Finance ministry to move Cabinet for clearing new BIPA text
Times of India | Jun 24, 2014
Finance ministry to move Cabinet for clearing new BIPA text
Sidhartha, TNN
NEW DELHI: Ignoring protests from the department of industrial policy and promotion (DIPP), the department of economic affairs is planning to approach the Union Cabinet for a go-ahead for the new model text for bilateral investment protection agreements (BIPAs).
The two departments have been involved in a bitter tussle over the issue with DIPP going to the extent of using the sunset clause in the treaties to revoke them. "Some people have used BIPAs’ signing as photo ops. The way we have signed these agreements, we have opened ourselves to international cases, which carry huge penalties," said an official, requesting anonymity. The DIPP’s contention is that a foreign government may not be willing to sign the reworked agreements, which are not as open-ended as the ones in force now.
India has signed 83 such treaties, of which 72 are in force, the finance ministry said on its website.
"Instead of a model text, there should be clauses stipulating the no-go areas for us. With so many BIPAs around, other countries can cherry pick whatever they want," said another official, citing the example of various countries such as Indonesia and South Africa, which are opting out of such agreements. In Brazil, BIPAs need parliamentary nod.
The department of economic affairs has, however, trashed the arguments put forward by DIPP, with officials terming them "naive". Officials said that BIPAs provide comfort to foreign investors, which will help attract investments during these critical times. Even the ministry of foreign affairs has turned down DIPP’s objections.
Amid the huge difference in opinion, officials are scheduled to meet on Tuesday to discuss the model text, although DIPP appears to be unyielding on its stance.
Several global telecom firms, which had lost their 2G licences following a Supreme Court judgment, have slapped notices on the government, citing breach of bilateral investment protection pacts. In addition, Vodafone is going for international arbitration following the tax notices, while Nokia too has threatened similar action.
