Towards A Sustainable Investment Framework: Legal Tools for Effective Investment Facilitation

Аннотация

This article explores the evolving concept of investment facilitation as a crucial legal and policy tool to support sustainable development. While investment promotion traditionally focuses on marketing a location as an attractive destination for foreign direct investment (FDI), investment facilitation seeks to reduce unnecessary regulatory and administrative barriers to ensure smooth entry, operation, and retention of investment. The study highlights how effective facilitation strategies must move beyond investor-centered approaches to align with environmental, social, and developmental goals. It examines national, regional, and international governance tools, with particular attention to Brazil’s innovative model of Cooperation and Facilitation Investment Agreements (CFIAs), which emphasizes institutional support over investor–state dispute settlement. The article also analyzes ongoing WTO negotiations on a multilateral framework for investment facilitation and the tensions between soft law cooperation and binding obligations. By integrating legal, administrative, and policy perspectives, the paper provides a structured roadmap for policymakers to develop investment facilitation strategies that are transparent, inclusive, and tailored to advance sustainable development outcomes at all levels. Keywords: Investment Facilitation, Investment facilitation for sustainable development, UNCTAD’s Perspective, OECD Framework, Implementation Levels, Brazil’s model, WTO Structured Discussions. international collaboration can also play a crucial role Introduction: Overall, Investment promotion is about in tackling broader governance challenges. promoting a country (or location within a country) as an investment destination. Investment facilitation Furthermore, addressing collective action challenges is focuses on minimizing unnecessary obstacles that essential for advancing investment facilitation in investors might encounter when setting up, growing, or support of sustainable development, though operating their businesses. determining the most effective level of intervention and appropriate tools remains complex and uncertain. As this study suggests, Investment facilitation for Policymakers should assess whether cooperative, non- sustainable development refers to a set of instruments, binding ('soft') approaches or binding, rules-based policies, and procedures designed to create a ('hard') measures are better suited to resolving these regulatory and administrative environment that issues. supports investment aligned with, and not detrimental to, sustainable development goals. The effective This article provides Brazil's new model as an instance. implementation of each measure may vary depending This model marks a change in approach to international on the context—it can be most appropriately applied at investment agreements, emphasizing enhanced the national, regional, or global level, and may involve coordination and dialogue to better facilitate actors such as the investor’s home country, the host investment between the treaty partners. country, individual investors, bilateral or multilateral Also noteworthy is to mention that The WTO is partnerships, or international organizations. While currently developing an agreement on investment many regulatory aspects of investment facilitation for facilitation, but the final framework—including the sustainable development are most effectively extent of any binding obligations—remains undecided. addressed at the national level, regional and International Journal of Law And Criminology 81 https://theusajournals.com/index.php/ijlc International Journal of Law And Criminology (ISSN: 2771-2214) What are investment promotion and investment Development (OECD), through its Policy Framework for facilitation? Investment, also approaches investment facilitation as part of a broader policy strategy. According to Novik Investment plays a vital role in advancing sustainable and de Crombrugghe (2018), governments should aim development. When properly managed, foreign direct to create an investment-friendly environment that also investment (FDI) can drive economic growth, raise enhances the developmental benefits for society as a living standards, generate employment, facilitate the whole. transfer of technology and expertise, and enhance supply chains. However, these positive outcomes are Consequently, investment facilitation is no longer not guaranteed—if poorly regulated, investment can viewed solely from an investor-focused perspective. It lead to environmental damage, poor labor practices, now includes critical priorities such as environmental tax avoidance, and other negative consequences. sustainability, local economic and social development (including support for women entrepreneurs), To maximize the benefits of FDI, countries rely on industrial advancement, employment and workforce investment promotion and facilitation. Though closely training, protection of human rights, public