Reforming investment agreements for sustainable development (original) (raw)
Related papers
Briefing Note: Aligning International Investment Agreements with the Sustainable Development Goals
2020
International investment agreements (“IIAs”) provide enforceable protections to foreign investors based on the premise that enforceable investor protections will stimulate greater foreign investment flows, which, in turn, are assumed to promote development. However, as understandings of both the effectiveness of these agreements as well as the effects of investment and investment governance on sustainable development have evolved, it is not clear that IIAs, as currently designed, are fit for their purpose of promoting development. Worse: they may be undermining efforts to achieve the Sustainable Development Goals. Change is, therefore, essential. In this note, we summarize our proposal that IIAs should be designed and evaluated with respect to their ability to: • Encourage and channel investments that contribute to sustainable development, and do not support harm-causing investments; • Foster, and not constrain, responsible, SDG-advancing governance at the national level; and • Prom...
The proliferation of International Investment Agreements (IIAs) and treaty-based investment arbitration has raised concerns over the extent to which IIAs are actually fair and are able to balance the interests of foreign investors and States. The strong protections afforded by IIAs to investors may restrict the host State's ability to regulate for the public interest and potentially allow newly adopted public policies to be subject to compensation. Several economic transactions that have qualified as investments for treaty protection have fallen short of contributing to the host State's sustainable development. They have not added to the generation of employment and growth, the transfer of new technologies and knowledge or the strengthening of infrastructure. Nor have many of these economic transactions contributed to the home country's development. Moreover, regulatory measures adopted with the aim of fostering sustainable development (ie environmental measures) have been successfully challenged by investors. In some cases tribunals have interpreted these measures as creeping or indirect expropriations, therefore requiring compensation. Both the lack of consideration for the host State's interests under international investment law and the limitation to the State's policy space have been perceived as having negative implications for the development of the country, and in particular for the adoption of sustainable policies. Though little empirical evidence exists, it has been suggested that investment arbitration is a threat to the adoption of public policy regulations and may even have a 'chilling effect' on them. A possible way forward is the negotiation of a new generation of investment treaties, as well as the renegotiation and revision of the existing ones. These changes are needed in order to balance the interests of States and investors and to incorporate innovative features in light of the necessary policy space that States require in order to foster sustainable development through the application of dynamic social and environmental norms and regulations. Another alternative is the adoption of interpretative approaches, which ultimately foster sustainable development goals. The preferred options are the contextual and dynamic interpretation of the intention of the contracting States, as well as the systemic integration of international rules and norms into investor-State disputes.
Aligning International Investment Agreements with the Sustainable Development Goals
SSRN Electronic Journal, 2019
is the Investment Law and Policy Head at the Columbia Center on Sustainable Investment ("CCSI"). Her work at CCSI centers on analyzing investment treaties and treaty-based investor-state arbitrations, and examining the implications those instruments and cases have for host countries' domestic policies and sustainable development strategies. In addition, she concentrates on key institutional and procedural aspects of the investment law framework, including efforts to increase transparency in and legitimacy of investor-state dispute settlement. She has a B.A. from Yale University, a J.D. from the University of Arizona, an LL.M. from Columbia Law School, and is admitted to the bar in California. ** Lisa Sachs is the Director of CCSI, where she oversees three areas of focus: investments in extractive industries, investments in land and agriculture, and investment law and policy. She received a B.A. in economics from Harvard University, and earned her J.D. and M.A. in international affairs from Columbia University, where she was a James Kent Scholar and recipient of the Parker School Certificate in International and Comparative Law. She is admitted to the bar in New York. *** Nathan Lobel is a J.D. candidate at Harvard Law School, where he focuses on climate policy and political economy. Prior to law school, he was the Special Assistant to the Director of CCSI, where his scholarship centered on international governance and the clean energy transition. He received his B.A. in political science from Yale University with high honors, during which time he also worked with the Yale Program on Climate Change Communication and as a fossil fuel divestment organizer.
Aligning Investment Treaties with Sustainable Development Goals
2019
is the Investment Law and Policy Head at the Columbia Center on Sustainable Investment ("CCSI"). Her work at CCSI centers on analyzing investment treaties and treaty-based investor-state arbitrations, and examining the implications those instruments and cases have for host countries' domestic policies and sustainable development strategies. In addition, she concentrates on key institutional and procedural aspects of the investment law framework, including efforts to increase transparency in and legitimacy of investor-state dispute settlement. She has a B.A. from Yale University, a J.D. from the University of Arizona, an LL.M. from Columbia Law School, and is admitted to the bar in California. ** Lisa Sachs is the Director of CCSI, where she oversees three areas of focus: investments in extractive industries, investments in land and agriculture, and investment law and policy. She received a B.A. in economics from Harvard University, and earned her J.D. and M.A. in international affairs from Columbia University, where she was a James Kent Scholar and recipient of the Parker School Certificate in International and Comparative Law. She is admitted to the bar in New York. *** Nathan Lobel is a J.D. candidate at Harvard Law School, where he focuses on climate policy and political economy. Prior to law school, he was the Special Assistant to the Director of CCSI, where his scholarship centered on international governance and the clean energy transition. He received his B.A. in political science from Yale University with high honors, during which time he also worked with the Yale Program on Climate Change Communication and as a fossil fuel divestment organizer.
Reconciling International Investment Law and Sustainable Development: Necessity or Luxury?
SSRN Electronic Journal, 2010
The paper aims at studying the potential accommodation of the concept of sustainable development within the regime of international law regulating foreign direct investment (FDI). Reconciliation of international investment law and sustainable development is part of the current awareness of necessity to broaden interests involved in the international investment regime responding to such tensions as possible "regulatory chill", negative effect of FDI on development of host States and global commitment to promote sustainable development in every level of decision-making. The paper consists of two main parts and focuses on: (1) the notion of sustainable development and its legal character, and (2) proposed methods of accommodation of sustainable development in the international investment law regime through normative integration of sustainable development or its elements in the IIAs texts and judicial reasoning methods available to adjudicators. Detailed analysis of such recent IIAs as CARIFORUM EPA and various Model BITs will be provided to resemble the current successful incorporation of sustainable development concerns in investment regime which will possibly influence the drafting of future IIAs. The paper is designed to offer solutions for rebalancing FDI and to contribute to the formulation of international investment law in a more integrated, principled manner in the context of fragmentation versus unity of international law.
Sustainable Development Agendas in African Investment Treaties: Reconciling Principle with Practice
Australasian Review of African Studies
Sustainable development has become the catchword for a sustainable standard of living, evidenced in the elaboration and elucidation of the principles by the United Nations Sustainable Development Goals (SDGs). African countries are deeply implicated in the sustainable development agendas as they strive to turn the tide in favour of a better way of living. Sustainable development is deeply intertwined with the natural resources sector because of its inextricable link with development imperatives. Despite a commitment to implement the sustainable development agendas in their various national laws, BITs, and regional and multilateral treaties, evidence indicates a divergence between principles and practice in Africa. Most African countries observe the principles in breach, illustrated by wide scale poverty, low human development, and environmental devastation of ecosystem and marine habitat. Arguably, African countries have an obligation to reflect the principles of sustainable development to which they committed themselves to ensure sound environmental governance and social equity.
Sustainable development is a fundamental principle of International Law. It is closely related to and [should be] a core objective of any international treaty seeking to address developmental concerns. Curiously, however, a critical review of [legal] literature reveals seemingly little attention given to the actual assessment of ‘how and to what extent’ existing Bilateral Investment Treaties (BITs) have integrated sustainable developmental concerns. This is particularly in relation to BITs involving developing countries in Africa such as Kenya. Accordingly, taking Kenya as an illustrative case, this study makes a critical assessment of the BITs concluded between Kenya, the Netherlands, Britain, and Germany; with a view to establishing how and to what extent the said BITs have integrated sustainable development. The study argues that most (if not all) BITs remain silent on sustainable development. Further, the methods of integrating sustainable development are premised on placing host state obligations to protect investors and their investments. In doing so, the implied assumption is that protection will attract foreign investment necessary for financing sustainable development. Nevertheless, as the paper highlights, difficulties have arisen in measuring how revenue generated from foreign investment has contributed to the sustainable development due to the unpredictable patterns of revenue inflow from foreign. This in turn creates difficulties in using the said revenue when planning for long-term sustainable yields in development. Accordingly, the paper urges a collectively rethinking of the usage of BITs as a tool for sustainable development involving, states taking deliberate steps to recast BITs to ensure that the process of negotiation of BITs, the structure that emanates from the negotiation and the implementation of the BITs; explicitly seek to integrate sustainable development. This necessarily involves placing obligations on both state and non-state actors in realizing sustainable development.
SUSTAINABLE DEVELOPMENT VS INVESTMENT PROTECTION: THE ROLE PLAYED BY DEFERENCE OR RESTRAINT
2018
Annotation: Citing the beginnings of a so-called "bright jurisprudential star," it traces changes in the reasoning of arbitral tribunals faced with determining whether states have violated their obligations to accord national treatment to foreign investors and their investments to encompass a purpose-based analysis. This analysis permits the penalizing of discriminatory treatment but honors legitimate regulations that might have incidental effects on foreign investors and investments. The chapter draws from both investment and WTO jurisprudence to support conclusion and to bolster suggestions for the ways that tribunals should deal with difficult questions, such as how to respond to "mixed-motive" cases, going forward. Sustainable development, as defined by the World Commission on Environment and Development, is "development that meets the needs of the present without compromising the ability of future generations to meet their own needs."1Investors have challenged measures adopted to promote sustainable development for breaching obligations including uncompensated indirect expropriations, fair and equitable treatment and non-discrimination. In this respect, the decisions of investment tribunals arising from these challenges can significantly affect the regulatory autonomy of states. Broadly worded treaty provisions give tribunals wide discretion in interpreting the obligations of states toward foreign investors and, therefore, significant authority to control exercises of regulatory and administrative power by governments.2 There is evidence that investment tribunals are increasingly taking the view that they should adopt balanced interpretations of investment treaties that take the interests of both host states and foreign investors into account.3 However, this emerging understanding of the need to balance the interests of states and investors has not generally translated into the adoption of consistent or coherent approaches to standards of review. In light of concerns that investment tribunal decisions 1