Rethinking investment treaties, laws and contracts


International treaties, national laws and transnational contracts define the terms of an investment and influence the distribution of its costs and benefits. To promote inclusive sustainable development, IIED works with partners to rethink these legal documents and the process through which they are formulated.

Flags outside the Palais des Nations, Geneva

Economic globalisation has been accompanied by extensive developments in the national and international law that regulates investment flows. Applicable rules include investment treaties concluded between two or more states; the national law of the country hosting the investment or, in some cases, of a third country; and contracts between investors and host states ('investment contracts').

These legal arrangements influence the terms and conditions of foreign investment, the way its costs and benefits are shared and, ultimately, how well it contributes to inclusive sustainable development. It is therefore critical that sustainable development considerations are properly factored in.

Take the case of investment treaties. These treaties protect foreign investment against adverse host state interference. Increasingly, they also liberalise investment flows. More than 3,000 such treaties have been concluded worldwide, more are being negotiated.

The signing and wording of investment treaties can imply important trade-offs between policy goals: depending on how they are interpreted, seemingly straightforward treaty provisions intended to reassure foreign investors that they will not be treated unfairly could make it more difficult for states to pursue other policy goals relating to sustainable development. For example, investors have relied on investment treaties to challenge government measures to protect the environment or public health, address historical injustices, collect taxes or sanction contractual breaches.

Therefore, countries considering negotiating investment treaties need to ensure proper reflection and public debate on these important policy choices. Yet treaty negotiations typically happen behind closed doors, and there is limited oversight by civil society or parliamentarians. There is also limited public awareness about the complex technical issues involved.

Together with partners in Africa and Asia, IIED carries out research to highlight issues and explore possible solutions; develops capacity oriented materials for governments, parliamentarians, civil society and citizen groups; and promotes international sharing from innovation.

In October 2018, IIED – with the United Nations Commission on International Trade Law (UNCITRAL), the Columbia Center on Sustainable Investment, and the International Institute for Sustainable Development – organised an open forum at UNCITRAL's Working Group III 36th session in Vienna, Austria. The event was designed to give interested members of the public (such as civil society organisations, academics and practitioners) and government officials an opportunity to present their views on the reform of investor-state arbitration. A similar event was organised during the 35th session in New York the previous April.


Reforming investor-state dispute settlement: what about third-party rights? Lorenzo Cotula, Nicolás M Perrone (2019) IIED Briefing

Special economic zones: engines of development or sites of exploitation? Lorenzo Cotula, Liliane Mouan (2018) IIED Briefing

Raising the bar on responsible investment: what role for investment treaties? Lorenzo Cotula (2018) IIED Briefing

Community perspectives in investor-state arbitration, Lorenzo Cotula, Mika Schröeder (2017) Research Report

China-Africa investment treaties: do they work? Lorenzo Cotula, Xiaoxue Weng, Qianru Ma, Peng Ren (2016) Research Report

Beyond trade deals: charting a post-Brexit course for UK investment treaties, Lorenzo Cotula, Lise Johnson (2016) Briefing

Rethinking investment treaties to advance human rights, Lorenzo Cotula (2016), IIED briefing

Additional resources

Foreign investment, law and sustainable development: A handbook on agriculture and extractive industries, Lorenzo Cotula (2013, second edition 2016), IIED, Natural Resource Issues series

Advocacy on investment treaty negotiations: lessons from Malaysian civil society, Fauwaz Abdul Aziz (2015), IIED Case case study

Democratising international investment law: recent trends and lessons from experience, Lorenzo Cotula (2015), IIED

Land rights and investment treaties: exploring the interface, Lorenzo Cotula (2015), IIED Land, investment and rights series

Agricultural investments in Southeast Asia: Legal tools for public accountability, Emily Polack, Lorenzo Cotula, Emma Blackmore and Shalmali Guttal (2014), IIED Land, investment and rights series

Agricultural commercialisation contracts: concessions over people?, Lorenzo Cotula, Thierry Berger (2014), IIED Briefing paper

IIED submission to the EU public consultation on the Transatlantic Trade and Investment Partnership, Lorenzo Cotula and Thierry Berger (2014), IIED

Investment treaties and sustainable development: an overview, Lorenzo Cotula (2014), IIED Briefing paper | in Burmese

Investment treaties and sustainable development: Investment liberalisation, Lorenzo Cotula (2014), IIED Briefing paper | in Burmese

Investment treaties and sustainable development: Investment protection, Lorenzo Cotula (2014), IIED Briefing paper | in Burmese

Investment treaties and sustainable development: Investor-state arbitration, Lorenzo Cotula (2014), IIED Briefing paper | in Burmese

Reshaping contracts for quality natural resource investments, Lorenzo Cotula (2013), IIED Briefing paper

How to scrutinise a production sharing agreement, Ingilab Ahmadov, Anton Artemyev, Kenan Aslanly, Ibragim Rzaev and Ilkham Shaban (2012), IIED

Land deals in Africa: What is in the contracts?, Lorenzo Cotula (2011), IIED, Land, Investment and Rights series | en français

Le code minier du Mali et directive C/DIR3/05/09 de la CEDEAO, various authors (2011), GERSDA: Université de Bamako 

Investment contracts and sustainable development: How to make contracts for fairer and more sustainable natural resource investments, Lorenzo Cotula (2010), IIED, Natural Resource Issues series

Legal tools for citizen empowerment: Increasing local participation and benefit in Mali’s mining sector, Amadou Keita, Moussa Djire, with Kadari Traoré, Kader Traoré, Djibonding Dembelé, Arouna Dembelé, Mamadou Samassekou, and Moussa Doumbo (2008), IIED, Land, Investment and Rights series

Social responsibility agreements in Ghana’s forestry sector, Dominic M. Ayine (2008), IIED, Land, Investment and Rights series

Legal empowerment for local resource control: Securing local resource rights within foreign investment projects in Africa, Lorenzo Cotula (2007), IIED, Land, Investment and Rights series

Further resources

‘Land grabbing’ and international investment law: toward a global reconfiguration of property?, Lorenzo Cotula (2016), Oxford University Press (book chapter)

Human Rights and Investor Obligations in Investor-State Arbitration, Lorenzo Cotula (2016), Brill (journal article)

Expropriation Clauses and Environmental Regulation: Diffusion of Law in the Era of Investment Treaties, Lorenzo Cotula (2015), Wiley (journal article)

Property in a shrinking planet: fault lines in international human rights and investment law, Lorenzo Cotula (2015), International Journal of Law in context, Journal article 

Do investment treaties unduly constrain regulatory space?, Lorenzo Cotula (2014), Questions of International Law, QIL 9, 19-31 

Reconfiguring investment contracts to promote sustainable development, Lorenzo Cotula and Kyla Tienhaara (2014), book extract

The New Enclosures? Polanyi, international investment law and the global land rush, Journal article

‘Land grabbing’ in the shadow of the law: legal frameworks regulating the global land rush, Lorenzo Cotula (2012), book extract

Human rights, natural resource and investment law in a globalised world: Shades of grey in the shadow of the law, Lorenzo Cotula (2011), Routledge

Regulatory takings, stabilisation clauses and sustainable development, Lorenzo Cotula (2008), Global Forum on International Investment, journal article

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Responsible investment provisions in international investment treaties: where next?, 16 October 2017

Law in the natural resource squeeze: ‘land grabbing’, investment treaties and human rights, 13 October 2016 (Q&A)

Commodity cycles, economic treaties and pressure on land rights, 22 May 2016

How investment treaties protect ‘land grab’ deals, 17 February 2016

Opening up land contracts, 20 October 2015

Investment treaties and citizens’ power: lessons from experience, 7 September 2015

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The rise of civil society advocacy on investment treaties in Malaysia and the Philippines, 26 March 2015  

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Europe’s controversial TTIP: The good, the bad and the unnecessary, 10 July 2014

Investor-state arbitration: Lessons from civil society advocacy, 19 May 2014

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