Lisbon's Legacy: Increased Democratic Accountability and Centralized Governance in EU International Investment Policy

• Author: Julia Johnson
• Position: J.D., Duke University School of Law.
• Pages: 81-109

Lisbon’s Legacy: Increased Democratic

Accountability and Centralized Governance in

EU International Investment Policy

J

ULIA

J

OHNSON

*

“We need a structure that can accommodate the diversity of its members – North,

South, East, West, large, small, old and new. Some of whom are contemplating

much closer economic and political integration . . . . [But] with courage and

conviction I believe we can deliver a more flexible, adaptable and open European

Union in which the interests and ambitions of all its members can be met.”

-David Cameron

1

I. Introduction

The Lisbon Treaty (Lisbon),

2

which entered into force on December 1,

2009,

3

has already changed international investment law and policy in the

European Union (EU). Tellingly, EU and non-EU nations are beginning to

enter into different forms of investment relationships. Such alterations in

investment relationships will extend to bilateral investment treaties (BITs).

4

Albeit slowly and inconsistently, Lisbon has begun to alter global investment

patterns both inside and outside the EU by consolidating the EU’s

governance structure and leading to the implementation of shared policy

goals.

5

Lisbon has bolstered the governance structure of the EU—overseen and

operated by the European Council (EC) and European Parliament (EP)—

and has begun paving the way for a common European investment policy. A

* J.D., Duke University School of Law.

1. David Cameron’s EU speech - full text, T

HE

G

UARDIAN

(Jan. 23, 2013), https://

www.theguardian.com/politics/2013/jan/23/david-cameron-eu-speech-referendum.

2. Treaty of Lisbon Amending the Treaty on European Union and the Treaty Establishing

the European Community, Dec. 13, 2007, 2007 O.J. (C 306) 1 [hereinafter Treaty of Lisbon].

3. European Commission Press Release IP/09/1855, European Commission Welcomes the

Entry Into Force of the Treaty of Lisbon (Dec. 1, 2009) (“The Treaty of Lisbon amends the

current EU and EC treaties, without replacing them. It will provide the Union with the legal

framework and tools necessary to meet future challenges and to respond to citizens’ demands.”).

4. Sean Cumberlege & Bryan Neihart, Section 23:28 Bilateral Investment Treaty—Defining

Investment and Investor, 3 T

RANSNAT

’

L

B

US

. T

RANSACTIONS

§ 23:28 (last updated Aug. 2018)

[hereinafter Defining Investment and Investor] (explaining that a BIT “protect[s] the investment

of an investor in the territory of a host country”).

5. Carrie E. Anderer, Bilateral Investment Treaties and the EU Legal Order: Implications of the

Lisbon Treaty, 35 B

ROOK

. J. I

NT

’

L

L. 851, 876 (2010).

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82 THE INTERNATIONAL LAWYER [VOL. 52, NO. 1

common European investment policy, however, threatens BITs entered into

by individual EU Member States with third nations.

6

Some non-EU nations may not perceive the consolidation of EU

investment policy favorably, believing that their investors run a greater risk

of expropriation or otherwise limited returns.

7

These nations fear their

investors may not reap the intended benefits of their investments, leaving

them less likely to invest in the future.

8

Time will tell whether a unified

European investment policy under Lisbon will increase investment flows

through Europe and will improve the EU foreign direct investment (FDI).

But perhaps Lisbon’s most important function will be to enable European

nations to come together to reach common economic and social goals.

9

It is not yet clear how the EC and the EP will delegate the exclusive

competence granted by Lisbon.

10

Post-Lisbon, the EU must share

competence with Member States: i.e., Member States may pursue binding

acts only when the EU does not act on a particular issue.

11

Shared

competence restricts the capacities of Member States,

12

altering the balance

of power from a fragmented national system to a centralized continental

framework.

13

This shift to a centralized framework is likely to shape Europe’s

international investment policies. For example, the EP must consider a host

of factors, including a bevy of non-economic factors, in its policy decisions.

Such non-economic considerations are already beginning to materialize in

international investment policies.

14

Political, moral, and social issues—such

as human rights and environmental concerns, including climate change and

sustainable development—are likely to be featured more prominently in

future extra-EU BITs and in other more generalized investment policies.

15

Given the heightened stature of the EC and the EP, Member States are

more likely to accept and implement these non-economic policies, which

will in turn positively reform extra-EU BITs and develop a more

6. Id. at 875; Thomas Daemen, Why the European Union’s Lisbon Treaty Matters to In-House

Counsel, 28 No. 5 ACC Docket 88, 90 (2010).

7. Anderer, supra note 5, at 875.

8. Id.

9. Id. at 873.

10. See e.g., John R. Schmertz & Mike Meier, EU Publishes the Text of the Treaty of Lisbon and

Charter of Fundamental Rights on the European Union, 13 I

NT

’

L

L. U

PDATE

220 (2007).

11. FAQ on the EU competences and the European Commission powers, T

HE

E

UR

. C

ITIZENS

’

I

NITIATIVE

, http://ec.europa.eu/citizens-initiative/public/competences/faq#q1(last updated

Oct. 16, 2018) [hereinafter FAQ on the EU].

12. Id.

13. Id.

14. Erika Szyszczak, Building a Socioeconomic Constitution: A Fantastic Object?, 35 F

ORDHAM

I

NT

’

L

L.J. 1364, 1366, 1369 (2012) (“The new emphasis upon social values and the role of

solidarity is significant in a global economy increasingly leaning towards neoliberal values and

in a European economy heavily shaken by economic recession.”).

15. Id. at 1367, 1388.

THE INTERNATIONAL LAWYER

A TRIANNUAL PUBLICATION OF THE ABA/SECTION OF INTERNATIONAL LAW

PUBLISHED IN COOPERATION WITH

SMU DEDMAN SCHOOL OF LAW