Incorporating the OECD Guidelines in International Investment Agreements: Turning a Soft Law Obligation into Hard Law?

This article has been written as a response to two recent developments. First, as a response to the recent update of the Organisation for Economic Co-operation and Development (OECD) Guidelines on 25 May 2011, which seem to have taken a form based on human rights due diligence. Second, as a response to the resolution by the European Parliament of 6 April 2011 on the future EU international investment policy in which it asks the Commission to include, in all future agreements, a reference to the updated OECD Guidelines. This article examines how human rights due diligence, as enshrined in the OECD Guidelines, could be incorporated in international investment agreements (IIAs). Therefore, the concept of human rights due diligence as introduced in the UN Guiding Principles and the OECD Guidelines was explored. It includes empirical research as to how multinationals (MNEs) currently incorporate the concept of human rights due diligence in their policies in order to facilitate investors and policymakers with the knowledge necessary to give an adequate response to this concept. It continues by providing several options as to how the OECD Guidelines could be incorporated in investment agreements, including the advantages and disadvantages of these options.