The Negotiations of the OECD Draft Convention on the Protection of Foreign Property: Unpacking the Early Blueprint of International Investment Agreements

Two multilateral processes marked the formation and consolidation of modern ­international investment law: the 1965 ICSID Convention and the 1967 Organisation for Economic Co-operation and Development’s (OECD) Draft Convention on the Protection of Foreign Property. While the former has attracted significant attention, the latter remains largely unexplored despite its influence over bilateral treaties and the literature. This article draws on several archives to unearth the confidential negotiations that led to the 1967 OECD draft. Unlike studies of bilateral investment treaties, the negotiations at the OECD were dominated by the tensions between capital-exporting and capital-importing countries and focused on important legal questions that continue to worry experts and negotiators today, such as the notion of investment, corporate nationality, customary international law, exceptions, the transfer of funds and investor-state dispute settlement (ISDS). The OECD negotiations show the significant role of business groups, the sometimes conflicting interests of capital-exporting states and the main concerns of capital-importing states. The latter were less interested in standards of protection and ISDS, focusing instead on limiting protection to productive investments and demanding the inclusion of investor obligations and a stronger derogations/exceptions clause.