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UK-Colombia Bilateral Investment Treaty

It is a great pleasure to serve under your chairmanship this afternoon, Mr Hollobone, and I congratulate the right hon. Member for East Ham (Stephen Timms) on securing the debate. The right hon. Gentleman has a long-standing interest in such issues, as evidenced in his declaration in the Register of Members’ Financial Interests about his activities with Traidcraft, to which he alluded.

The Government’s aim in developing bilateral investment treaties is to provide a high level of protection for companies from one country that invest in the other country. In particular, we aim to ensure that British

investors in a country with which we have a bilateral investment treaty will receive equal treatment compared with other foreign and domestic investors.

In general, the UK Government believe that such treaties have a positive impact, protecting investors against unfair expropriation and mistreatment, and encouraging investment. As the right hon. Gentleman said, however, bilateral investment treaties need to strike the right balance between providing protection for investors and giving Governments the space that they need to regulate in the public interest. The UK aims to achieve that balance in its treaties and, now that competence for foreign direct investment has transferred to the European Union, in treaties concluded by the EU.

To begin addressing some of the comments and questions of the right hon. Gentleman, increasing transparency in governance at home and internationally is a priority for the Government. Next week, I am pleased to say, we will be hosting the Open Government Partnership summit here in London, and that will be a key theme. We have also pushed for greater openness in investment arbitration, and I am pleased that new UN rules on transparency will enter into force next year. The hon. Member for Wigan (Lisa Nandy) made an intervention about redress in particular, but we will write to her with a fuller answer.

In response to the related concern about giving away privileges to distant tribunals, while the system is clearly not perfect—hence, for example, our work on transparency—overall we see such tribunals as positive. They have long been a feature of the international system and are considered generally to provide a dependable way for investors to achieve justice, where it cannot be achieved through the domestic legal system of the country in which they have invested. The tribunals are, therefore, important to guaranteeing investors’ rights and to preserving stable investment climates, which, in turn, help to encourage economic development. Without access to an international tribunal, such benefits would be lost. Furthermore, if we did not have tribunals, what should replace them? The right hon. Gentleman did not answer that question in his speech—I am happy to accept an intervention, should he wish to make one.

The right hon. Gentleman asked whether the Government intend to review their policy on investment protection. As I have mentioned, competence for foreign direct investment has now transferred to the EU. Since that transfer in 2009, the UK has not negotiated any new treaties. It retains the right to do so, but it has no immediate plans to negotiate new treaties. It does not, therefore, make sense for the UK to launch a full-scale review of our policy on such matters at present. That said, I reassure him that, in ongoing EU negotiations, we are pushing hard to achieve that important balance—guaranteeing fair treatment for investors, without an adverse impact on Governments’ rights to regulate in the public interest. That is also a principle that we will apply in any new treaties that the UK negotiates.

Our intention is to place before Parliament shortly a ratification instrument that will bring the UK-Colombia bilateral investment treaty into force. We believe that the treaty broadly achieves the right balance. Indeed, it includes specific provisions designed to preserve the right of the UK and Colombia to regulate for “reasons of public purpose”.