ARecognised Sustainable Investor (RSI) category could consist of three main parts: • First, it would establish basic criteria that all investors must meet to qualify as an RSI. • Second, itwould allow for country specific FDI sustainability characteristics, established by each host country, which investorswould commit themselves to use reasonable best efforts to ensure that their investments fulfill. • Third, it would grant special benefits to those investors qualifying as RSIs, beyond those generally available to all foreign investors.

increasingly important. This is so, because the contract

terms have important implications for years – if not decades – to come for the three principal parties of the investment process: for host coun- tries, because they determine the benefits they obtain from FDI and, hence, their development impact; for MNEs that often invest billions of dollars in these projects, because their long-termsurvival may depend on the performance of these projects; and for home countries, because their economies may depend to a certain extent on the output of these projects and, in any event, the successful performance of their international investors. Well- negotiated contracts that seek a fair distribution of the benefits associ- ated with the projects they cover are likely to be more stable and there- fore in the interest of all parties. However, negotiating equitable

and lasting contracts between MNEs and host country governments is a considerable challenge for many developing countries. Contracts typi- cally involve complex negotiations requiring a range of expertise, including lawyers experienced in the negotiations of such contracts; financial analysts and modellers; environmental experts; and special- ists in the international markets of, for example, the minerals covered in contracts. International investors typically have this expertise and are well-resourced; many developing countries – and especially the least developed among them – simply do not have that expertise and resources to get such contracts right. Arriving at well-negotiated

contracts requires therefore that assistance is provided to under- resourced developing countries. Such assistance exists, but only to a very limited extent. For example, because of limited resources, the Connex Support Unit concentrates largely on extractive industry projects and related infrastructure. Beefing up contract negotiations support is therefore important, to arrive at mutually satisfactory (and therefore more stable) contracts, and countries in a position to do so should provide such support.

Facilitating sustainable FDI Restarting the world economy – and especially the economies of most developing countries – will require massive investment, including FDI.


A multilateral Investment Facilitation Framework for Development (IFF4D) can make an important contribution in this respect. Such an agreement is being negotiated in the World Trade Organization since September 2020, focusing on concrete measures that make it easier for investors to estab- lish themselves in host countries and operate within them, hopefully thereby increasing FDI flows that advance economic growth and development. This approach is, of course,

understandable. But it begs the ques- tion of whether it might be possible to include in an IFF4D not only measures that facilitate FDI flows, but also measures that directly help to increase the development impact of the investment that host coun- tries receive. One way in which this can be

done is to include in an IFF4D concrete measures that focus on facilitating sustainable FDI (the ITC and DIE have published a compre- hensive inventory of such measures). For example, it could encourage the establishment of linkage/supplier- development programmes in host countries (for the reasons outlined earlier). It could also create the cate- gory of the Recognised Sustainable Investor and allow WTO members to let such investors benefit from addi- tional investment-facilitation meas- ures. Bestowing the status of Recognised Sustainable Investor on eligible foreign investors would also be an incentive that can be offered, on their own, by individual coun- tries interested in increasing the benefits of FDI for their economies. The key of such measures is to stim- ulate sustainable FDI for sustainable development. Host countries and home coun-

tries shouldmake a joint effort to see to it that an eventualWTOagreement helps not only to stimulate FDI flows, but also helps to increase its direct development contribution of such investment in host countries. Meeting this challenge is important not only with respect to theWTOnegotiations: future investment treaties can be expected to include provisions on investment facilitation, as already seen in the RegionalComprehensive Economic Partnership Agreement and negotiations underway with African countries. IPAs can advance this agenda in

many ways. August/September 2021

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