Here's the minimum standard of treatment provision in the leaked TPP investment chapter (which is basically the same as the U.S. model BIT):
Article II.6: Minimum Standard of Treatment14
1. Each Party shall accord to covered investments treatment in accordance with applicable customary international law principles, including fair and equitable treatment and full protection and security.
2. For greater certainty, paragraph 1 prescribes the customary international law minimum standard of treatment of aliens as the standard of treatment to be afforded to covered investments. The concepts of “fair and equitable treatment” and “full protection and security” do not require treatment in addition to or beyond that which is required by that standard, and do not create additional substantive rights. The obligations in paragraph 1 to provide:
(a) “Fair and equitable treatment” includes the obligation not to deny justice in criminal, civil, or administrative adjudicatory proceedings in accordance with the principle of due process embodied in the principal legal systems of the world; and
(b) “Full protection and security” requires each Party to provide the level of police protection required under customary international law.
3. A determination that there has been a breach of another provision of this Agreement, or of a separate international agreement, does not establish that there has been a breach of this Article.
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14 Article II.6 (Minimum Standard of Treatment) shall be interpreted in accordance with Annex II-A (Customary International Law).
And here's Annex II-A:
Annex II-A
Customary International Law
The Parties confirm their shared understanding that “customary international law” generally and as specifically referenced in Article II.6 (Minimum Standard of Treatment) results from a general and consistent practice of States that they follow from a sense of legal obligation. The customary international law minimum standard of treatment of aliens refers to all customary international law principles that protect the investments of aliens.
I think a lot of people would like to see more clarity about what exactly the standard here is. Is it about "arbitrary" government conduct? Or is it about "outrageous" government conduct? Or something in between? The language above seems to give tribunals discretion to take different approaches, and thus I'm not sure exactly what governments are agreeing to when they adopt such language. It would probably be helpful to specify more clearly what is meant. Of course, that might make it impossible to reach agreement!
