Research On Non-precluded Measures Provisions In International Investment Treaties

The Non-Precluded Measures Provisions (hereinafter NPM provisions), which permit thehost country to breach the investment agreement in order to protect national security, publicorder, public health and other benefits, are very important provisions in international treaties.NPM provisions are similar to the “general exceptions” and “security exceptions” in theGeneral Agreement on Tariffs and Trade (hereinafter GATT), General Agreement on Trade inServices (hereinafter GATS) and other WTO agreements. NPM provisions are "safety valves"in international investment agreements, they try to balance the interests of the host countryand the private interests of investors and play an important role in balancing the interests. U.S.,EU and other countries are active in bringing the NPM clauses into line with theirinternational investment agreements.In the international judicial practice, Argentina is famous because it was sued in theInternational Centre for Settlement of Investment Disputes,(hereinafter ICSID) many timesand all of the cases are about U.S.-Argentina Bilateral Investment Treaty,(hereinafter BIT)Section11(NPM provision). The ICSID arbitral tribunals give different judgments in thesimilar cases LG&E, Continental, GMS, Sempra and Enron. Some permit Argentina invokethe U.S.-Argentina BIT Section11, but the tribunal of Sempra and Enron not. In2010, theICSID special committee revoked these two cases on the grounds of ultra vires obviously,which aroused international attention again, and also highlighted the importance of NPMprovisions. However, in the international investment agreements of China, NPM provisionsare not prevalent, normative and lack of unified planning and arrangements. In this context, itis with strong theoretical and practical significance to research the NPM provisions ininternational investment agreements.In order to study the NPM provisions in international investment agreements, this thesis,first focus on the interpretation methods, elements and review criteria of the NPM provisions,then summary and analyze the NPM provisions in the perspective of the USA and theEuropean Union. After that, this thesis combined the Argentine case, tracking NPM provisionsin international judicial practice, make clear way of recognition and attitudes towards NPMprovisions by ICSID. Finally, it put forward sound proposals to NPM provisions ininternational agreements of China. Except the introduction, the thesis can be divided into five parts:The first part-NPM provisions analysis, include the interpretation, elements andstandard of review three aspects of the NPM provisions. Overall, the mainstreaminterpretation method of NPM provisions is "principle of autonomy" in the United States BITtemplate2012. And NPM provision elements can be divided into three aspects: the scope, thepurpose and the conjunctions. First, The NPM provisions can be divided into "full applicationtype" and "part of the applicable type" form the aspect of the scope. Second, the purpose ofNPM provisions are significant security interests, public order, and environmental protection.Third, the NPM provisions conjunctions will determine the size of the management rights ofthe host economy. As to the standard of review, good faith examination should be used toreview the self-ruled type NPM provisions, and the principle of the minimum limit should beapplied to the non-self-ruled type NPM provisions.The second part-NPM provisions in the U.S. international investment agreements. Thispart analyzes and summaries the NPM provisions in the U.S. BITs and North American FreeTrade Agreement (hereinafter NAFTA). Some of the NPM provisions are in the preamble ofthe agreements, some of them are independent part or in other forms. In this thesis, the authoranalyzes them in clue of time, reflect the changes of the NPM provisions in the U.S. BITsclearly. As to NAFTA, except the general "security exception" form, there also set up a special"environmental exceptions." With regard to these changes and developments, we should takea dialectical and comprehensive view.The third part-NPM provisions in the EU international investment agreements. Thispart summarizes the NPM provisions in the EU Free Trade Agreements (hereinafter FTA) andthe "EU Treaty". The NPM provisions of EU international investment agreements have thefollowing characteristics: first, the comprehensive-applicable type NPM provisions are inlarge number. Second, the NPM provisions’ mode have steady changed. Third, the provisionsare more refined. This thesis also summarized the NPM provisions in the "EU Treaty". Thentake public policy as an example to do an empirical analysis.The fourth part-ponder on the NPM provisions according to the revoke of the Argentinacases. This part make clear the importance of the NPM provisions in the perspective of theannulment decision of the ICSID special committee: first, BITs precedence over customaryinternational law, so NPM provisions also precedence over customary international law when applied. Second, NPM provisions don’t need to meet strict conditions like customaryinternational law when applied. Third, the defects of ICSID revocation mechanism alsounderscores the importance of NPM provisions in international investment agreements.The fifth part-NPM provisions in International Investment Agreements of China andproposals. This part inspects the NPM provisions in China’s FTAs and BITs, found that theseprovisions are prevalent in China’s FTAs but opposite in BITs. In view of this, on the onehand, China should pay more attention on NPM provisions, understand the situation offoreign investment and attract foreign investment in our country. China should make specifictarget and pay close attention to the practice about the NPM provisions in internationalinvestment arbitration. On the other hand, China should set more NPM provisions ininvestment agreements, it is a preventive measures to seize the initiative in the investmentdisputes we may face in the future.