iv) payments made pursuant to Article 8; and
v) payments arising under any dispute settlement process.
(B) Each Party shall permit transfers to be made in a freely usable currency at the market rate of exchange prevailing on the date of transfer with respect to spot transactions in the currency to be transferred.
(C) Notwithstanding Paragraphs (A) and (B), a Party may prevent a transfer through the equitable, non- discriminatory and good faith application of its laws relating to:
i) bankruptcy, insolvency or the protection of the rights of creditors; ii) issuing, trading or dealing in securities;
iii) criminal or penal offenses;
iv) reports of transfers of currency or other monetary instruments; or v) ensuring the satisfaction of judgments in adjudicatory proceedings.
(D) Notwithstanding Paragraph (B), a Party may restrict transfers or returns in kind in circumstances where it could otherwise restrict such transfers under this Agreement.
IISD Model International Agreement on Investment for Sustainable Development 8
<b>Part 3: Obligations and Duties of Investors and Investments </b>
<b>PART 3: OBLIGATIONS AND DUTIES OF INVESTORS AND INVESTMENTS </b>
Article 11. General Obligations
(A) Investments are subject to the laws and regulations of the host state.
(B) Investors and investments must comply with the host state measures prescribing the formalities of establishing an investment, and accept host state jurisdiction with respect to the investment.
(C) Investors and investments shall strive, through their management policies and practices, to contribute to the development objectives of the host states and the local levels of government where the investment is located.
(D) An investor shall provide such information to a potential host State Party as that Party may require con- cerning the investment in question for purposes of decision-making in relation to that investment or solely for statistical purposes. The Party shall protect any confidential business information from any dis- closure that would prejudice the competitive position of the investor or the investment. Nothing in this Paragraph shall be construed to prevent a Party from otherwise obtaining or disclosing information in connection with the equitable and good faith application of its domestic law.
Article 12. Pre-establishment Impact Assessment
A) Investors or the investment shall comply with environmental assessment screening criteria!? and assessment processes applicable to their proposed investments prior to their establishment, as required by the laws of the host state for such an investment or the laws of the home state for such an invest- ment, whichever is more rigorous in relation to the investment in question. On all occasions, the investor or investment shall comply with the minimum standards on environmental impact assessment and screening that the Parties shall adopt at the first meeting of the Parties, to the extent these are applicable to the investment in question.
(B) Investors or the investment shall conduct a social impact assessment of the potential investment. The Parties shall adopt standards for this purpose at the first meeting of the Conference of the Parties.
(C) Investors or the investment shall make the environmental and social impact assessments public and accessible in the local community and to affected interests in the host state where the investment is intended to be made prior to the completion of the host state measures prescribing the formalities for establishing an investment.
(D) Investors, their investment and host state authorities shall apply the precautionary principle to their environmental impact assessment and to decisions taken in relation to a proposed investment, includ- ing any necessary mitigating or alternative approaches to the investment, or precluding the investment if necessary.'1 The application of the precautionary principle by investors and investments shall be described in the environmental impact assessment they undertake.
10 Screening criteria include issues related to the size of an enterprise, its inputs and its outputs, each of which impact the scope of an assessment that may be required. These will normally exempt small enterprises and many service-related enterprises from the appli- cation of any assessment process. By contrast, resource-related projects will rarely be exempted.
11 The precautionary principle is defined in Article 15 of the Rio Declaration on Environment and Development as follows: âIn order to protect the environment, the precautionary approach shall be widely applied by States according to their capabilities. Where there are threats of serious or irreversible damage, lack of full scientific certainty shall not be used as a reason for postponing cost- effective measures to prevent environmental degradation.â
IISD Model International Agreement on Investment for Sustainable Development 9
<b>Part 3: Obligations and Duties of Investors and Investments </b>
Article 13. Anti-corruption
<b>(A) </b>
<b>() </b>
Investors and their investments shall not, prior to the establishment of an investment or afterwards, offer, promise or give any undue pecuniary or other advantage, whether directly or through interme- diaries, to a public official of the host state, for that official or for a third party, in order that the offi- cial or third party act or refrain from acting in relation to the performance of official duties, in order to achieve any favour in relation to a proposed investment or any licences, permits, contracts or other rights in relation to an investment.
Investors and their investments shall not be complicit in any act described in Paragraph (A), including incitement, aiding and abetting, and conspiracy to commit or authorization of such acts.
Article 14. Post-establishment Obligations
<b>(A) </b>
Investments shall, in keeping with good practice requirements relating to the size and nature of the investment, maintain an environmental management system. Companies with over [250][500] employ- ees, or in areas of resource exploitation or high-risk industrial enterprises shall maintain a current cer- tification to ISO 14001 or an equivalent environmental management standard. Emergency response and decommissioning plans shall be included in the environmental management system process. !2
Investors and investments should uphold human rights in the workplace and in the state and commu- nity in which they are located. Investors shall not undertake or cause to be undertaken, acts that breach such human rights. Investors and investments shall not by complicit with, or assist in, the violation of the human rights by others in the host state, including public authorities or during civil strife. The Parties shall, at their first meeting, adopt a list of international human rights and human rights instru- ments to assist investors in complying with this Provision.
Investors and investments shall act in accordance with core labour standards as required by the ILO Declaration on Fundamental Principles and Rights of Work, 1998.13
Investors and investments shall not manage or operate the investments in a manner that circumvents inter- national environmental,'4 labour and human rights obligations to which the host state and/or home state are Parties.
12
13
14
The ability to maintain a current certification may be hampered by lack of qualified certification bodies in some regions. This may be seen as a temporary problem when alternatives are being pursued in good faith by an investment.
These core labour standards are further elaborated, in accordance with the Declaration, in ILO Conventions concerning free- dom of association, the elimination of forced labour, the abolition of child labour and the elimination of discrimination in the work place.
Several international environmental agreements have differentiated obligations. Circumvention of an agreement does not occur when the differentiated obligations of the host state under an agreement are not breached.
Article 15. Corporate Governance and Practices
In accordance with the size and nature of an investment,
<b>(A) </b>
<b>() </b>
Investments shall meet or exceed national and internationally accepted standards of corporate gover- nance for the sector involved, in particular for transparency and accounting practices.
Investors and investments shall make available to the public any investment contract or agreement with the host state government(s) involved in the investment authorization process, subject to the redaction of confidential business information. Investors or investments shall publish all information relating to payments made to host state public authorities, including taxes, royalties, surcharges, fees and all other payments.
Investments shall establish and maintain, where appropriate, local community liaison processes, in accordance with internationally accepted standards when available.
Where relevant internationally accepted standards of the type described in this Article are not available or have been developed without the participation of developing countries, the Conference of the Parties may establish such standards.
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<b>Part 3: Obligations and Duties of Investors and Investments </b>
Article 16. Corporate Social Responsibility
<b>(A) </b>
<b>) </b>
In addition to the obligation to comply with all applicable laws and regulations of the host state and the obligations in this Agreement, and in accordance with the size, capacities and nature of an invest- ment, and taking into account the development plans and priorities of the host state, the Millennium Development Goals and the indicative list of key responsibilities provided in Annex F, investors and their investments should strive to make the maximum feasible contributions to the sustainable development of the host state and local community through high levels of socially responsible practices.
Investors should apply the ILO Tripartite Declaration on Multinational Enterprises and Social Policy and the OECD Guidelines for Multinational Enterprises, as well as specific or sectoral standards of respon- sible practice where these exist.
Where standards of corporate social responsibility increase, investors should strive to apply and achieve the higher level standards.
Article 17. Investor Liability
Investors shall be subject to civil actions for liability in the judicial process of their home state for the acts or decisions made in relation to the investment where such acts or decisions lead to significant damage, personal injuries or loss of life in the host state.
Article 18. Relation of this Part to Dispute Settlement
<b>(A) </b>
Where an investor or its investment has breached Article 13 of this Agreement, neither the investor not investment shall be entitled to initiate any dispute settlement process established under this Agreement. A host or home state may raise this as an objection to jurisdiction in any dispute under this Agreement, or in the procedure set out in Part 9 of this Agreement.
Where an investor or its investment is alleged by a host state or an intervener in a dispute settlement proceeding under this Agreement to have failed to comply with its obligation relating to pre-establish- ment impact assessment, the tribunal hearing such a dispute shall consider whether this breach, if proven, is materially relevant to the issues before it, and if so, what mitigating or off-setting effects this may have on the merits of a claim or on any damages awarded in the event of such award.
Where a host state or home state believes that an investor or its investment has breached Article 13 or has persistently failed to comply with its obligations under Articles 14 or 15, and such investor or invest- ment has been notified by the host state or home state, as appropriate, either the host state or the home state may initiate proceedings before a tribunal under Part 9 of this Agreement to have the rights of the investor or investment, as the case may be, abrogated.
Where a persistent failure to comply with Articles 14 or 15 is raised by a host state defendant or an intervener in a dispute settlement proceeding under this Agreement, the tribunal hearing such a dis- pute shall consider whether this breach, if proven, is materially relevant to the issues before it, and if so, what mitigating or off-setting effects this may have on the merits of a claim or on any damages award in the event of such award.
A host state may initiate a counterclaim before any tribunal established pursuant to this Agreement for damages resulting from an alleged breach of the Agreement.
In accordance with the applicable domestic law, a host state or private person or organization, may initi- ate actions for damages under the domestic law of the host state, or the domestic law of the home state where such an action relates to the specific conduct of the investor, for damages arising from an alleged breach of the obligations set out in this Part.
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<b>Part 4: Host State Obligations PART 4: HOST STATE OBLIGATIONS </b>
Article 19. Procedural Fairness
In accordance with the requirements of Article 7:
(A) Host states shall ensure that their administrative, legislative and judicial processes do not operate in a manner that is arbitrary or that denies administrative and procedural fairness to investors and invest- ments. Investors or investments shall be notified in a timely fashion of administrative or judicial pro- ceedings directly relating to them, unless such notice is contrary to domestic law on an exceptional basis.
(B) Hosts states shall act in a manner that does not create a denial of justice in judicial and administrative proceedings. !5
(C) Administrative decision-making processes shall include the right of administrative appeal of decisions, commensurate with the level of development of the host state. Judicial review of administrative deci- sions should also be available through domestic judicial review processes.
(D) For greater certainty, the Parties understand that different Parties have different forms of administra- tive, legislative and judicial systems, and that states at different levels of development may not achieve the same standards or qualities for their administrative and judicial processes. Paragraphs (A)â(C) of this Article do not establish a single international standard in this context.
(E) Host states should strive to improve the transparency, efficiency, independence and accountability of their legislative, regulatory, administrative and judicial processes, and shall provide review or appeal procedures to ensure that they operate in accordance with applicable domestic laws and regulations.
(F) Judicial and administrative review processes shall be open to the public and documents shall be acces- sible by the public unless prohibited in accordance with domestic law. Decisions of such bodies shall be made available to the public.
14 For example, criminal investigations may require that no notice be given to anyone. 15 The fact that an investor or investment does not achieve a desired result does not constitute a denial of justice.
Article 20. Maintenance of Environmental and other Standards
The Parties recognize that it is inappropriate to encourage investment by relaxing domestic labour, public health, safety or environmental measures and thus shall not waive or otherwise derogate from, or offer to waive or otherwise derogate from, such measures as an encouragement for the establishment, acquisition, expansion or retention in their territories, of an investment.
Article 21. Minimum Standards for Environmental, Labour and Human Rights Protection
(A) Recognizing the right of each Party to establish its own level of domestic environmental protection and its own sustainable development policies and priorities, and to adopt or modify its environmental laws and regulations, each Party shall ensure that its laws and regulations provide for high levels of envi- ronmental protection and shall strive to continue to improve those laws and regulations.
(B) Each Party shall ensure that its laws and regulations provide for high levels of labour and human rights protection appropriate to its economic and social situation, and shall strive to continue to improve these laws and regulations.
(C) All Parties shall have, as a soon as practicable, a domestic environmental impact assessment law and social impact assessment law that meets the minimum standards adopted by the Conference of the Parties on these matters.
(D) All Parties shall ensure that their domestic law and policies are consistent with the core labor require- ments of the ILO Declaration on Fundamental Principles and Rights of Work, 1998.
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<b>Part 4: Host State Obligations </b>
(E) All parties shall ensure that their laws, policies and actions are consistent with the international human rights agreements to which they are a Party and, at a minimum, as soon as practicable with the list of human rights obligations and agreements to be adopted by the first meeting of the Parties.
Article 22. Anti-corruption
All host states shall ensure that
(A) the offering, solicitation or acceptance of an offer, promise or gift of any pecuniary or other nature, whether directly or through intermediaries, to any public official of the host state, for that official or for a third party, in order that the official or third party act or refrain from acting in relation to the per- formance of official duties to achieve any favour in relation to a proposed investment or any licences, permits, contracts or other rights in relation to an investment; and
(B) any acts complicit in any act described in Paragraph (A), including incitement, aiding and abetting, conspir- acy to commit or authorization of such acts;
shall be made criminal offences in the host state and subject to appropriate criminal enforcement and sanc- tions. Host states shall make every effort to prosecute such activities in accordance with domestic law.
Article 23. Publication of Information
Host states shall make available to the public any investment contracts or agreements with an investor or investment involved in the investment authorization process, subject to the redaction of confidential busi- ness information. Host states shall make available to the public all information relating to payments made to host state public authorities, including taxes, royalties, surcharges, fees and all other payments by invest- ments.
Article 24. Subsidies
Potential host states should not compete for the achievement of foreign investment or investments through subsidies or other means, including tax relief, that distort international competition for investments. The Parties shall initiate negotiations on a Protocol to establish legally binding obligations in this issue, having due regard for the need for special and differential treatment of developing countries, particularly least- developed countries, in such obligations.
IISD Model International Agreement on Investment for Sustainable Development 13
<b>Part 5: Host State Rights PART 5: HOST STATE RIGHTS </b>
Article 25. Inherent Rights of States
(A) Host states have, in accordance with the general principles of international law, the right to pursue their own development objectives and priorities.
(B) In accordance with customary international law and other general principles of international law, host states have the right to take regulatory or other measures to ensure that development in their territory is consistent with the goals and principles of sustainable development, and with other social and eco- nomic policy objectives.
(C) Except where the rights of a host state are expressly stated as an exception to the obligations of this Agreement, the pursuit of these rights shall be understood as embodied within a balance of the rights and obligations of investors and investments and host states, as set out in this agreement, and consis- tent with other norms of customary international law.
(D) Bona fide, non-discriminatory, measures taken by a Party to comply with its international obligations under other treaties shall not constitute a breach of this Agreement.
(E) Host states may, through their applicable constitutional processes, fully incorporate this Agreement into their own domestic law so as to make the provisions herein enforceable before domestic courts or other appropriate processes.
Article 26. Performance Requirements
(A) The Parties recognize their obligations regarding trade-related investment measures established in other international agreements to which they are a Party.
(B) Subject to Paragraph (A), host states may impose performance requirements to promote domestic development benefits from investments. Measures adopted prior to the completion of the host state measures prescribing the formalities for establishing an investment shall be deemed to be in compli- ance with this Agreement. If such measures are taken after the completion of the host state measures prescribing the formalities for establishing an investment, they shall be subject to the provisions of this Agreement.
(C) Measures covered by this Article include requirements: i) to export a given level or percentage of goods or services; ii) to achieve a given level or percentage of domestic content; iii) to purchase, use or accord a preference to goods produced or services provided in its territory; iv) to purchase goods or services from persons in its territory;
v) to relate the volume or value of imports to the volume or value of exports or to the amount of for- eign exchange flows associated with such investment;
vi) to restrict sales of goods or services in its territory that such investment produces by relating such sales to the volume or value of its exports or foreign exchange earnings; and
vii) similar measures intended to promote domestic development.
Article 27. Investment Promotion and Facilitation
Host states may maintain and develop investment promotion and facilitation agencies and services.
IISD Model International Agreement on Investment for Sustainable Development 14
<b>Part 5: Host State Rights Article 28: Access to investor information </b>
(A) Host states have the right to seek information from a potential investor or its home state about its cor- porate governance history and its practices as an investor, including in its home state.
(B) Host states shall protect confidential business information they receive in this regard.
(C) Host states may make the information provided available to the public in the community where the investment may be located, subject to the protection of confidential business information and to other applicable domestic laws.
IISD Model International Agreement on Investment for Sustainable Development 15
<b>Part 6: Home State Rights and Obligations PART 6: HOME STATE RIGHTS AND OBLIGATIONS </b>
Article 29. Assistance and Facilitation for Foreign Investment
(A) Home states with the capacity to do so should assist developing and least-developed states in the pro- motion and facilitation of foreign investment into such states, in particular by their own investors. Such assistance shall be consistent with the development goals and priorities of the countries in question. Such assistance may include, inter alia:
i) capacity building with respect to host state agencies and programs on investment promotion and facilitation;
ii) insurance programs based on commercial principles;
iii) direct financial assistance in support of the investment or of feasibility studies prior to the invest- ment being established;
iv) technical or financial support for environmental and social impact assessments of a potential investment;
v) technology transfer; and
vi) periodic trade missions, support for joint business councils and other cooperative efforts to pro- mote sustainable investments.
(B) Home states shall inform host states of the form and extent of available assistance as appropriate for the type and size of different investments.
Article 30. Information
(A) Home states shall, on request, and in a timely manner, provide to a potential host state such informa- tion as is requested and available for the purposes of the host state to meet its obligations and per- form its duties in relation to an investor or investment under this Agreement and the host stateâs domestic law. Home states shall protect confidential business information in this regard.
(B) Home states shall, on request, and in a timely manner, provide information relevant to the home state standards that might apply under like circumstances to the investment proposed by its investor, includ- ing but not limited to the home state environmental impact assessment process.
Article 31. Investor Liability In Home State
Home states shall ensure that their legal systems and rules allow for, or do not prevent or unduly restrict, the bringing of court actions on their merits before domestic courts relating to the civil liability of investors for damages resulting from alleged acts or decisions made by investors in relation to their investments in the territory of other Parties.1© The host state laws on liability shall apply to such proceedings.
16 This Article requires home states to end such procedural or jurisdictional constraints as seen in the forum non conveniens rule, or similar rules, that impede hearings on the merits of cases relating to investor acts or decisions.
Article 32. Anti-corruption
(A) All home states shall ensure that:
i) the offer, promise or giving of any money or gift of any other nature, whether directly or through intermediaries, to any public official of the host state, for that official or for a third party, in order that the official or third party act or refrain from acting in relation to the performance of official duties to achieve any favour in relation to a proposed investment or any licences, permits, contracts or other rights in relation to an investment; and
ii) any acts complicit in any act described in Paragraph (i), including incitement, aiding and abetting, conspiracy to commit or authorization of such acts;
IISD Model International Agreement on Investment for Sustainable Development 16
<b>Part 6: Home State Rights and Obligations </b>
shall be made criminal offences in the home state and subject to appropriate criminal enforcement and sanctions. Home states shall make every effort to prosecute such activities in accordance with domes- tic law.
(B) All home states shall ensure that any money or other forms of benefits encompassed in Paragraph (A) shall not be recoverable or deductible in any fiscal or tax laws or policies.
(C) Home states shall, when possible, provide all available information that might assist a dispute settle- ment tribunal under this Agreement in determining whether a breach off an anti-corruption obligation has occurred.
IISD Model International Agreement on Investment for Sustainable Development 17
<b>Part 7: Relation to Other Agreements </b>
<b>PART 7: RELATION TO OTHER AGREEMENTS </b>