Key points:

International investment law is a body of law that regulates the treatment of foreign direct investment and foreign investors.

It is relevant to WHO FCTC implementation because:

  • It includes obligations that may overlap with the kinds of regulations states can implement in relation to the FCTC
  • The tobacco industry has frequently threatened to use, and on two occasions has actually used, investment treaties to challenge states’ WHO FCTC implementation
  • It is important for parties to consider their interests regarding public health when negotiating or amending investment treaties.

The COP has made a number of statements on the links between the WHO FCTC and international investment law.

 

1. What is international investment law?

International investment law is the field of international law that governs relationships between states and foreign investors.

Unlike WTO law, the system of international investment law has no central treaty or institution. This field of law comprises more than 3200 bilateral investment treaties (BITs) and investment chapters in preferential trade agreements (collectively referred to here as investment treaties). These treaties are supplemented by an unknown number of investment contracts between governments and foreign investors, as well as domestic investment legislation.

Investment treaties aim to attract foreign investment in order to promote economic development, by providing foreign investors and their investments with certain protections, including some protections that go beyond those available to domestic investors. These may include obligations on the home state to not expropriate property, not to discriminate against the investor, and to provide ‘fair and equitable’ treatment to the investor. Investment treaties frequently permit foreign investors to directly bring legal challenges against the government of the state in which their investment is held, through a process known as investor-state dispute settlement (ISDS). 

The obligations of governments under international investment law vary depending on the provisions of the relevant treaty. However, certain concepts are common to the majority of investment treaties. Investment tribunals are not required to follow decisions of prior tribunals, but in practice, tribunals often rely on the decisions of earlier tribunals, including decisions made in relation to other investment treaties. 


2. What is the relevance of international investment law to WHO FCTC implementation?

Obligations under international investment law apply to a range of state action, including regulatory and tax measures. As such, they may have implications for the adoption of such measures to implement the WHO FCTC.

In recent years, tobacco companies have used international investment law arguments to prevent, delay or weaken the implementation of the WHO FCTC. These include launching (unsuccessful) litigation against tobacco packaging and labelling measures implemented by Australia and Uruguay, as well as threats to bring claims against other countries. These threats are invariably without legal merit.

Understanding the relationship between WHO FCTC and international investment law can give parties confidence to move forward with strong WHO FCTC implementation in the face of threatened litigation, as well as help them implement the WHO FCTC in a way that will be both effective and robust against the possibility of litigation.

Understanding the relationship between international investment law and the WHO FCTC can also help parties to ensure that their interests in public health are represented when they negotiate or amend new investment treaties, and encourage better multisectoral coordination and cooperation both within parties and internationally.


3. COP decisions on the WHO FCTC and international investment law

Since COP4, the COP has adopted a number of decisions on trade, investment, and the WHO FCTC. These include:

  • The Punta Del Este Declaration on the Implementation of the WHO Framework Convention on Tobacco Control (Decision COP 4(5)) – which recognises that ‘measures to protect public health, including measures implementing the WHO FCTC and its guidelines fall within the power of sovereign States to regulate in the public interest, which includes public health’ and declares that ‘Parties have the right to define and implement national public health policies pursuant to compliance with conventions and commitments under WHO, particularly with the WHO FCTC’
  • Decision COP5(15): ‘Cooperation between the Convention Secretariat, the World Health Organization, the World Trade Organization and the United Nations Conference on Trade and Development’, which asked the Secretariat to ‘continue its information sharing activities involving the WHO Secretariat, the WTO Secretariat and UNCTAD in relation to tobacco control, international trade and investment issues’
  • Decision COP6(18): ‘Issues related to implementation of the WHO FCTC and settlement of disputes concerning the implementation or application of the Convention’, which asked the Secretariat to ‘facilitate the provision of technical support, training and capacity building activities if necessary, in respect of legal challenges to implementation of the Convention’ as well as to facilitate information-sharing between parties ‘with regard to legal challenges against their tobacco control measures in domestic courts or through international dispute settlement mechanisms’
  • Decision COP6(19): Trade and investment issues, including international agreements, and legal challenges in relation to implementation of the WHO FCTC, which encouraged parties ‘to cooperate in exploring possible legal options to minimize the risk of the tobacco industry making undue use of international trade and investment instruments to target tobacco control measures’
  • Decision COP7(21): Trade and investment issues, including agreements, and legal challenges in relation to the implementation of the WHO FCTC, which called on parties to ‘increase, as appropriate, coordination and cooperation between health and trade/investment departments, including in the context of negotiations of trade and investment agreements’