<b>(A) </b>
Upon the home and host states becoming Parties to this Agreement, all pre-existing international investment agreements to which they are a Party shall, as between such states, be deemed to be ter- minated by mutual consent and all the rights and obligations due shall be pursuant to this Agreement. Except as specified in Article 3(F), such termination shall be immediate notwithstanding any expiration period for the rights of investors or investments under such pre-existing agreements.
Where states Party to this agreement have an international investment agreement with a non-Party, they shall strive to renegotiate those agreements to make them consistent with the present Agreement or to ensure that all Parties to the other Agreement become a Party to this Agreement.
States Party to this agreement shall ensure that all future investment agreements to which they may become Party are fully consistent with the present Agreement, particularly with the balance of rights and obligations it establishes, and the principal features of the dispute settlement system. The Conference of the Parties may be called upon to assess compliance with this obligation on the request of a Party.
Notwithstanding any of the above, any disputes that have been formally initiated under prior interna- tional investment agreements shall be decided in accordance with the rights and obligations of that agreement.
Article 34. Relation to other International Agreements
<b>(A) </b>
<b>() </b>
<b>) </b>
The Parties agree that the provisions of other international trade agreements to which they are a Party are consistent with the provisions of this Agreement. The Parties shall seek to interpret such agree- ments in a mutually supportive manner.
In the event of any dispute arising on this issue, the Parties shall seek to resolve such dispute within the mechanisms of this agreement as a first step.
The Parties hereby re-affirm their obligations under international environmental and human rights agreements to which they are a Party.
IISD Model International Agreement on Investment for Sustainable Development 18
<b>Part 8: Institutions </b>
<b>PART 8: INSTITUTIONS </b>
Article 35. National Authority
<b>(A) </b>
Each Party shall establish a National Authority as a contact point for purposes related to the Agreement. The functions of the National Authority shall include:
i) requesting or transmitting information from or to another Party;
ii) providing a contact for assistance in investment promotion and facilitation;
iii) maintaining statistics about inward and outward investment of the Party;
iv) handling enquiries in relation to the conduct of investments or investors of the Party;
v) investigating and seeking to resolve concerns or conflicts raised by individuals or civil society groups in relation to the conduct of investors or investments concerning their obligations under this Agreement or the additional responsibilities set out in the Agreement;
vi) reporting on any matters dealt with under Paragraph v; and vii) any other functions the Party incorporates into its work.
The National Authority shall operate in a visible, accessible, transparent and accountable manner. It shall receive and consider information, statements of concern or other information from government officials, non-governmental groups or individuals from the State Party in which it is established, or from the host state of an investor for which it is the home state.
Article 36. Conference of the Parties
<b>(A) </b>
<b>() </b>
The Conference of the Parties will be the governing body of the Agreement. It shall meet within one year of the Agreement coming into force, and once every year after that.
The Conference of the Parties shall adopt at its first meeting rules of procedure and financial rules for itself and any subsidiary bodies, as well as financial provisions governing the functioning of the Conference of the Parties and the Secretariat.
All Parties shall have an equal voice on the Conference of the Parties. Decisions shall be taken by con- sensus. Where, after all efforts are exhausted, no consensus is deemed possible by the chair of a meet- ing, a decision may be taken by three-quarters of the Parties present and voting.
The Conference of the Parties shall perform the tasks assigned by the Agreement and such additional tasks as it deems appropriate for the fulfillment of the purposes of the Agreement. These tasks shall include, inter alia:
i) appoint the Executive Director of the Secretariat, and instruct the Secretariat on its functions; ii) adopt Protocols and Annexes to this Agreement;
iii) adopt the instruments or lists required of it in other Articles of this Agreement;
iv) promote the development of qualitative standards for sustainable investments;
v) establish qualitative criteria for measuring the effective contribution of investments to host state development;
vi) monitor the effectiveness of this Agreement, including undertaking of a three-year review of the operation and effectiveness of this Agreement and subsequent reviews every three years;
vii) establish a procedure for Parties to report on the implementation and effectiveness of the Agreement at the state level;
vill) appoint such sub-organs or committees as it determines necessary for the proper functioning of this Agreement, including an Executive Committee of regionally balanced representation to over- see the management and operation of this Agreement between meetings of the Conference of the Parties, and a review and monitoring body to assist in the monitoring of this Agreement; and
IISD Model International Agreement on Investment for Sustainable Development 19
<b>Part 8: Institutions </b>
ix) adopt interpretative statements concerning the interpretation of this Agreement.
(E) The United Nations and its specialized agencies, the World Trade Organization, the World Bank and its component agencies, any other inter-governmental organization whose work is impacted by this Agreement, as well as any state not Party to this Convention, may be represented at meetings of the Conference of the Parties as observers. Any body or agency, whether national or international, gov- ernmental or non-governmental, qualified in matters covered by the Convention, and which has informed the Secretariat of its wish to be represented at a meeting of the Conference of the Parties as an observer, may be admitted unless at least two-thirds of the Parties present object. The admission and participation of observers shall be subject to the rules of procedure adopted by the Conference of the Parties.
Article 37. Technical Assistance Committee
A Technical Assistance Committee of the Conference of the Parties is hereby established as a Committee of the whole. This Committee shall:
i) have special expertise in the promotion of development and sustainable investments;
ii) organize the provision of technical assistance to the Parties relating to the implementation of this Agreement, upon their request, including in the area of development planning and investment linkages;
iii) establish and manage a special fund for the provisions of technical assistance; iv) promote the transfer of technology through appropriate investments; and v) such other matters as the members of the Committee or the Conference of the Parties may determine.
The rules of procedure and participation applicable to the Conference of the Parties shall apply, mutatis mutandis, to this Committee.
Article 38. Financial Mechanism
The Parties shall establish a financial mechanism with the objective of supporting institutional development and capacity building in host state developing countries and, in particular, least-developed countries. Support from this mechanism may be directed at support for the Technical Assistance Committee, invest- ment promotion and facilitation projects, at the monitoring of the effectiveness of this agreement, and for the establishment and operation of the Legal Assistance Centre.
Article 39. Secretariat
(A) A Secretariat to the Agreement is hereby established. The Secretariat shall be headed by an Executive Director appointed by the Conference of the Parties.
(B) The Executive Director shall be responsible for appointing and managing an international staff capable of providing the necessary range of support for the Conference of the Parties and to meet its respon- sibilities.
(C) The Secretariat shall be an independent body and undertake such tasks as may be directed by the Conference of the Parties. Such tasks may include:
i) making arrangements for meetings of the Conference of the Parties and its subsidiary bodies and to provide them with services as required;
ii) facilitating assistance to the Parties, particularly developing Parties and Parties with economies in transition, on request, in the implementation of this Agreement;
iii) ensuring the necessary coordination with the Secretariats of other relevant international bodies;
iv) entering, under the overall guidance of the Conference of the Parties, into such administrative and contractual arrangements as may be required for the effective discharge of its functions;
IISD Model International Agreement on Investment for Sustainable Development 20
Part 8: Institutions v) collecting and disseminating information on the functioning of this Agreement, including the implementation of its provisions and the rates of foreign direct investment under the Agreement;
vi) establishing a list of qualified mediators to assist Parties, investors and investments in resolving potential disputes;
vii) performing the other Secretariat functions specified in this Convention and such other functions as may be determined by the Conference of the Parties; and
vill) performing the tasks necessary to assist in preparing for the first meeting of the Conference of the Parties.
Article 40. Dispute Settlement Body
<b>(A) </b>
<b>() </b>
<b>) </b>
A Dispute Settlement Body (DSB) is hereby established to manage the dispute settlement processes under this Agreement.
The Dispute Settlement Body shall be composed of a Council of the Parties open to all Parties, a panel division and an appellate division.
The Council of the Parties shall establish a Secretariat to assist the Dispute Settlement Body in its oper- ation and the panel and appellate divisions in the management of their cases. The Secretariat shall be headed by a Director.'? This dispute settlement Secretariat shall be independent of any other body established by this Agreement.
The Council shall oversee the operation of the Dispute Settlement Body. It shall be responsible for ensuring the smooth operation of the dispute settlement processes as a whole. The Council may not interfere in any individual disputes between Parties or between an investor or investment and a Party.
There shall be a standing body of 35 panelists from which all panel members shall be drawn. The Director of the Council shall appoint all panelists on disputes on a lottery basis, and subject to:
i) no panelist being called to serve more than twice before all other panelists have served at least once; and
ii) no panelist being from a state of a disputing Party.
The panelists shall be chosen by the Council at its first meeting, with one-third then chosen at each subsequent meeting. No panelist can serve more than three terms, subject to completing any ongoing dispute settlement processes in which the panelist is engaged.
Any panelist in a position of real or apparent conflict of interest shall recuse himself or herself from the panel in question.
The appellate division shall be composed of nine individuals with recognized expertise in the matters covered by this Agreement. Appellate body members shall be appointed on a full-time basis and be free of any real or apparent conflict of interest in any case on which they sit.
Appellate division members shall be chosen by the Council for a term of seven years. The Council shall choose a replacement for any member who is incapable of continuing to fulfill their duties for the remainder of their term. Members may be re-elected one time. For the first period, the Council shall select new members or re-select existing members, after four years.
Members of the panel and appellate divisions shall be individuals of high repute with expertise in the matters covered by this Agreement. Each shall comply with a Code of Ethics that will establish the highest standards of conduct and ensure the absence of a real or apparent conflict of interest in all cases.'8 No panel or appellate body member may be an advocate in any arbitration cases at the same time as being a member of either division, or affiliated with other advocates in a similar situation.
17
18
The Council of the Parties may designate, subject to appropriate arrangements being agreed, the Centre to act as the Secretariat for the Dispute Settlement Body if it becomes an independent body responsible only to the Council of the Parties.
A minimum standard to be included in the Code of Ethics shall require that no panel division member may be an advocate in any investment arbitration cases at the same time as being a member of either division, or directly affiliated with other advo- cates in a similar situation. (Appellate division appointments are full time and in a personal capacity, and hence encompass this rule by definition.)
IISD Model International Agreement on Investment for Sustainable Development 21
<b>Part 8: Institutions </b>
Article 41. Legal Assistance Centre
(A) A Legal Assistance Centre to assist developing country Parties, and especially least-developed states, in responding to claims by an investor or in initiating procedures permitted under this Agreement against investors, shall be established.
(B) This Centre shall be independent of the Secretariat and function as a self-directed body. Its legal advice shall be confidential and subject to the same standards of lawyer-client protection and service as a pri- vate law firm.
(C) The Centre may also assist in capacity building on legal issues raised in this Agreement in developing countries, or for the implementation of the Agreement under domestic law and policy.
(D) The Legal Assistance Centre shall report to the Conference of the Parties on a yearly basis concerning its financing and a summary of its activities.
(E) The Legal Assistance Centre shall disclose all sources of funds. It may receive funds from states Party, other States, international organizations and non-governmental organizations as long as the receipt of such funds is public and does not compromise the integrity of the Centre.
IISD Model International Agreement on Investment for Sustainable Development 22
<b>Part 9: Dispute Prevention and Settlement </b>
<b>PART 9: DISPUTE PREVENTION AND SETTLEMENT </b>
Article 42. Prevention of Disputes and Mediation
(A) In the event a dispute arises between the Parties, between a State Party and an investment or investor, or between an investment or investor and a host state, the Party wishing to raise the dispute shall issue a notice of intention to initiate an arbitration under this Agreement to the other potential disputing Party or Parties.
(B) For the purposes of this Agreement, there shall be a minimum six-month cooling-off period between the date of a notice of intention to initiate a dispute settlement process under this Agreement, and the date a Party, investment or investor, as the case may be, may formally initiate a dispute.
(C) The Parties shall seek to resolve potential disputes through amicable means, both prior to and during the cooling-off period. Investors and investments shall similarly seek to resolve potential disputes with host states, and host states with their investors and investments, in an amicable manner, prior to and during the cooling-off period. The use of good offices, conciliation, mediation or any other agreed dis- pute resolution process may be applied.
(D) Where no alternative means of dispute settlement are agreed upon, Parties, investors or investments, as the case requires, shall seek the assistance of a mediator to resolve disputes during the cooling-off period required under this Agreement between notification of a potential dispute and the initiation of dispute settlement proceedings. The potential disputants shall use a mediator from the list established by the Secretariat for this purpose, or another one of their joint choosing. Recourse to mediation does alter the minimum cooling-off period.
(E)_ If no mediator is chosen by the disputing parties prior to three months before the expiration of the cool- ing-off period, the Director of the Council shall appoint a mediator from the Secretariat list who is not a national of a State Party or the investor. The appointment shall be binding on the disputing parties.
(F) The Parties may also establish regionally-based mediation centres to facilitate the resolution of disputes between Parties and investors or investments, taking into account regional customs and traditions. Mediators officially appointed to such centres shall be incorporated into the Secretariat list.
Article 43. State-state Disputes
(A) In the event of a dispute between two or more Parties as to the application or interpretation of this Agreement, and such dispute has not been resolved pursuant to good faith efforts in accordance with Article 42, a Party may initiate an arbitration in accordance with the rules in this Agreement, including Annex A of this Agreement, applying them mutatis mutandis to the context of a state-state dispute.
(B) Such a dispute shall, unless otherwise resolved, proceed to a panel, and may, at the discretion of a dis- puting Party, subsequently be taken to the appellate division.
Article 44. Procedure for Abrogation of Investor/investment Rights
(A) In the event of a dispute between a Party and an investor or investment relating to the abrogation of said investor's or investment's rights under Article 18 of this Agreement, and such dispute has not been resolved pursuant to good faith efforts in accordance with Article 42, a Party may initiate an arbitra- tion in accordance with the rules in this Agreement, including Annex A of this Agreement, applying them mutatis mutandis to the context of a state-investor/investment dispute.
(B) A special expedited process shall be established by the Council to ensure that a panel decision shall be rendered within six months of an arbitration being initiated. The appellate division shall decide any appeal on this issue within 90 days of its submission to them.!9
19 Panels and the appellate division shall establish their own ad hoc procedure, in keeping with good international practice, in the event of an action under this Article prior to the Council adopting a procedure.
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<b>Part 9: Dispute Prevention and Settlement </b>
(C) The panel or appellate division may, if requested, issue an interim order suspending the rights of the investor(s) or investment for the duration of the process, so long as any period of limitations that may impact the ability of the investor or investment to initiate a dispute is subsequently extended by the length of any such suspension if necessary.
(D) A dispute under this Article may, at the discretion of a disputing party, be appealed to the appellate division. (E) The decision of the panel or appellate division on the abrogation of rights may be permanent or for any
period over a minimum of three years it determines is appropriate, or may provide a minimum period after which the investment or investor(s) may apply for reinstatement of its rights.
Article 45. Investor/investment-state Disputes
(A) In the event of a dispute between an investor or investment and a host State Party as to the applica- tion or interpretation of this Agreement, and such dispute has not been resolved pursuant to good faith efforts in accordance with Article 42, the investment or investor may initiate an arbitration in accor- dance with the rules in this Agreement, including in Annex A, applying them mutatis mutandis to the context of an investor/investment-state dispute.
(B) A dispute between an investor or investment and a host state may not be commenced until domestic remedies are exhausted in relation to the underlying issues pleaded in relation to a breach of the Agreement.
(C) Where such remedies are unavailable due to the subject of the dispute or a demonstrable lack of inde- pendence or timeliness of the judicial or administrative processes2° implicated in the matter in the host state, an investor may plead this in an application before a panel as a preliminary matter. The decision of a panel on this issue shall be final. This panel shall be chosen in accordance with Article 40. The Council shall establish procedures for such a pleading at its first meeting.2!
(D) Where a dispute under this Article proceeds to a panel, the decision may, at the discretion of a dis- puting Party, subsequently be taken to the appellate division.
(E) Use of the investor-state process by an investor is subject to Article 18.
20 The Parties recognize that different processes do take different amounts of time. Thus, the key determinant should be that the procedures are moving forward in a time that is consistent with good practice and the normally anticipated timeframe for that type of procedure in the host state, and that no undue burdens or impediments are being placed on the proceedings.
21 Panels shall establish their own ad hoc procedure, in keeping with good international practice, in the event of an action under this Paragraph prior to the Council adopting a procedure.
Article 46. Transparency of Proceedings
(A) All documents relating to a notice of intention to arbitrate, the settlement of any dispute pursuant to Article 42, the initiation of a panel or appeal, or the pleadings, evidence and decisions in them, shall be available to the public through an Internet site.
(B) Procedural and substantive oral hearings shall be open to the public.
(C) A panel or appellate tribunal may take such steps as are necessary, by exception, to protect confiden- tial business information in written form or at oral hearings.
(D) A panel or appellate tribunal shall be open to the receipt of amicus curiae submissions in accordance with the process set out in Annex A.
Article 47. Enforceability of Final Awards
Parties shall adopt such domestic rules as are required to make final awards enforceable in domestic legal proceedings in their states.
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<b>Part 9: Dispute Prevention and Settlement </b>
Article 48. Governing Law In Disputes
(A) When a claim is submitted to a panel or an appeal tribunal, it shall be decided in accordance with this Agreement, national law of the host state, and the general principles of international law.
(B) The Interpretive Notes of the Parties attached to this Agreement shall be binding upon any tribunal established under this Agreement, and any award must be consistent with such Notes.
(C) An Interpretive Statement adopted by the Conference of the Parties declaring its interpretation of a provision of this Agreement shall be binding upon any tribunal established under this Agreement, and any award must be consistent with such a Statement.
(D) A decision by the appellate division on an interpretation of this Agreement shall be binding on subse- quent panels and appellate tribunals, unless it is made inapplicable by virtue of an Interpretive Statement relating to the Agreement adopted by the Conference of the Parties, or an amendment to the Agreement.
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<b>Part 10: General Exceptions PART 10: GENERAL EXCEPTIONS </b>
Article 49. National Security
Nothing in this Agreement shall be construed:
i) to require a Party to furnish or allow access to any information the disclosure of which it deter- mines to be contrary to its essential security interests; or
ii) to preclude a Party from applying measures that it considers necessary for the fulfillment of its obli- gations under the United Nations Charter with respect to the maintenance or restoration of inter- national peace or security, or the protection of its own essential security interests.
Article 50. Rules for Taxation Measures
(A) Except as set out in this Article, nothing in this Agreement shall apply to taxation measures.
(B) Nothing in this Agreement shall affect the rights and obligations of either Party under any tax conven- tion. In the event of any inconsistency between this Agreement and any such convention, that con- vention shall prevail to the extent of the inconsistency. In the case of a tax convention between the Parties, the competent authorities under that convention shall have sole responsibility for determining whether any inconsistency exists between this Agreement and that convention.
(C) National treatment and most-favoured-nation treatment shall apply to all taxation measures, other than those on income, capital gains or on the taxable capital of corporations, taxes on estates, inheri- tances, gifts, and generation-skipping transfers, except that nothing in those Articles shall apply:
i) in the case of a most-favoured-nation obligation, with respect to an advantage accorded by a Party pursuant to a tax convention;
ii) to a non-conforming provision of any existing taxation measure;
iii) to the continuation or prompt renewal of a non-conforming provision of any existing taxation measure;
iv) to an amendment to a non-conforming provision of any existing taxation measure to the extent that the amendment does not decrease its conformity, at the time of the amendment, with any of those Articles;