Developing and Negotiating Based on a Model Investment Treaty

This briefing note provides background for an IISD webinar on the development and negotiation of model bilateral investment treaties (BITs). It examines why countries are revising their investment governance frameworks, the shift toward more transparent consultation processes, and the substantive changes in new-generation models aimed at protecting the right to regulate and promoting sustainable development.

• A surge in investment treaty arbitrations that peaked in 2015 has led many states to reconsider international investment governance. Responses include the termination of bilateral investment treaties (BITs), the exclusion of investor–state dispute settlement (ISDS) mechanisms, or the denunciation of the ICSID Convention.
• High-income, capital-exporting nations like Canada and the Netherlands are reviewing their model treaties. The Netherlands is the second most popular home state for ISDS claims after the United States, with 17.5 per cent of total claims made by allegedly Dutch investors despite the country being party to only 3 per cent of all investment treaties.
• Canada's 2004 model foreign investment promotion and protection agreement (FIPA) was primarily used for BITs with developing countries, specifically mineral-rich African nations. Since 2004, Canada has concluded 20 BITs and nine free trade agreements (FTAs) with 25 developing country partners, and Canadian companies have filed 45 lawsuits against governments, with one award against a developing country reaching USD 1.2 billion.
• Emerging economies are leading the creation of new-generation models. India adopted a comprehensive new model in 2016 after facing claims based on its 1993 model. Nigeria adopted a new model in 2016 to balance investor rights with sustainable development goals and the right to regulate, which served as the basis for the 2016 Nigeria–Morocco BIT.
• Brazil has avoided traditional BITs, instead developing Cooperation and Facilitation Investment Agreements (CFIA). These agreements protect only foreign direct investment, exclude protection against indirect expropriation, and replace ISDS with centralized mechanisms for grievances and state-to-state cooperation.
• Modern model BITs generally aim to achieve three goals: refining protection language to prevent broad arbitral interpretations that hinder public policy; integrating sustainable development elements such as human rights and environmental obligations; and limiting ISDS in favor of alternative dispute resolution.
• There is a trend toward more transparent and consultative processes for developing model treaties. Examples include Canada's public consultation, the Netherlands posting draft texts online, and India using the MyGov.in online platform. However, some consultations are criticized for focusing only on technical issues rather than fundamental questions.

APA

Brewin, S. (2018). Developing and Negotiating Based on a Model Investment Treaty. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/model-investment-treaty-webinar-note.pdf

Chicago

Brewin, Sarah. Developing and Negotiating Based on a Model Investment Treaty. International Institute for Sustainable Development, 2018. https://www.iisd.org/system/files/publications/model-investment-treaty-webinar-note.pdf.

Wikipedia

{{cite report |last1=Brewin |first1=Sarah |title=Developing and Negotiating Based on a Model Investment Treaty |publisher=International Institute for Sustainable Development |date=October 2018 |url=https://www.iisd.org/system/files/publications/model-investment-treaty-webinar-note.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{brewin2018developing, author = {Brewin, Sarah}, title = {{Developing and Negotiating Based on a Model Investment Treaty}}, institution = {International Institute for Sustainable Development}, year = {2018}, month = oct, url = {https://www.iisd.org/system/files/publications/model-investment-treaty-webinar-note.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }