1.
Lorenzo Cotula
Team Leader – Legal Tools
International Institute for Environment and Development (IIED)
Investment treaties:
What they are and why
they matter

2.
Investment treaties and grassroots action:
A hypothetical but plausible scenario
Agribusiness project, large-scale land acquisition, community and
CSO mobilisation
Following company breach of contractual conditions, government
terminates the project
Company initiates arbitration against government, arguing treated
unfairly and claiming $’00mn damages (plus arbitration costs)
Monetary issue - should the public purse shoulder costs?
Can prospect of compensation payouts discourage government
from heeding to community/CSO demands?

3.
Investment treaties
Agreements concluded between two or more states to promote
investment by nationals of one state into the other state
• Bilateral, regional, multilateral treaties
• Increasingly investment chapters within wider preferential trade &
investment agreements
Reciprocal in form but often not in practice, especially in treaties
between developed and developing countries
Not to be confused with investment contracts concluded between a
government and a company to regulate a specific investment project
Investment promotion mainly through protection, increasingly pre-
establishment provisions

4.
Investment protection
Substantive standards
Eg ‘fair and equitable treatment’ - flexible standard, leaves significant
room for discretion reflected in diverse arbitral interpretations
Legal remedies - usually, investor-state arbitration (‘ISDS’)
Investor can take disputes with government to an arbitral tribunal -
usually three private lawyers, appointed to settle the dispute
If the investor wins, tribunal awards compensation - can involve very
substantial amounts (compensation, arbitration costs)
No appeal, relatively effective mechanisms to enforce pecuniary awards

5.
Investment treaties and CSO advocacy
Complex technical/legal issues – but choices on whether to conclude
an investment treaty, and in what form, are political
Need for transparency and democratic deliberation, CSO advocacy
key
Diverse perspectives and positioning in the political spectrum – but
important to share lessons from experience
What strategies, tools and tactics work, where and under what
conditions?

6.
ENGAGING THE
TPPA – LESSONS
FROM MALAYSIAN
CIVIL SOCIETY
Fauwaz Abdul Aziz
Idris Institute for Research (Malay Economic
Action Council)
12 February, 2015

7.
1.1
Assessmen
t, Analysis
Setting
• The People’s Anti-FTA Coalition (to tackle US-
Malaysia FTA (2006) and EU-ASEAN FTA (2007), TPPA
and EU-Malaysia FTA (both in 2010): Advocated on
all those controversial aspects of FTAs
• FTA Coalition had more opposition party
involvement = less political engagement, but more
direct actions
• Weak Bush position on US FTAs
• Differences between administrations of Mahathir
(1981-2003), Badawi (2003-2009) and Najib (2009-
present): Transition period between state-led
capitalism (Mahathir), to ‘Mr Nice Guy (Badawi) and
corporate-led capitalism (Najib). During Badawi’s
time, Mahathir legacy still casted a long shadow:
• Set up BANTAH (‘Resist’) the TPPA coalition (2013):
• Greater emphasis on Investment Chapter, ISDS –
impacts on Affirmative Action, Income & Wealth
Distribution

8.
1.2.
Assessmen
t, Analysis
International scenario:
• Increasing prominence of Investment chapters
(NAFTA, CAFTA, EU FTAs, etc), TPPA’s draft
Investment Chapter
• Increasing powers, protection, benefits (vs
responsibilities, liabilities) of Trans-National
Corporations
• Governments getting smaller as representative
of public interest & responsibilities, but getting
bigger as representatives, manager of corporate
interests
• Attack on fundamental elements of democratic,
civil society practices (e.g. prior consultation,
prior consent, public services &
sensitive/strategic sectors)
Domestic senario
• ‘Najiberalism’
• Greater US Stakes (Democrats campaign during Bush
administration against ISDS, Obama’s pre-2008

9.
1.3. Goals
• Malaysia walks out of the TPPA.
• Not have an Investment Chapter
• Malaysia should NOT agree to
• ISDS, regulation of capital flow, “fair and
equitable treatment”
• an “expropriation” provision, “indirect
expropriation”, restrictions on performance
requirements beyond those at the WTO, bind
state and local governments, restrict capital
controls on inflows and outflows to prevent a
financial crisis or to deal with it when one
happens, disciplines on ‘currency manipulators’
if defined in a way that would include Malaysia
(foreign exchange reserves that can cover 6
months of imports and a current account
surplus), punishment of currency manipulators
by tariffs being raised on their exports
• Malaysia SHOULD ensure that an Exceptions chapter
has the effective exceptions needed (e.g. for

10.
Civil Society Advocacy
on Investment Treaties:
Lessons from the Philippines
Joseph Purugganan
Focus on the Global South /EU-ASEAN FTA Campaign

11.
THE PROBLEM

12.
CORPORATE AGENDA
 The strong push for a global consensus on 21st Century trade
and investment regime, which institutionalizes the corporate
agenda in trade and investment policies.
 This corporate driven agenda would worsen inequality, erode
peoples rights and impact negatively on the environment.

13.
New Generation FTAs
 These new generation trade agreements encompass a whole
range of economic policies that push for market liberalization
of goods and services, stronger and more restrictive
intellectual property rights, but also the easing of restrictions
on investments, and greater investor protection

14.
STRATEGIES
To push back FTAS AND IIAS, and
 Expose and address impacts of
investments on the ground

15.
1. CONSOLIDATING THE POLITICAL
AGENDA AND ANALYSIS

16.
National and regional forums on
investments
Bangkok 2013
Phnom Penh 2012

17.
STRENGTHENING NETWORKS AND
BUILDING MOVEMENTS
In SEA, the existence of a regional
campaign network (EU-ASEAN) became
the main platform for discussions on ISDS
and integrating ISDS and investment
issues into the trade campaign.

18.
Linking campaigns and
movements
 Regional Forums like ASEAN Peoples Forum (APF), Asia-
Europe Peoples Forum (AEPF), ASEAN Grassroots Peoples
Assembly (AGPA) among others
 Finding common ground; defining a common handle for joint
campaigning
 Amplifying core issues through emblematic cases

19.
DIRECT ENGAGEMENT WITH
GOVERNMENT
 Submissions made to the Philippine government on:
 Conduct of social impact assessment
 Memorandum on the benefits of undertaking a review of
international investment agreements and the ISDS mechanism
 Dialogues with Agencies
 Trade Department
 Human Right Commission
 Congress/Parliament

20.
POPULAR EDUCATION AND
MEDIA
 organizing public forums and media briefings on ISDS-
anchoring the discussions on the actual cases both those
against the particular countries and the emblematic cases
proved useful.

21.
OVERALL GOALS
 To inform and educate the public
 To build the campaign constituency
 To document and articulate impacts of investments
 To inform and influence government to reject iSDS in FTAs,
to begin a process of review or auditing existing BITS, and
review of investment policies

22.
2.1.
-
Approach
- Strategy
- Tactics
• Have research done, published, disseminated
• Non-partisan, apolitical = MORE political
engagement
• Strategic alliances, coalition-building
• Raise questions & concerns remaining unaddressed
by Government, challenge the paradigm framing
investment agreements, values underlying them:
• Strip off the cloak of secrecy & technicalities
surrounding the TPPA, Investment Chapter:
• Dichotomising the benefits-costs of TPPA: Obscene
lop-sidedness of Investment Chapter, ISDS
arbitration system
• Overall Impact on Malaysian lives
• Specific impacts on Bumiputera community
• Strengthen government position on investment
issues of
• Exclusions
• investment authorization
• pre-establishment

23.
TIPS on Campaigning
1. Clearly define your position and how you frame the issue
2. Build a constituency around this position and framing
3. Back up your assertions with studies and clear cases
4. Use emblematic cases to drive home the point and as a
tool to link campaigns

24.
3.1
Outcome:
Successes
Government agreed to:
• Engage with CSOs on TPPA (from 2 in 2011, 3 in
2012, 13 in 2013)
• Carry out, disclose cost-benefit analyses and a
‘national interest analysis’ of the TPPA
• Appoint ‘cleared advisors’ on the TPPA from
industry, trade, civil society reps as well as
academics and other experts on a voluntary, non-
remunerative basis.
• ‘Carve out’ tobacco from the list of goods that
firms could claim under the TPPA benefits, such as
ISDS arbitration
Public:
• Before: very little awareness about TPPA. Now:
many ordinary men and women at least now
recognise there are negotiations taking place, even
if they know very little beyond
• Its secrecy
• the higher costs of medicine

25.
3.2
Outcome:
Failures
The ball was always with the government to decide
how frequent, and how far, it would engage with
BANTAH or other civil society organisations over the
TPPA.
Specific failures
• ISDS (government previously promised to look into
‘alternatives to ISDS)
• regulation of capital flow
• “fair and equitable treatment”
• an “expropriation” provision
• “indirect expropriation”
• restrictions on performance requirements beyond
those at the WTO
• bind state and local governments
• restrict capital controls on inflows and outflows to
prevent a financial crisis or to deal with it when
one happens

26.
3.3
Outcome:
Failures
Failure to mobilise more people: Only a very small
number of social and political activists were ready to
devote their energies to the ‘dry’ issues of political
and socio-economics, at most a few hundred at
rallies/gatherings/talks on TPPA. Most were caught up
in the partisan politics of BN versus Pakatan. But tens
and hundreds of thousands would brave tear gas,
water cannons, police batons and arrests to express
support for, or opposition against, one political group
or another, only a few hundred people made up
mostly of leftists would show up for rallies and talks
on the TPPA.

27.
4. Closing
remarks
• Need for adequate human, financial resources to
tackle issues (applies to government, civil society
and industries).
• Advocacy on trade and investment an EXHAUSTIVE
process.
• Lack of resources to tackle HUGE issues (deep &
comprehensive changes that are fundamental to
Malaysia and other countries
• Need for accurate, timely research for both
awareness, informative and lobbying purposes.
• Need for full-time, dedicated coordinators
• Network and build coalition, strategic alliances: How
to balance between advocating for race-based
affirmative action while convincing other races to
join the same call on top of other cross-cutting
issues? Look at commonalities of issues, persuade
need still remains for affirmative action
• The TPPA report Malaysia is Not for Sale has
maintained the campaign. Whatever difficulties
during the campaign, we are remembered afterward

28.
Thank you.
Idris Instite
Mallay Economic Action Council
No.24, Jalan Telawi 9, Bangsar
59100 Kuala Lumpur
No. Tel: +603-2284 6670 Faks: +603-2284 6671
Email : fauwaz@idrisinstitute.org

29.
OUTCOMES
 ISDS IN THE PUBLIC CONSCIOUSNESS
 GOVERNMENTS ARE OPEN TO THE IDEA OF
REVIEWING INVESTMENT POLICIES
 BUT THERE IS ALSO THE DANGER OF FOCUSING
SOLELY ON ISDS IN FTA CAMPAIGNING