Briefings The Case for Reform of UK BITs – short briefing for MPs
The Case for Reform of UK BITs – short briefing for MPs
Bilateral Investment Treaties (BITs) are binding agreements between two countries. They offer protections to international investors that are not available to domestic companies or citizens.
Like the mechanism proposed for the Transatlantic Trade and Investment Partnership (TTIP), BITs contain an Investor-to-State Dispute Settlement (ISDS) mechanism which allows investors to sue governments in international tribunals if they believe a policy undermines the profitability of their investment. Cases can cost millions, sometimes billions of dollars. There is growing evidence that the fear of facing a case deters governments from taking legitimate policy decisions in relation to important sectors such as health and energy.
The UK is a global leader in investment protection. It has the second highest number of treaties and at least 48 cases have been initiated by UK companies. Yet UK agreements are out of date: they have not kept pace with global reform trends, nor have they been updated to bring them in line with human rights and environmental commitments. Most UK BITs have reached their ‘anytime termination phase’, and therefore could be cancelled. The UK must show global leadership by undertaking an urgent review and reform of the protections it offers to international investors.