The European Commission pledges an initial 1 million euro in support of the program
Leading legal firms worldwide commit to partner with the program
IDLO has undertaken responsibility for implementing a new, multi-dimensional Investment Support Program for the Least Developed Countries (ISP/LDCs). The program was developed by the UN Office of the High Representative for the Least Developed Countries, Landlocked Developing Countries and Small Island Developing States (UN-OHRLLS) in cooperation with IDLO, against the backdrop of the renewed recognition in the 2030 Agenda of the critical role that foreign direct investments can play in the development of the LDCs, the capacity differential that currently prevails in the ability of countries and firms to negotiate fair and sustainable investment agreements in the long term interest of all partners, and the strong call in the UN Program of Action for the LDCs to enhance support initiatives in these areas.
In response to this call, the design of the program has a number of distinctive features in relation to both coverage and modalities of operation as well as with respect to the definition of the program’s beneficiaries. It envisages the provision on demand of legal services in relation to negotiations of investment contracts and agreements as well as to investment-related dispute resolution, and provides for complementary training and capacity building support.
As for modalities of operation, the program is to make available, upon request, legal and supporting expert services specifically tailored to individual requests and circumstances, drawing on a roster of legal firms and experts committed to partner with the Program on a pro-bono or reduced fee basis.
The program was developed in the context of special measures mandated by the United Nations for the LDCs. As such, the program is dedicated exclusively to developing countries designated by the General Assembly as LDCs, but extends also to firms with significant resource limitations.
The program was presented at the UN at a special event held on September 22, 2017 during the week of the Heads of State / Government “General Debate” at the UN General Assembly. The event was co-chaired by the High Representative for the LDCs, Under Secretary General Fekitamoeloa Katoa ‘Utoikamanu and the Director-General of IDLO, Irene Khan, who also moderated the interactive debate during the opening high level segment of the event. Subsequent expert panel discussions were moderated by Hassan Cisse, a member of IDLO’s Board of Advisers.
The event featured a keynote by the Vice-President of the International Court of Justice Abdulqawi Ahmed Yusuf and addresses by the Minister of Trade, Regional Integration and Employment of the Republic of the Gambia and the Minister of Planning, Investment and Economic Development of Somalia. It was attended by over 200 participants that included representatives of the 47 LDCs from both capital and New York missions, LDCs’ development partners, the legal community, international organizations, academia and civil society.
Opening the event, the High Representative for the LDCs highlighted the “capacity asymmetry” that currently prevails between host LDC countries and investors in contract negotiations; outlined the main features of the initiative; and presented IDLO as uniquely well placed to undertake responsibility for the new program.
Her statement was followed by a keynote address by Judge Yusuf who illustrated the challenges faced by LDCs in the negotiation and conclusion of investment agreements and in the settlement of disputes, particularly through arbitral tribunals; and, welcoming the ISP initiative, stressed the importance of a concerted effort to build and sustain national capacities in collaboration with existing regional training facilities.
Judge Yusuf’s address set the tone for the ensuing discussion with three themes especially resonating:
- A confirmation of the strong interest and support that the program can count on from both the LDCs and its development partners;
- The need to ensure that a concern for long-term capacity building pervades the conduct of the advisory services to be extended under the ISP and all aspects of the program; and
- The imperative to pursue the program in the context of the broader challenges facing the current system of international investment agreements.
The Director-General for International Development of the European Commission announced the decision to set aside an initial contribution of 1 million euro in support of the ISP; called on other donors to join the EU in supporting the program financially; and placed EU support in the context of European policies and commitments, such as the new EU External Investment Fund, geared to the achievement of the goals of Agenda 2030, and of the EU commitment to keep the needs of the LDCs at the center of EU’s development policies and help bring private investment to bear where it is most needed.
These sentiments were echoed by the Representative of Italy who stressed the key role that private sector investments play as sources of financing of sustainable development; recalled how good and fair regulations and contracts are to the advantage of all and contribute to upholding the rule of law; and reiterated that his Government will continue to support the program and looked forward to the support of other donors, legal scholars and other experts working together to make the program a success.
Ministers from Somalia and the Republic of Gambia expressed strong interest in availing themselves of ISP services; and highlighted the timeliness of the initiative in relation to the development and investment priorities currently being pursued by their respective governments. The Representatives of Bangladesh and Eritrea similarly illustrated the needs that the program is intended to serve. The Representative of Cambodia, like the Ministers of Somalia and Gambia, indicated his government’s intention to call in ISP’s services.
Intervening in the debate, the Representative of UNCTAD stressed the “important gap” that ISP is being called upon to fill and the “large demand” that exists for its services, and placed UNCTAD’s offer of cooperation with the program in the context of current efforts being supported by UNCTAD to promote reforms in the international investment regime and to build capacities in developing countries especially in the LDCs to enable it to serve effectively sustainable development objectives.
The intention to support and cooperate with the Program was also highlighted on behalf of the Permanent Court of Arbitration and the International Chamber of Commerce.
Summing up the debate, the Director-General of IDLO, Irene Khan, recalled that her organization was born out of the realization of the capacity gap in developing countries on legal issues and of the importance of investing in law in order to promote development – a realization now codified in terms of policy in Goal 16 of the 2030 Agenda for Sustainable Development. Working on the ground in a number of LDCs around the world, she said, IDLO has witnessed the imbalance between international investors on the one hand, and governments or private sector entities in those countries on the other: “Whether it is in the context of the extracting industry in Sub-Saharan Africa, or in relation to arbitral proceedings for example in Asia, we have seen a limited number of government lawyers sit across the table from variable armies of experts and well resourced international law firms on the other side… There is clearly an imbalance of arms in these situations.”
The Director-General recalled that 47 LDCs have a combined population of almost a billion people and comprise of the poorest populations of the world, in spite of the great potential they possess in terms of human capital and natural resources. “The Initiative being presented today was conceived as an integral part of the effort to help unlock that potential,” she stated. Law alone, she pointed out, is not the answer to all problems of trade and investment in the LDCs; it can however play a significant role.
The Director-General then went on to outline some of the most innovative features of the program: the fact that it had been conceived as a genuine public-private partnership; its design as a “bespoke service,” tailored to meet the specific and diverse needs of LDCs – needs to which the Program, responding to requests from recipient countries would aim to provide “contextually relevant and locally owned responses”; and the intention to ensure that, while seeking to respond to immediate needs , the program, in all its components, would be geared to build and strengthen local capacity and expertise for the longer-term, paying particular attention to supporting businesses owned by women as well as individuals from other marginalized and excluded groups.
She concluded by pointing to a number of key differences in the current situation, as compared to that prevailing in past decades, that augured well for the success of the program: the different environment that now exist for development, with trade and investment currently at the heart of development policy; the fact that the LDCs themselves are aware more than ever before of the need to build legal capacity; a much stronger commitment to sustainable development on the part of the private sector; and, last but not least, the new international consensus that has emerged around the policy framework set in the 2030 Agenda for Sustainable Development. Ultimately, success – she concluded – will depend on all of us working together: “This is a partnership not just of the High Representative’s Office and IDLO; it is a partnership involving the private sector organizations, the law firms, the management consultancies, and other business groups that want to join it. It is also a partnership with the LDCs themselves…This is a long journey on which we are embarking…. The 2030 Sustainable Development Agenda is about leaving no one behind. The LDCs cannot be left behind in this; we have to make this journey together.”
An initial list of international legal firms that have expressed interest in partnering with the program was circulated during the meeting.
The high-level segment of the event was followed by two expert panel discussions involving renowned legal experts and practitioners dealing with LDCs' support requirements in relation respectively to investment negotiations and dispute settlement. The debate and papers submitted by the expert panelists will be published by the UN and will feature in a forthcoming website dedicated to the Program.
In their annual ministerial meeting held in the afternoon of September 22, 2017 following this event, LDCs Ministers, in assessing recent developments concerning foreign direct investment flows to LDCs, expressed appreciation for the initiative “aiming at providing legal and technical support to LDCs in investment-related negotiations and dispute settlement and at providing the capacity of the investment promotion agencies of LDCs to attract, diversify and retain foreign direct investment and derive maximum benefit from it.”
For a fuller summary of the debate during the high-level segment of the event please click here.