The MyanmarJapan Bilateral Investment Treaty

The report analyzes the Myanmar–Japan Bilateral Investment Treaty (BIT), signed December 15, 2013. It finds that the treaty provides more expansive protections to Japanese investors than Myanmar's recent ASEAN treaties, the EU, or the US. Key concerns include the 'fair and equitable treatment' (FET) clause and an 'umbrella clause' that could make Myanmar liable for contractual changes. The report also notes inconsistencies between the BIT's liberalization commitments and Myanmar's national laws, particularly in the tourism and seed sectors, and warns that these obligations are enforceable through investor-state arbitration.

• The Myanmar–Japan BIT provides more expansive protections to foreign investors than recent treaty practices of the EU, the United States, and ASEAN, which restricts Myanmar's ability to revise laws and increases the risk of successful legal claims.
• Article 13 of the BIT requires compensation for 'indirect expropriations' (measures equivalent to expropriation), lacking the general clarifications found in newer treaties that protect legitimate public interest regulatory measures.
• The 'fair and equitable treatment' (FET) obligation in Article 4(1) is highly controversial and may obligate Myanmar to compensate investors for policy changes that would not be subject to compensation under the Myanmar constitution.
• The treaty includes an 'umbrella clause' in Article 4(2) that may convert simple contract breaches into treaty breaches, potentially making Myanmar liable for amending fiscal terms or adding environmental audits to existing contracts.
• The BIT's national treatment obligations in Article 2(1) conflict with Myanmar's national laws; specifically, the treaty appears to preclude Myanmar from requiring joint ventures in the tourism and seed production sectors, despite such requirements existing in national law.
• Article 6 prohibits performance requirements, which may limit Myanmar's ability to use local content requirements to maximize positive spillovers from foreign investment, although exceptions exist for research, development, and worker training.
• Under Article 18, Japanese investors can use international arbitration to enforce both protection and liberalization provisions, with few conditions and limited mandatory transparency compared to recent US or UNCITRAL trends.

APA

Bonnitcha, J. (2014). The MyanmarJapan Bilateral Investment Treaty. International Institute for Sustainable Development. https://www.iisd.org/system/files/publications/myanmar-japan-bilateral-investment-treaty.pdf

Chicago

Bonnitcha, Jonathan. The MyanmarJapan Bilateral Investment Treaty. International Institute for Sustainable Development, 2014. https://www.iisd.org/system/files/publications/myanmar-japan-bilateral-investment-treaty.pdf.

Wikipedia

{{cite report |last1=Bonnitcha |first1=Jonathan |title=The MyanmarJapan Bilateral Investment Treaty |publisher=International Institute for Sustainable Development |date=March 2014 |url=https://www.iisd.org/system/files/publications/myanmar-japan-bilateral-investment-treaty.pdf |access-date=23 October 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bonnitcha2014myanmarjapan, author = {Bonnitcha, Jonathan}, title = {{The MyanmarJapan Bilateral Investment Treaty}}, institution = {International Institute for Sustainable Development}, year = {2014}, month = mar, url = {https://www.iisd.org/system/files/publications/myanmar-japan-bilateral-investment-treaty.pdf}, urldate = {2026-10-23}, note = {Indexed by Climate Insights Directory} }