One of the tools available to regulate FDI is through International Investment Treaties (IITs), which can be signed multilaterally or bilaterally between states. Developing countries sign IITs to attract foreign investment. An IIT is a legal instrument governing the terms of the FDI, including dispute settlement mechanisms. Depending on the wording and content of the IIT it can impact a broad range of government measures and public policy, including but not limited to:
- Environmental restrictions on the manner in which mining can take place
- Requirements for environmental impact assessments
- Regulations governing health insurance
- Regulations aiming to improve the economic situation of minority populations
Responding to a request from the Government of Myanmar, the UNDP-UNEP Poverty-Environment Initiative (PEI) together with the International Institute for Environment and Development (IIED) and the International Institute for Sustainable Development (IISD) organized two capacity building events focusing on IITs for Government partners in June 2014. Invitees from nine ministries and the parliament met to deepen understanding of IITs and the ways in which they link to sustainable development. Focus was placed on the potential costs and benefits of IITs for Myanmar.
A key message that emerged from the events was that Myanmar must decide what its policy objectives are in signing IITs. In light of current government reforms, careful consideration must be given to the protections and rights that will be granted to foreign investors and the liabilities or policy restrictions that the signing of IITs may imply, in particular within the context of the natural resources sector.