those who lose from reform in the short term to be compensated? Does sequencing of reforms matter? Korea offers a particularly interesting case study because its reforms beginning in the 1990s were both rapid and far-reaching. Based on the OECD FDI Regulatory Restrictiveness Index, Korea was the biggest reformer of its policies towards FDI between 1997 and 2010 among a sample of 40 developed and emerging countries. The objective of this study is to document the liberalisation of the FDI regime in Korea and to examine how and why it came about. What were the main obstacles and what were the main drivers? How did FDI liberalisation relate to other reforms (trade policy and regulatory reform, policies towards outward investment)? The paper does not ask what more Korea needs to do but rather what lessons can we draw from the Korean experience about how to achieve rapid and sustainable reforms? The insights from Korean liberalisation are useful for other countries, particularly non-OECD members in Asia and elsewhere, which still have high levels of statutory restrictions as measured by the FDI Index. Many of these countries are eager to attract more investment and recognise that they will need to reform their investment regime but are unsure how best to proceed. Each country?s reform path is unique, and this study will not provide a roadmap for other countries to follow, but it will nevertheless serve as a useful model for reformers in other countries and provide evidence that successful reform is accompanied by rising inflows of direct investment. Classification-JEL: F21; F23; F53; O24; O53 Keywords: FDI Regulatory Restrictiveness Index, foreign direct investment, investment policy reform, segyehwa, South Korea Creation-Date: 2013-07-30 Number: 2013/2 Handle: RePEc:oec:dafaaa:2013/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Title: Investment Treaties as Corporate Law: Shareholder Claims and Issues of Consistency Abstract: Claims by company shareholders seeking damages from governments for so-called "reflective loss" now make up a substantial part of the investor-state dispute settlement (ISDS) caseload. (Shareholders’ reflective loss is incurred as a result of injury to “their” company, typically a loss in value of the shares; it is generally contrasted with direct injury to shareholder rights, such as interference with shareholder voting rights.) This paper considers the consistency issues raised by shareholder claims for reflective loss in ISDS. The paper first compares the approach to shareholder claims in ISDS with advanced systems of national corporate law (and other international law). ISDS arbitrators have consistently found that shareholders can claim individually for reflective loss in ISDS under typical BITs. This can be seen as a success story from the point of view of consistency of legal interpretation and improves investor protection for potential claimant shareholders in many cases. In contrast, however, advanced national systems and international law generally apply what has been called a "no reflective loss" principle to shareholder claims. Second, the paper analyses the policy issues relating to consistency that are raised by shareholder claims for reflective loss in ISDS. National and international law barring shareholder claims for reflective loss is often explicitly driven by policy considerations relating to consistency, predictability, avoidance of double recovery and judicial economy. Limiting recovery to the company is seen as both more efficient and fairer to all interested parties. In contrast, ISDS tribunals and commentators have generally given limited consideration to the policy consequences of allowing shareholder claims for reflective loss. The third part of the paper addresses the issue of company recovery (including two different existing systems which expand the ability of foreign-controlled companies to recover in ISDS) and its relevance to shareholder claims for reflective loss. The paper also contains a series of questions for discussion and has been discussed by governments participating in an OECD-hosted investment roundtable. Keywords: access to justice, arbitrators, bilateral investment treaties, company law, comparative law, competitive neutrality, consistency, consistency of arbitral decisions, corporate law, creditors, creditors’ rights, derivative action, derivative injury, derivative loss, domestic impact of investment law, double jeopardy, double recovery, foreign investment, international arbitration, international economic law, international investment, international investment agreements, international investment law, investment arbitration, investment treaties, investor-state dispute settlement, judicial economy, level playing field, multiple claims, reflective injury, reflective loss, settlement, shareholder claims, shareholder remedies, shareholder rights, shareholders, stockholder remedies, stockholders, treaty shopping Creation-Date: 2013-11-19 Number: 2013/3 Handle: RePEc:oec:dafaaa:2013/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: Joachim Pohl Author-Workplace-Name: OECD Title: Temporal Validity of International Investment Agreements: A Large Sample Survey of Treaty Provisions Abstract: International investment agreements (IIAs) almost universally define their temporal validity and thus set conditions for States’ exit from these treaties. This study presents the results of the survey of language that determines the temporal validity of 2,061 bilateral investment agreements that the 55 economies participating in the OECD-hosted Freedom of Investment Roundtables have concluded with any other economy. The paper summarises in its first part past and current treaty practice in this regard: how do States design the parameters that define the temporal validity of their treaties and the duration of the obligations contained therein? How has this design evolved over time? Do different kinds of IIAs take different approaches to this matter? Have individual States developed distinct practices or policies? The second part of the paper presents key findings that result from the analysis of treaty practice in a large number of agreements. It highlights characteristics of the provisions on temporal validity employed in IIAs; emphasises the collective engagement that results from the clauses in IIAs and the consequences of country-specific practice; and suggests questions on intriguing policy choices that a large comparative study reveals. Classification-JEL: F21; F23; F53; F55; K33; K41; N40; P45 Keywords: bilateral investment treaty, comparative law, foreign investment, international investment, international investment agreements, international investment law, investment law, investment treaties Creation-Date: 2013-12-18 Number: 2013/4 Handle: RePEc:oec:dafaaa:2013/4-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kathryn Gordon Author-Workplace-Name: OECD Author-Name: Joachim Pohl Author-Workplace-Name: OECD Author-Name: Marie Bouchard Author-Workplace-Name: OECD Title: Investment Treaty Law, Sustainable Development and Responsible Business Conduct: A Fact Finding Survey Abstract: Investment treaty law – which is scattered over 3 000 international investment agreements adopted over a period of 50 years – is a crucial but complex basis for regulating international investment flows. Investment treaties are often thought to be silent on investors’ responsibilities to host societies and on their contributions to sustainable development. The present paper establishes a factual and statistical basis for understanding the relationship between investment treaty law and governments’ ability to advance the sustainable development agenda and promote responsible business conduct. The paper presents survey results of 2 107 investment treaties and 1 113 treaty-based arbitration cases in order to shed light on how (if at all) labour, environmental, human rights and anti-corruption considerations are referred to in investment treaties and investor-state arbitration cases based on them. Classification-JEL: F23; F53; K11; K33 Keywords: bribery, corruption, environmental law, investment treaties, investor state arbitration, ISDS, labour law Creation-Date: 2014-07-23 Number: 2014/1 Handle: RePEc:oec:dafaaa:2014/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Title: Investment Treaties and Shareholder Claims for Reflective Loss: Insights from Advanced Systems of Corporate Law Abstract: Corporate law in advanced domestic legal systems on the one hand, and typical treaties for the protection of foreign investment on the other hand, treat claims for damages by company shareholders differently. Advanced domestic systems generally bar shareholders from claiming for reflective loss – loss that arises from injury to "their" company (such as a decline in the value of shares). The claim for the loss belongs to the injured company and not to its shareholders. In contrast, shareholder claims for reflective loss have been widely permitted under typical investment treaties over the last 10 years. Ongoing OECD-hosted inter-governmental dialogue on investment law is considering whether there are policy reasons justifying the different approaches to shareholder claims for reflective loss. This paper examines shareholder claims for reflective loss under investment treaties in light of comparative analysis of advanced systems of corporate law. The paper considers the impact of allowing shareholder claims for reflective loss on key characteristics of the business corporation. The paper also explores possible responses by different categories of investors to the availability of shareholder claims for reflective loss under investment treaties. Classification-JEL: F21; F23; F53; F55; F63; G32; G34; G38; K23; K33; K41 Keywords: access to justice, agency costs, arbitrators, bilateral investment treaties, board of directors, business corporations, company law, comparative law, competitive neutrality, consistency, consistency of arbitral decisions, corporate law, creditors, creditors’ rights, derivative action, derivative injury, derivative loss, domestic impact of investment law, entity shielding, foreign investment, international arbitration, international economic law, international investment, international investment agreements, international investment law, investment arbitration, investment treaties, investor-state dispute settlement, judicial economy, level playing field, limited liability, loan covenant, reflective injury, reflective loss, separate legal personality, settlement, shareholder claims, shareholder remedies, shareholder rights, shareholders, stockholder remedies, stockholders, transferability of shares, treaty shopping Creation-Date: 2014-07-23 Number: 2014/2 Handle: RePEc:oec:dafaaa:2014/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Title: Investment Treaties and Shareholder Claims: Analysis of Treaty Practice Abstract: Advanced systems of domestic corporate law generally apply a “no reflective loss” principle to shareholder claims. Shareholder claims are permitted for direct injury to shareholder rights (such as voting rights). But shareholders generally cannot bring claims for reflective loss incurred as a result of injury to "their" company (such as loss in value of shares). Only the directly-injured company can claim. In contrast, shareholder claims for reflective loss have consistently been permitted under typical bilateral investment treaties (BITs) in recent years. This paper analyses investment treaty provisions relating to shareholder claims. It addresses (i) treaty regimes for shareholder recovery and company recovery of damages, including their consequences for investor protection and government liability; (ii) the interaction of reflective loss claims with treaty provisions that seek to limit multiple claims; and (iii) treaty provisions applicable to government objections to shareholder claims for reflective loss. Classification-JEL: F21; F23; F53; F55; F63; G32; G34; G38; K23; K33; K41 Keywords: access to justice, agency costs, arbitrators, bilateral investment treaties, business corporations, company law, comparative law, competitive neutrality, concurrent claims, consistency, consistency of arbitral decisions, corporate law, creditors, creditors’ rights, derivative action, derivative injury, derivative loss, domestic impact of investment law, foreign investment, international arbitration, international economic law, international investment, international investment agreements, international investment law, investment arbitration, investment treaties, investor-state dispute settlement, judicial economy, level playing field, overlapping claims, reflective injury, reflective loss, related claims, separate legal personality, settlement, shareholder claims, shareholder remedies, shareholder rights, shareholders, stockholder remedies, stockholders, treaty shopping Creation-Date: 2014-10-10 Number: 2014/3 Handle: RePEc:oec:dafaaa:2014/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: Yuri Shima Author-Workplace-Name: OECD Title: The Policy Landscape for International Investment by Government-controlled Investors: A Fact Finding Survey Abstract: Government-controlled investors, including state-owned enterprises and sovereign wealth funds, have greatly expanded their international activities in recent years. This paper describes the existing policy landscape of international investments by government-controlled investors under both national and international frameworks. The paper first examines host countries’ regulatory provisions dealing with inward investments by foreign government-controlled investors. The paper then documents international investment treaty practice in relation to government-controlled investors by examining, in particular, whether they are explicitly dealt with in investment treaties and, if so, how they are handled in the treaties. Finally, the paper presents other international agreements including the OECD instruments in relation to state ownership. Keywords: foreign government controlled investors, foreign government-controlled investors, foreign investment, foreign investment review, international investment, international investment agreements, international investment law, investment policy, investment treaties, sovereign wealth fund, state-controlled investors, state-owned enterprises Creation-Date: 2015-01-14 Number: 2015/1 Handle: RePEc:oec:dafaaa:2015/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Kathryn Gordon Author-Name: Joachim Pohl Author-Workplace-Name: OECD Title: Investment Treaties over Time - Treaty Practice and Interpretation in a Changing World Abstract: Investment treaty law reflects a permanent tension between stability and flexibility. Stability nurtures predictability, while flexibility helps legal systems stay in alignment with changing circumstances and evolving needs. This paper establishes an inventory of the mechanisms in investment treaty law that provide flexibility and surveys relevant treaty practice. The paper: analyses the drivers of change in investment treaty law; provides an inventory of countries’ options – and limits – to alter their positioning vis-à-vis investment treaty law through ‘exit’ and ‘voice’; and analyses treaty provisions on, and States’ use of, flexibility in investment treaty law. The paper finds that most treaties provide for little or no mechanism for countries to influence the use and interpretation of investment treaty law. The paper further finds that treaty provisions for ‘exit’ are likewise geared to provide stability rather than flexibility. Analysis of State practice presented in the paper shows that States rarely make use of the mechanisms available to them to influence treaty use and interpretation and that ‘exit’ from the system has likewise been rare so far. Classification-JEL: F21; F53; K33; N40; P45 Keywords: international investment agreements, international investment law, investment protection, investment treaties Creation-Date: 2015-01-16 Number: 2015/2 Handle: RePEc:oec:dafaaa:2015/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: Annamaria de Crescenzio Author-Workplace-Name: OECD Author-Name: Marta Golin Author-Workplace-Name: OECD Author-Name: Anne-Christelle Ott Title: Currency-based measures targeting banks - Balancing national regulation of risk and financial openness Abstract: This paper presents and analyses new datasets of de jure Currency-Based Measures (CBMs) directed at banks in a sample of 49 countries between 2005 and 2013. These measures are bank regulations that apply a discrimination−e.g. a less favourable treatment−on the basis of the currency of an operation, typically foreign currencies. The new data shows that CBMs have been increasingly used in the post-crisis period, including for macro-prudential purposes. In particular, some Emerging Market Economies, including some OECD countries, have increasingly resorted to and tightened their CBMs, especially to manage capital inflows. Information from these new datasets is also matched with measures on countries’ inability to borrow in domestic currency on international markets, defined as the original sin concept. With the exception of China, only countries suffering from original sin used and tightened CBMs on banks’ foreign exchange liabilities. Classification-JEL: C82; E58; F3; F38; F65; G28 Keywords: banking regulations, capital controls, capital flows, financial stability, foreign currency, macroprudential policy Creation-Date: 2015-12-10 Number: 2015/3 Handle: RePEc:oec:dafaaa:2015/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Title: The legal framework applicable to joint interpretive agreements of investment treaties Abstract: Governments have been examining the potential role of joint government interpretations of investment treaties at OECD-hosted intergovernmental investment roundtables. Now well-established in the model BITs and treaty practice of the NAFTA governments, express provisions for such joint interpretations have recently been included in an increasing range of treaties and investment policies around the world. But while a significant number of major recent treaties contain such express provisions, most investment treaties do not expressly address joint interpretations and thus leave the issue to more general rules. This paper addresses the general legal framework applicable to joint agreements by treaty parties about the interpretation of treaties. It outlines some key concepts and distinctions in treaty interpretation, and then considers the effects of treaty interpretations and amendments on third parties and in particular on investors covered by a treaty. Joint government interpretation can be binding or non-binding on investment arbitration tribunals. The paper concludes with brief consideration of possible criteria that could affect the persuasiveness of non-binding guidance. Classification-JEL: F02; F13; F21; F5; F53; G28; K23; K33; K41 Keywords: foreign investment, international investment, international investment agreements, international investment law, investment treaties Creation-Date: 2016-02-10 Number: 2016/1 Handle: RePEc:oec:dafaaa:2016/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Frédéric Wehrlé Author-Workplace-Name: OECD Author-Name: Joachim Pohl Author-Workplace-Name: OECD Title: Investment Policies Related to National Security: A Survey of Country Practices Abstract: While many countries have become ever more open and welcoming for foreign investment, the awareness of risks for national security stemming from or related to international investment has increased. Many governments have thus introduced policies that seek to protect their national security with the smallest possible impact on investment flows. Guidelines for recipient country investment policies relating to national security adopted at the OECD in 2009 provide recommendations for the design and implementation of such policies. This paper reviews commonalities and differences of policies implemented in 54 countries with a special focus on arrangements in 17 economies that have explicit policies in this area. It offers a comparative analysis of countries’ investment policy approaches to address national security concerns stemming from foreign investment; classifies the different forms of restrictions to address these concerns; identifies differences between restrictions on ownership and acquisitions; and presents how countries define the scope of application of their policies. The study also assesses how countries have implemented some of the key principles set out in the 2009 Guidelines in actual policy in order to meet their need to safeguard national security while reducing the impact of these policies on international investment. Classification-JEL: F52; F53 Keywords: CFIUS, international investment, national security Creation-Date: 2016-06-14 Number: 2016/2 Handle: RePEc:oec:dafaaa:2016/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Title: State-to-State dispute settlement and the interpretation of investment treaties Abstract: Many governments have expressed concerns about the uncertainty linked to the perceived inconsistency of treaty interpretation in Investor-State dispute settlement (ISDS). An OECD-hosted intergovernmental investment roundtable has been considering a range of tools through which governments can take action to improve the interpretation of investment treaties and some participants suggested consideration of the potential role of State-to-State dispute settlement (SSDS) in this area. This paper responds to this interest. The first part sets forth a rough typology of possible SSDS claims under investment treaties. The second part outlines policy issues relating to a possible type of SSDS claim which would be most relevant to the question of interpretation, for so-called “pure” interpretation of an investment treaty. The analysis seeks to identify policy reasons why governments might wish to provide for or exclude the power to obtain pure interpretations of investment treaties from SSDS tribunals or to make it broad or narrow. The final section examines SSDS cases under investment treaties addressing claims for interpretation. Classification-JEL: F02; F13; F21; F23; F53; K23; K33; K4; K41 Keywords: bilateral investment treaties, foreign investment, international arbitration, international economic law, international investment, international investment agreements, international investment law, investment treaties, investor-state dispute settlement Creation-Date: 2016-09-13 Number: 2016/3 Handle: RePEc:oec:dafaaa:2016/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: Adrian Blundell-Wignall Author-Name: Caroline Roulet Title: Foreign direct investment, corruption and the OECD Anti-Bribery Convention Abstract: This paper estimates a dynamic foreign direct investment (FDI) gravity model to explore the impact of corruption in general and the OECD Anti-Bribery Convention in particular. The evidence from previous studies in both domains is mixed, probably due to econometric inconsistencies and misuse of data. The more robust findings are that corruption has an insignificant or even positive effect on FDI in the general population. However, adherence to the OECD Anti-Bribery Convention has a clear negative impact on FDI—countries that adhere reduce investments in corrupt destinations. Classification-JEL: F21; F23 Keywords: corrumption, foreign direct investment, institutions, law Creation-Date: 2017-01-25 Number: 2017/1 Handle: RePEc:oec:dafaaa:2017/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Title: The balance between investor protection and the right to regulate in investment treaties: A scoping paper Abstract: There is vigorous debate about reforms to address the balance between investor protection and the right to regulate in the over 3000 existing investment treaties. This paper first notes the growing trend to analyse particular treaty rules rather than treaties as a whole and the importance of comparative analysis of balancing under other regimes. It then outlines issues in four areas: (i) the types of regulation potentially at issue in investment treaty claims by covered investors; (ii) the types and levels of investor protection; (iii) the degree of impact of treaties on regulation; and (iv) the processes and institutions that may be involved in balancing interests in investor protection and the right to regulate. While the paper recognises that dispute resolution institutions have a significant impact on the balance and the right to regulate, it focuses primarily on substantive issues in light of other ongoing work on dispute settlement. Classification-JEL: F02; F13; F23; F53; F60; H11; H40; K23; K29; K33; K4 Keywords: bilateral investment treaties, investment treaties, investor protection, policy space, regulatory autonomy, right to regulate Creation-Date: 2017-02-24 Number: 2017/2 Handle: RePEc:oec:dafaaa:2017/2-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Title: Addressing the balance of interests in investment treaties: The limitation of fair and equitable treatment provisions to the minimum standard of treatment under customary international law Abstract: The fair and equitable treatment (FET) provision has leapt to prominence in the last 15 years as the principal ground of liability at issue in many if not most investment treaty arbitration claims. In debates about the impact of investment treaties on the right to regulate, FET is second only to investor-state dispute settlement (ISDS) as the most-cited provision. This paper examines government action to address the balance between investor protection and the right to regulate by limiting fair and equitable treatment provisions to the minimum standard of treatment under customary international law (MST-FET). The paper reviews the distinction between MST-FET clauses and autonomous FET clauses, and notes growing use of an express MST-FET approach in many regions. NAFTA governments’ views about the nature of the MST-FET standard, how it is identified, and its content are then examined in detail. An initial focus on NAFTA, while limited, is justified due to many singularities in NAFTA, including numerous government interpretations of MST-FET since 1994, their availability to the public and the comparatively higher success rate of NAFTA governments in defending FET claims. The paper concludes with brief comparisons between the government views and the views of ISDS tribunals and commentators. Classification-JEL: F02; F13; F21; F23; F53; F60; H11; H40; K23; K29; K33; K4 Keywords: bilateral investment treaties, customary international law, fair and equitable treatment, investment treaties, investor protection Creation-Date: 2017-02-24 Number: 2017/3 Handle: RePEc:oec:dafaaa:2017/3-EN Template-type: ReDIF-Paper 1.0 Author-Name: Annamaria de Crescenzio Author-Workplace-Name: OECD Author-Name: Marta Golin Author-Workplace-Name: University of Oxford Author-Name: Francesco Molteni Author-Workplace-Name: European University Institute Title: Have currency-based capital flow management measures curbed international banking flows? Abstract: This paper analyses the impact of a specific type of banking regulation on operations in foreign currency, defined as currency-based capital flow management measures (CB-CFMs), on cross-border banking flows in a sample of 18 countries over the period 2005 to 2013. The results show that the introduction and tightening of these measures in the post-crisis period contributed to a reduction of the external debt of banks, controlling for capital flow management measures, domestic macro-prudential regulation, and a large set of push and pull factors. The examination of external debt by maturity and instruments suggests that these measures are more effective in curbing short-term debt and interbank borrowing, which are also the components that contracted more sharply in the aftermath of the 2008 crisis. Further analysis could look at the benefits these measures bring in terms of financial stability, and evaluate the costs of capital account openness against the risks that CB-CFMs aim to address. Classification-JEL: E58; F3; F38; G28 Keywords: banking debt, capital flow management measures, currency-based measures, external debt, macro-prudential policies Creation-Date: 2017-09-14 Number: 2017/4 Handle: RePEc:oec:dafaaa:2017/4-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Title: Adjudicator Compensation Systems and Investor-State Dispute Settlement Abstract: Compensation for adjudicators is generally considered as a core issue for judicial independence and for attracting good judges in the institutional design for courts. This paper examines compensation systems for adjudicators and dispute settlement administrators in investor-state dispute settlement (ISDS). The paper uses in part a comparative perspective based on approaches in domestic courts in advanced economies, an approach rarely taken in analysing investor-state arbitration.The first section of the paper provides historical context and examines the reform of remuneration of judges to replace private litigant fees with salaries in colonial America and the United States, France and England in the 18th and early 19th centuries. Subsequent sections address debates over the impact of compensation systems on adjudicators; contemporary approaches to the compensation of judges in advanced economies; the co-existence in advanced economies of national courts with salaried judges since the early 19th century with generally strong support for commercial arbitration based on ad hoc fee-based remuneration; and similarities and differences between commercial arbitration and investment arbitration, focusing how the largely similar compensation systems may have different effects and be differently perceived by the public.Annexes to the paper report on discussions about adjudicator compensation at the 2016 OECD Investment Treaty Conference and gather some preliminary facts about adjudicator and dispute administrator compensation in investor-state arbitration as well as the investment court system included in the recent EU-Canada CETA trade and investment agreement. Classification-JEL: H4; J3; J33; J44; K23; K33; K41; L33; N20; N4 Keywords: Alexander Hamilton, arbitrator compensation, bilateral investment treaties, comparative law, conflicts of interest, court fees, dispute settlement, domestic courts, economic incentives, foreign investment, international commercial arbitration, international economic law, international investment, international investment agreements, international investment law, investment arbitration, investment treaties, investment treaty policy, investor protection, investor-state dispute settlement, ISDS, Jeremy Bentham, judicial compensation, legal history, litigant fees, Voltaire Creation-Date: 2017-11-24 Number: 2017/5 Handle: RePEc:oec:dafaaa:2017/5-EN Template-type: ReDIF-Paper 1.0 Author-Name: Joachim Pohl Title: Societal benefits and costs of International Investment Agreements: A critical review of aspects and available empirical evidence Abstract: This paper reviews alleged societal benefits and costs of International Investment Agreements (IIAs) as suggested by academia, governments, business and civil society. It sets out the wide range of issues that diverse actors have proposed in the context of assessing the societal benefits and costs of IIAs. The paper analyses and organises the available material generated by these sources to identify and classify the many different issues, summarises available empirical evidence and findings in these sources on the individual aspects, and assesses strengths and weaknesses of the approaches. The paper focuses in particular on the investor protection component of IIAs. The inventory finds that for many claims about the positive or negative impact of IIAs, little robust evidence has been generated to date. The paper highlights methodological challenges and suggests areas where further study would be required to draw firmer conclusions. Classification-JEL: D02; D61; F02; F21; F23; F53; F55; F60; K33; N40; O12; P45; P48 Keywords: bilateral investment treaties, cost-benefit analysis, foreign investment, international investment, international investment law, investment protection, investment treaties, regulatory impact assessments Creation-Date: 2018-01-19 Number: 2018/1 Handle: RePEc:oec:dafaaa:2018/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Acquisition- and ownership related policies to safeguard essential security interests Abstract: This paper summarises current and emerging trends in aquisition- and ownership-related policies to safeguard essential security interests . Its main purpose is to identify the contours of the class of policies that address acquisition- and ownership-related risk, retrace the overall trends and evolution of these policies, position acquisition- and ownership-related policies in relation to adjacent areas, highlight challenges that policy design and implementation meet, and set out how reforms and future initiatives could help respond to these challenges. Creation-Date: 2019-03-12 Number: 2019/1 Handle: RePEc:oec:dafaaa:2019/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Fernando Mistura Author-Workplace-Name: OECD Author-Name: Caroline Roulet Author-Workplace-Name: OECD Title: The determinants of Foreign Direct Investment: Do statutory restrictions matter? Abstract: Over the past two decades, governments worldwide have continued to liberalise restrictions on international investment with only occasional relapses. Yet, FDI liberalisation remains an unfinished agenda in various parts of the world and across sectors. This paper sheds light on their potential costs in terms of foregone investments. Applying an augmented gravity model, covering 60 advanced and emerging countries over the period 1997–2016, it estimates the elasticity of bilateral FDI positions and cross-border M&A activity to FDI restrictions as measured by the OECD FDI Regulatory Restrictiveness Index. Results suggest that reforms liberalising FDI restrictions by about 10% as measured by the Index could increase bilateral FDI in stocks by 2.1% on average. Effects are greater for FDI in the services sector, but even manufacturing sectors – which are typically open to FDI – are negatively affected by countries’ overall restrictiveness. Foreign equity limitations and FDI screening policies are also scrutinised. Classification-JEL: F15; F21; K20 Creation-Date: 2019-03-01 Number: 2019/01 Handle: RePEc:oec:dafaaa:2019/01-EN Template-type: ReDIF-Paper 1.0 Author-Name: Etienne Lepers Author-Name: Caroline Mehigan Title: The broad policy toolkit for financial stability: Foundations, fences, and fire doors Abstract: The post financial crisis period has been associated with increased countercyclical use of various financial policies, including residency-based measures. This paper analyses in a single analytical framework the relative effectiveness of three types of financial policies – macroprudential (foundations), currency-based (fences), and residency-based measures (fire doors). The findings in this paper are based on a granular quarterly database of adjustments in these policies that covers both advanced and emerging economies from 2000 to 2015. The results show that residency-based measures on bonds and credit reduce capital inflows but provide limited support for a credit-mitigation role. While no evidence emerges that macroprudential measures alter capital inflows, most appear effective in reducing credit growth. Currency-based measures may reduce both inflows and credit growth (particularly FX reserve requirements and FX lending regulations). These results indicate that the impact of policies needs to be analysed at a granular level and that policy makers should adopt an integrated view of the financial policy toolkit. Classification-JEL: E58; F32; F34; F38; G15; G21; G28 Creation-Date: 2019-07-04 Number: 2019/02 Handle: RePEc:oec:dafaaa:2019/02-EN Template-type: ReDIF-Paper 1.0 Author-Name: Maria Borga Author-Workplace-Name: OECD Author-Name: Perla Ibarlucea Flores Author-Workplace-Name: OECD Author-Name: Monika Sztajerowska Author-Workplace-Name: OECD Title: Drivers of divestment decisions of multinational enterprises - A cross-country firm-level perspective Abstract: Divestment by multinational enterprises is an important yet understudied phenomenon. The few available estimates indicate that about a fifth of all foreign affiliates are divested every five years. This paper presents the findings from a novel cross-country firm-level dataset with financial and ownership information for over 62 000 foreign-owned affiliates from a selection of 41 OECD and G20 countries and their economic groups from 164 home countries for the period 2007-2014. The data allow an assessment of the relative importance of different determinants of divestment in a cross-country setting, including host country policies and bilateral factors, including trade, investment and tax agreements. The findings confirm that parents divested about one of every five foreign-owned affiliates between 2007-2014 and show that a number of host country policy and economic factors, including labour costs and international trade agreements, influence the divestment decision, on top of the firm considerations considered in previous studies. Classification-JEL: F13; F14; F15; F23; F53 Keywords: Bilateral Investment Treaties, Divestment, Double Taxation Agreements, International Investment, Multinational Firms, Preferential Trade Agreements Creation-Date: 2020-01-15 Number: 2019/03 Handle: RePEc:oec:dafaaa:2019/03-EN Template-type: ReDIF-Paper 1.0 Author-Name: Andrea Marín Odio Author-Workplace-Name: OECD Title: The most favoured nation and non-discrimination provisions in international trade law and the OECD codes of liberalisation Abstract: Increasing moves away from multilateralism have created a fragmented trade and investment scenario where economies progressively combine the application of restrictive unilateral actions with bilateral and regional preferences. The application of, and exceptions to, the non-discrimination provisions are a fundamental element of these trends.This paper sheds light on the two types of non-discrimination provisions considered the founding stones of the multilateral system: the most favoured nation (MFN) clause - as developed under the GATT and GATS - and the non-discrimination clause among countries adhering to the OECD Codes of Liberalisation.While not taking a position on the complex question of whether a multilateral, plurilateral or bilateral approach to trade and investment liberalisation should be pursued, the paper illustrates the OECD has upheld the non-discrimination obligation as one of its basic principles, dating back to its origins over 60 years ago. Classification-JEL: B17; B27; F13; F15; F42; F51; F53; F55; F60; K33 Keywords: Codes of Liberalisation, international trade law, MFN, most favoured nation, multilateralism, non-discrimination, regional integration, WTO Creation-Date: 2020-02-10 Number: 2020/01 Handle: RePEc:oec:dafaaa:2020/01-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Acquisition- and ownership-related policies to safeguard essential security interests: Current and emerging trends, observed designs, and policy practice in 62 economies Abstract: This report presents a comprehensive and up-to-date overview of the policies to manage acquisition- and ownershiprelated risk to essential security interests in 62 economies. Creation-Date: 2020-05-15 Number: 2020/1 Handle: RePEc:oec:dafaaa:2020/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Transparency, Predictability and Accountability for investment screening mechanisms Abstract: This paper covers policy-practice and design in areas related to transparency, predicatability and accountability for investment screening mechanisms. Creation-Date: 2021-05-27 Number: 2021/1 Handle: RePEc:oec:dafaaa:2021/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Annamaria de Crescenzio Author-Workplace-Name: OECD Author-Name: Etienne Lepers Author-Workplace-Name: OECD Author-Name: Zoe Fannon Author-Workplace-Name: University of Oxford Title: Assessing the effectiveness of currency-differentiated tools: The case of reserve requirements Abstract: This paper provides the first comprehensive analysis of benefits and side-effects of foreign-currency differentiated reserve requirements for a sample of 58 countries from 1999 to 2015. Departing from the existing literature on effectiveness which used binary variables to measure policy changes, the intensity of reserve requirement adjustments is captured by using the gap between foreign and local currency rates to isolate the impact of differentiation net of volume effects.The findings show that increasing the gap between FX and local currency-denominated reserve requirements is generally effective in reducing currency mismatch and dollarisation in banks’ balance sheets, notably through a reduction in the share of banks’ FX liabilities to total liabilities and in banks’ net FX positions. The findings also show that a higher gap is associated with a broader reduction in capital inflows, in particular portfolio debt inflows and flows to non-banks. Little evidence of domestic or international circumvention, with risks shifting to other sectors or countries is visible. Classification-JEL: E58; F3; F38; G28 Keywords: banking regulation, differentiated reserve requirement, dollarisation, macro-prudential policies, Creation-Date: 2021-01-20 Number: 2021/01 Handle: RePEc:oec:dafaaa:2021/01-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Title: Business responsibilities and investment treaties Abstract: Investment treaty policy increasingly interacts with business responsibilities. This scoping paper first surveys the converging approaches to responsible business conduct (RBC) and business and human rights (BHR) as reflected in the OECD Guidelines for Multinational Enterprises, the United Nations Guiding Principles on Business and Human Rights and core ILO standards. Legislative developments and court cases are examined. The paper focuses primarily on government action as part of a flexible “smart mix” to address RBC and maximise the positive contribution of business to sustainable development, but also examines some business and civil society action.Three aspects of trade and investment treaty interaction with business responsibilities are considered: treaty impact on policy space for governments including for the non-discriminatory regulation of business; treaty provisions that buttress domestic environmental, labour or other law; and provisions that speak directly to business by, for example, encouraging RBC or establishing conditions for access to investment treaty benefits. Classification-JEL: F13; F21; F23; F60; K23; K29; K32; K33; K38; M14 Keywords: bilateral investment treaties, business and human rights, environmental law, human rights, investment treaties, investment treaty policy, investor-state dispute settlement, policy space, regulatory autonomy, responsible business conduct, right to regulate, sustainable development Creation-Date: 2021-05-04 Number: 2021/02 Handle: RePEc:oec:dafaaa:2021/02-EN Template-type: ReDIF-Paper 1.0 Author-Name: David Gaukrodger Author-Workplace-Name: OECD Title: The future of investment treaties - possible directions Abstract: As our societies face new challenges and make new demands from policies addressing international investment, there is a new urgency to profoundly reconsider treaties addressing investment. This paper was prepared originally as background for initial inter-governmental and public discussions at the OECD about future investment treaties as well as possible alternatives. The paper surveys potential roles for treaties addressing investment in (i) contributing to sustainable development and responsible business conduct; (ii) preserving and improving investment market access and liberalisation of investment, and facilitating FDI; (iii) regulating subsidised state-owned enterprises, competition in subsidies for investment, and digitalisation; and (iv) addressing the interests of treaty-covered and other investors in reasonable legal predictability and a level playing field, together with the need for policy space and public support for treaty policy. It considers potential use of more flexible and varied remedies and implementation mechanisms. A final section briefly considers treaty policies as governments and societies confront the urgent challenge of climate change. Classification-JEL: F18; F13; F21; F23; F53; F60; K23; K32; K33; K40 Keywords: environmental law, human rights, labour law, responsible business conduct, sustainable development Creation-Date: 2021-06-28 Number: 2021/03 Handle: RePEc:oec:dafaaa:2021/03-EN Template-type: ReDIF-Paper 1.0 Author-Name: Etienne Lepers Author-Workplace-Name: OECD Author-Name: Rogelio Mercado Author-Workplace-Name: Asian Development Bank Title: Analysing sectoral capital flows: Covariates, co-movements, and controls Abstract: This paper assembles a comprehensive sectoral capital flows dataset for 64 advanced and emerging economies from 2000-18. This includes direct, portfolio and other investments to and from five sectors: central banks (CB), general government (GG), banks (BKs), non-financial corporates (NFCs) and other financial corporates (OFCs) and a corresponding dataset on capital controls imposed on these sectors. The paper uses this data to examine the usefulness of a sectoral approach in assessing capital flow covariates, co-movements, and the effectiveness of capital controls. The findings show that: 1) private sectoral flows have varying sensitivities to global financial conditions and different cyclicality with respect to output growth. For instance, unlike other flows, NFCs respond to global commodity prices but not global risk aversion and, unlike banks, OFCs cut foreign investment in periods of domestic investment; 2) co-movements of resident and non-resident OFC sectoral flows add to the observed positive correlation between gross inflows and outflows; and, 3) the tightening of capital controls on NFCs and OFCs appear effective in reducing the volume of flows to these sectors. Classification-JEL: F21; F38; F41; G20 Keywords: capital controls, capital flows correlations, sectoral capital flows Creation-Date: 2021-07-02 Number: 2021/04 Handle: RePEc:oec:dafaaa:2021/04-EN Template-type: ReDIF-Paper 1.0 Author-Name: Annamaria de Crescenzio Author-Name: Etienne Lepers Title: Extreme capital flow episodes from the Global Financial Crisis to COVID-19: An exploration with monthly data Abstract: The COVID-19 pandemic triggered a sudden funding squeeze manifested in major disruptions in international capital flows, the most dramatic of the wave of extreme capital flow episodes since the global financial crisis (GFC). This paper contributes to efforts to better understand this extreme episode in the context of post-GFC structural financial changes. To do so, it presents a new monthly dataset of gross capital flows for 41 countries, better suited to the identification of sudden shocks than quarterly Balance of Payments data. Leveraging on this dataset, the paper first develops a more precise identification of extreme capital flow episodes since the GFC and revisit their drivers, asking whether COVID-19 episode significantly changed recent findings of the weaker role of global factors. The answer is no. Rather, the role of global factors may have further lost explanatory power in the post-GFC period including COVID. On the other hand, pull factors such as pre-COVID vulnerabilities and country-specific and pandemic-specific factors appear key to explaining the identified cross-country heterogeneity. Classification-JEL: F32; F34; F38 Creation-Date: 2021-07-26 Number: 2021/05 Handle: RePEc:oec:dafaaa:2021/05-EN Template-type: ReDIF-Paper 1.0 Author-Name: Alessandra Celani Author-Workplace-Name: OECD Author-Name: Luisa Dressler Author-Workplace-Name: OECD Author-Name: Martin Wermelinger Author-Workplace-Name: OECD Title: Building an Investment Tax Incentives database: Methodology and initial findings for 36 developing countries Abstract: The OECD has constructed an Investment Tax Incentives database which compiles granular details on corporate income tax (CIT) incentives for investment. This paper presents the methodology used to develop the database and insights from an initial data collection in 36 developing countries. The paper describes a classification to structure quantitative and qualitative information on investment tax incentives across three dimensions: design features, eligibility conditions and their legal basis. The data reveal that tax exemptions are the most widely used CIT instrument across the 36 countries and identifies notable differences between the incentives used within and outside of Special Economic Zones (SEZs). In 80% of countries covered, at least one tax incentive supports an area related to the Sustainable Development Goals. Classification-JEL: H25; F21; C80 Creation-Date: 2022-02-24 Number: 2022/01 Handle: RePEc:oec:dafaaa:2022/01-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: The interaction between most-favoured-nation clauses and dispute settlement arrangements in investment treaties Abstract: This paper outlines and analyses the evolution of the manner in which investment treaties have dealt with the question of importing dispute settlement arrangements from third-party treaties. Creation-Date: 2022-11-30 Number: 2022/1 Handle: RePEc:oec:dafaaa:2022/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Polina Knutsson Author-Name: Perla Ibarlucea Flores Title: Trends, investor types and drivers of renewable energy FDI Abstract: As foreign direct investment (FDI) can help mitigate the repercussions of climate change, understanding what factors attract energy FDI is important. A large share of energy FDI originated from outside the energy sector, and given that renewable power FDI also comes from outside the energy sector, it is worthwhile to examine if drivers behind this type of FDI differ from what encourages investment by firms operating within the energy sector. This paper demonstrates that renewable energy FDI has been increasing, while FDI in fossil fuels is potentially slowing down. Results of the empirical analysis show that both the broader investment conditions and the strength of climate policies are vital for ensuring the favourable environment for renewable energy FDI, but the extent to which these factors impact investment decisions varies depending on where the investors come from: greenfield investors from outside the energy sector seem less responsive to the climate mitigation policies of host countries, whereas their location choices are tightly linked to the broader investment conditions in the destination economies. Keywords: energy FDI, energy sector Creation-Date: 2022-11-25 Number: 2022/02 Handle: RePEc:oec:dafaaa:2022/02-EN Template-type: ReDIF-Paper 1.0 Author-Name: Monika Sztajerowska Title: Supply-chain disruptions and new investment policies in the post-COVID-19 world: Initial insights from project-level data Abstract: The COVID 19 pandemic has inflicted a series of shocks on the global economy, not least impacting global trade and investment. During the same time, several countries adopted new foreign direct investment (FDI) related policies. This paper presents novel preliminary evidence on the effects of these new FDI policies and COVID-19-related supply-chain disruptions on cross-border investment. It employs, among others, granular data on FDI policies and investment projects undertaken in a wide range of sectors in 175 host economies worldwide by investors from 46 home countries. It finds that a combination of FDI policies and COVID-19-related measures has a statistically significant and economically meaningful negative effect on the probability of a new cross-border greenfield investment project occurring during the sample period. The effect is the strongest in sectors with high R&D intensity. Classification-JEL: F15; F21; F23; F52 Keywords: COVID-19, de-globalisation, FDI, Foreign direct investment, greenfield, supply chains Creation-Date: 2023-07-31 Number: 2023/01 Handle: RePEc:oec:dafaaa:2023/01-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: ‘Fair’ and ‘equitable’ treatment provisions in investment treaties: A large-sample survey of treaty provisions Abstract: ‘Fair’ and ‘equitable’ treatment provisions in investment treaties Creation-Date: 2023-04-12 Number: 2023/1 Handle: RePEc:oec:dafaaa:2023/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: OECD Title: Cross-border investment into low-carbon infrastructure: An empirical glance Abstract: This working paper provides a granular overview of investments into low-carbon infrastructure, both in the real economy and financial market. The descriptive analysis shows that there is room to scale up cross-border infrastructure investment and to shift investment into low-carbon assets. Specifically, low-carbon cross-border investment can be increased by shifting infrastructure investments, that currently flow into the financial economy, to the real economy and by incentivising the use of financing instruments, i.e., securitised products, that bundle projects and meet different liquidity tastes of investors. The analysis also highlights the important role of foreign direct investment (FDI) into infrastructure from foreign real economy companies. Classification-JEL: F21; Q56; H54 Keywords: Infrastructure, investment Creation-Date: 2024-03-04 Number: 2024/1 Handle: RePEc:oec:dafaaa:2024/1-EN Template-type: ReDIF-Paper 1.0 Author-Name: Etienne Lepers Author-Name: Annamaria de Crescenzio Author-Workplace-Name: OECD Title: What drives capital to green companies in emerging markets: Evidence from investment funds Abstract: This paper investigates the role of investment funds in financing green companies in emerging markets (EMs) and the factors influencing these allocations. Despite a global surge in “sustainable” investing, companies involved in carbon solutions, particularly in EMs, make up a small portion of reported sustainable investments. Using fund- and asset-level analyses on a detailed portfolio-level dataset of the 37 000 largest investment funds globally, this paper identifies key characteristics driving green investments, such as younger funds, retail investor funds, funds with domestic mandates and sustainable funds which are more inclined to invest in green companies and less in fossil fuels. Inclusion of EM green companies in benchmarks and diversified ownership in listed firms enhance green investments. Greater green allocation in EMs is linked to higher portfolio flow openness and economic freedom and are also influenced by climate-related factors such as exports in renewable manufacturing. Classification-JEL: F30; F65; G11; G15; G23; Q54; Q56 Creation-Date: 2024-12-19 Number: 2024/02 Handle: RePEc:oec:dafaaa:2024/02-EN