On 26 February, 2009, the Governments of the ten member states of the Association of South-East Asian Nations ("ASEAN") signed the ASEAN Comprehensive Investment Agreement ("ACIA"). The ACIA is effectively a consolidated replacement of the 1987 ASEAN Agreement for the Promotion and Protection of Investments (the "1987 Agreement") and the Framework Agreement on the ASEAN Investment Area (the "AIA Agreement"). As such, it offers investors from ASEAN member states an improved and comprehensive set of investment protections whilst further removing barriers to intra-ASEAN foreign direct investment.

The ACIA reaffirms and expands on many of the investment protections contained in the 1987 Agreement, including most-favoured nation protections (Article 6); fair and equitable treatment; full protection and security (Article 11); and protection from expropriation without compensation (Article 14). In addition, the ACIA offers new protections to investors including a clause prohibiting performance requirements (Article 7), a clause prohibiting Member States from requiring that senior management positions be filled by persons of a particular nationality (Article 8) and a clause granting foreign key personnel associated with the investment the right of entry and temporary stay (Article 22).

The ACIA also expands on the investment promotion, facilitation and liberalisation measures contained in the AIA Agreement. One of the major perceived advances is the requirement for greater certainty and transparency in the administrative procedures required in each state in order for an investment to acquire "approved" status for treaty protection purposes. This has previously been a serious stumbling block due to the absence of any clear or easily accessible guidance on what is needed in each state. As under the AIA, the provisions requiring Member States to inform the AIA Council of changes in law that significantly affect investments and to publish relevant laws and administrative guidelines pertaining to investment have been preserved.

As with many of the underlying investment protections, the scope of the dispute resolution clause has also been extended and clarified. As under the 1987 Agreement, ASEAN investors with cross-border investments who believe the substantive protections under the ACIA have been breached can bring arbitration proceedings against the host state. Disputes can be conducted, at the investor's election, pursuant to the ICSID Convention (provided the relevant state has signed the ICSID Convention); on an ad hoc basis using the UNCITRAL Arbitration Rules; or in regional centres for arbitration in ASEAN countries. Alternatively, claims can also be brought in domestic courts or any other arbitral institution to which the parties agree.

It is the stated objective of the ACIA "to create a free and open investment regime within ASEAN in order to achieve the end goal of economic integration." In the past, commentators have noted that ASEAN economic integration has been modest, yet there seems to be a clear impetus in this new Agreement to strengthen such integration and economic ties between the ASEAN Member States. It will be interesting to monitor the effect of the ACIA on the growth of investment and the use that investors make of these expanded protections. It is often remarked that only one arbitral award was ever delivered under the 1987 Agreement (in the case of Yaung Chi Oo Trading v. Union of Myanmar decided on 31 March 2003), although a second case, Cemex Asia Holdings Ltd v. Indonesia, was settled relatively early in the proceedings. It remains to be seen whether the ACIA, with its expanded terms, obligations and clarifications, will encourage further investment and/or result in more investors taking advantage of the international arbitration provisions set out in the Agreement.