International energy companies have long relied on a stable system of investor-state treaties to safeguard their rights around the world. These treaties generally contain protections for investors and access to investor-state dispute settlement (ISDS) before international arbitral tribunals. However, the global investment landscape is shifting, requiring businesses to rethink their risk mitigation strategies.

Recently, states have been increasingly redefining investment protections, with many countries terminating Bilateral Investment Treaties (BITs) and Free Trade Agreements (FTAs) with investment protections. This trend coincides with growing expectations around responsible planning, due diligence and compliance with environmental and human rights standards, particularly for companies in the resources and extractive industries. Additionally, there has been a withdrawal from existing multilateral treaties, such as the Energy Charter Treaty, in favour of new agreements like the Comprehensive and Progressive Agreement for Trans-Pacific Partnership (CPTPP), which are designed to provide states with greater policy and regulatory flexibility. At the same time, contractual protections in agreements with states and state-owned entities, such as stabilization clauses, are becoming harder to secure and more limited in scope and effect.

In the Alberta Law Review article, A Playbook for International Risk Mitigation: Investor-State Treaties and Contractual Protections, Catherine Gilfedder, Rachel Howie and Dr. Diora Ziyaeva provide a comprehensive analysis of these developments and offer key strategies for companies in the Canadian and global extractive resources and energy sectors to manage and mitigate evolving risks. The article explores:

• Types of protections available to energy companies operating internationally
• Transactional considerations and ways to best leverage contractual protections to mitigate future risk
• How recent treaty changes affect Canadian energy companies operating internationally
• Impacts on international energy companies pursuing opportunities in Canada, particularly those seeking opportunities to invest in newer technologies as part of the energy transition
• Global trends highlighting changes in treaty protections that stakeholders should expect in the coming years
• Early-stage dispute resolution strategies under investor-state treaties

Access the full article here.

For further insights or inquiries regarding investment protections and dispute resolution strategies, please contact the authors, Catherine Gilfedder, Rachel Howie or Dr.Diora Ziyaeva

The article was first published by Alberta Law Review.