Evolving Approach to Investment Treaties in ASEAN
Sufian Jusoh
Jakarta 10.12.2014
AEC Workshop - Brisbane 19 May 2014 1
Evolution
BITFTA
Positive List
FTA Negative
List
ASEAN IGA
AIA ACIA
6
21
63
23
67
6
35
40 40
60
20 1 0
4
0 1
14
7
23 3 3 3 3 3 3 3 3 3
0
7 7 7
4 4 5 46
8
0
10
20
30
40
50
60
70
80
Brunei Cambodia Indonesia Lao PDR Malaysia Myanmar ThePhilippines
Singapore Thailand Vietnam
BIT
FTA
ASEAN FTA
BIT with AMS
3
Key Features of Bilateral Investment Treaties
Direct action by investors v. states
Minimum standard of Protections
Clear ForumDirect
Enforcement
BIT
4
ASEAN IGA
• Protection and Promotion
• Investor-State Dispute Settlement Mechanism
AIA Agreement
• Schedules (I. Facilitation, II. Promotion, III. Liberalisation), Temporary Exclusion List 5 Sectors; Sensitive List 5 Sectors
• Protocol: Temporary Exclusion List for 5 services; Sensitive Lists for services incidental to 5 sectors.
ACIA• Four Pillars, Liberalisation, 2 Annexes: Approval in writing, Expropriation and
compensation, ISDS
• Schedule: Reservation Lists
5
Came into force on 29 March
2012.
to enhance the flow of cross-border
investment and to promote the freer
flow of capital.
Measures adopted or maintained by an AMS in
relation to: any investment in that AMS
by an investor of a different AMS on or after
29 March 2012
6
ACIA
Protection
Facilitation
Promotion
Liberalisation
7
3rd country national through
juridical person in AMS
Juridical person in
AMS
Natural person of
AMS
8
9
Manufacturing Agriculture Fishery ForestryMining and Quarrying
10
National Treatment
Most -Favoured-Nation Treatment at pre and post-establishment
Senior Management and Boards of Directors
Freedom to operate without any performance requirement
More transparent,
consistent and predictable investment
rules, regulations, policies and procedures;
Harmonised investment
policies;
Streamlined and simplified procedures for
investment applications
and approvals; and
Dissemination of investment information,
rules, regulations, policies and procedures.
11
Main Protections
12
Fair & Equitable Treatment
Full Protection
and Security
No Unlawful
Expropriation
Free Transfer of
Funds
13
Alternative Dispute
Resolutions
Mediation
Conciliation
Consultation & Negotiation
Domestic Courts
Domestic Courts
Domestic Tribunals
Arbitration
ICSID
UNCITRAL
Other Agreed Rules
Protocol to ACIA: Annex 3- Procedures for Amendment or Modification of Reservation
Reduction or elimination
Modification within 12 months of entry into
force
Modification or withdrawal after the 12
months of entry into force
Procedures for “Member States who
consider interest affected”: consultation
and negotiations .
Major Policy Considerations in Negative List Approach
Standstill Roll Back
Ratchet
Evolved Role of ACIA
ASEAN Wide Investment Agreement
Benchmarked for National Level
Investment Law
ACIA and other ASEAN FTAsACIA ACFTA AKFTA AANZFTA
Application To investment establishment
Before and after the agreement. Include China Customs Territory
to investment after coming into force
National Treatment
admission, establishment, acquisition, expansion, management, conduct of operation, sale and disposition of investment
management, conduct of operation, maintenance, use, sale, liquidation
Same as in ACIA
Subject to work program. establishment, acquisition, expansion, management, conduct, operation, liquidation, sale, transfer, other disposition of investment
Most-Favoured NationACIA ACFTA AANZFTA AKFTA
In like circumstances No automatic
MFN, Subject to
Work Program
In like
circumstances
to member states in
relation treatment
accorded to a
member state and
non-member state
to parties or third
country
To parties or
third country
admission, establishment, acquisition,
expansion, management, conduct, operation
and sale or other disposition of investments.
ACFTA include maintenance, use, liquidation
Same as ACIA
MFN ExclusionACIA ACFTA AKFTA
benefit resulting from any
sub-regional arrangements
any PT under any existing bilateral, regional and/or
international agreements or to non-parties
existing or future PT in any agreement or
arrangement between or among ASEAN Member
States. ACFTA includes between party and its
customs territories
A party may request MFN accorded under any future
agreements or arrangements between a Party and
non-Party, AKFTA includes the party is not obliged to
grant MFN but provide an adequate opportunity to
negotiate the benefits. ACFTA also includes
negotiated MFN
Denial of Benefits
ACIA ACFTA AANZFTA AKFTA
juridical person who is
controlled by a non-AMS
person and has no
substantive business persons
in the country where it is
established
To juridical person who is
controlled by a non Party and
has no substantive business
persons in the country where it
is established
Where the non-AMS person
comes from a country that
has no diplomatic relations
with the host AMS
ProtectionsInvestment Topic ACIA ACFTA AANZFTA AKFTA
FET and protection of
security
Applicable
Compensation for
Losses in cases if strife
applicable Not applicable Applicable Not
applicable
Transfers Applicable
Expropriation and
compensation
Applicable
ISDS Applicable
Thanks You