Bilateral investment agreements: Agents of new global standards for the protection of intellectual property rights?
by Carlos M. Correa
(August 2004)
Why this study?
In late 2003, GRAIN approached Professor Carlos Correa, who teaches at the University of Buenos Aires, to help us explore whether and how bilateral investments treaties (BITs), and bilateral, regional or plurilateral free trade agreements (FTAs) containing chapters on investment, were surreptitiously raising standards of intellectual property protection at the global level. This question is not a speculative one, yet we were lacking solid legal analysis.
BITs take root in Friendship, Commerce and Navigation treaties of old, which laid out rules on the entry and treatment of foreign nationals between cooperating countries. Those gave way to the modern BIT after World War II, and slowly broadened to cover a spectrum of rights for investors wanting to establish business activities in foreign countries. Since the 1980s, the number of BITs in the world has literally mushroomed. There are over 2,200 of them now, concluded between all types of countries. However, the BITs between developed and developing countries are the most far reaching, as they are commit developing countries to provide the same opportunities for the pursuit of profit that transnational corporations enjoy in their home states. In more recent years, developed countries have further expanded and refined the terms of their BITs, and started incorporating the main provisions into free trade agreements as well.
Today, BITs, and the FTAs that contain investment chapters, provide astonishingly broad privileges to companies out to make money in an increasingly globalised world -- bolstered by the right to directly sue governments if anything goes wrong. [1] Under these agreements, intellectual property rights are explicitly considered investments . Therefore, the rights generally attached to investments under these accords specifically apply to gene patents, plant breeders' rights and the like.
The exact terms of BITs, and of investment chapters in FTAs, can seem a bit esoteric. (For example, what are "the highest international standards" of intellectual property protection that signatory countries commit to ensure?) Additionally, how their provisions may play out with respect to other laws, like contract law, is not always easy to see. Further, they rely on a special approach to dispute settlement, usually based on private arbitration. Considering that more and more countries are expanding their IPR systems to encroach upon the basis of farming cultures, like seeds and indigenous knowledge, we felt it was crucial to understand what these investment agreements really hold in store.
The inquiry Professor Correa undertook examines current BITs in relation to possible intellectual property claims over biological diversity and related knowledge in developing countries. His findings give ground to people's concerns. Through a stealthy patchwork approach, industrialised countries are establishing a new landscape of very broad powers for their corporations to control the vaguest expression of private business interests [2] -- including rights to biological diversity.
We hope that this background study will be useful to people who want to look into the terms and twists of investment agreements today, as well as to those who are struggling to understand how different laws and policies are weaving a vast corporate net over the very basis of farmers' and rural communities' livelihoods. Special thanks go to Chee Yoke Ling of Third World Network (Malaysia) and Aziz Choudry of GATT Watchdog New Zealand (Canada) for their helpful reviews of the draft.
In September, we hope to publish a completely separate and independent account of what this all means in a broader political perspective.
[|] See GRAIN, The disease of the day: acute treatyitis , May 2004, http://www.grain.org/briefings/?id=183
[2] See Aziz Choudry, We must mobilise against a miasma of mini-MAIs , ZNet Commentary, 21 June 2001 , http://www.zmag.org/sustainers/content/2001-06/21choudry.htm