Further supplementary
memorandum submitted by the Department of Trade and Industry
RESPONSE TO WRITTEN QUESTIONS FROM THE COMMITTEE
1. What assessment did DTI make of the
costs involved in establishing and maintaining the dispute settlement
mechanism envisaged by the OECD draft MAI; the likely costs of
actions brought under state-to-state procedures of the MAI; and
the likely division of those costs between national and local
governments, in the event of an investor taking action against
the UK because of the activities of a sub-national government
body?
No new mechanisms for the settlement of disputes
were established under the MAI. The MAI provided for unconditional
consent by the contracting parties for access by fellow contracting
parties or their investors to dispute settlement mechanism provisions.
The provisions on investor-to-state dispute settlement envisaged
a choice between already established arbitration options, namely
arbitration through the International Centre for the Settlement
of Investment Disputes (ICSID), or under United Nations Commission
on International Trade Law (UNCITRAL) or the International Chamber
of Commerce (ICC) rules. No new costs would be involved in establishing
or maintaining this system: costs only arise when an actual case
arises and an arbitration tribunal has to be constituted. The
state-to-state arbitration provisions envisaged the creation of
an ad hoc tribunal operating under rules set out in the MAI, supplemented
by the Permanent Court of Arbitration Optional Rules for Arbitrating
Disputes between Two States: again no costs arise until there
is a case.
2. What involvement has DTI had with
the WTO's Working Party on Trade and Investment and similar activities
being undertaken within UNCTAD?
DTI, in consultation with other Government Departments
and with other EU Member States, is entirely supportive of and
therefore is playing a full part in the complementary work and
discussions on investment in UNCTAD and the WTO.
3. Where is the national contact point
with the OECD in the UK; and how many enquiries has it handled
from (a) government bodies, (b) non-governmental organisations,
(c) business and (d) the general public in the last year?
DTI Trade Policy and Europe Directorate is the
National Contact Point (NCP) for the OECD Guidelines for Multinational
Enterprises. In 1998 the NCP examined issues stemming from two
enquiries from non-governmental bodies relating to activities
of multinational enterprises outside the OECD area.
4. It would be helpful to have a list
of those countries with which the UK has signed an Investment
Promotion and Protection Agreement; and an indication of the typical
content of these Agreements.
A list of the UK's 90 Investment Promotion and
Protection Agreements (IPPAs) is attached together with a copy
of the model text on which all our negotiations are based.[1]
The UK model treaty and those of our EU partners are, in turn,
based on an OECD model.
5. Witnesses have suggested that the
restrictions on performance requirements proposed within the OECD's
draft MAI would have conflicted with the promotion of economic
development by local authorities under section 33 of the Local
Government and Housing Act 1989. We would welcome the DTI's comments
on this.
We have been in close contact with the Local
Government Association on their detailed points on the MAI, some
of which required further consideration. In general, however,
there is no reason for local authorities to discriminate on the
grounds of the nationality of an investor. Activities by local
authorities in support of local economic development are already
properly constrained by Community law on state aids and sections
34 and 35 of the Local Government and Housing Act 1989. We want
local authorities to be able to promote and enjoy the benefits
for their areas that inward investment can bring. Such investors
should obey the same laws and be subject to the same conditions—no
more and no less—as domestic companies.
6. What period of notice did the French
Government give the UK Government and other EU partners of its
intention to withdraw from the MAI negotiations at the OECD?
No formal notice was given in advance of the
French announcement on 14 October of their decision to withdraw
from the negotiations.
1 Annexes 1 and 2. Back
| 
