Foreign Investment, International Law and Common Concerns

Description

Increasingly, transnational corporations, developed countries and private actors are broadening the boundaries of their investments into new territories, in search of a higher return on capital. This growth in direct foreign investment involves serious concerns for both the investor and host state. Various exponents of international civil society and non-governmental organisations persuasively claim that such growth in foreign investments constitutes potential and serious hazards both to the environment and the fundamental rights and freedoms of local populations. This book explores from an international law perspective the complex relationship between foreign investments and common concerns, i.e. values that do not coincide, or do not necessarily coincide, with the interests of the investor and of the host state. It pays particular attention to the role of the main international development banks in reconciling the needs of foreign investors with the protection of common concerns, such as the environment, human rights and labour rights. Among its collection of essays, the volume asks how much "regulatory space" investment law leaves; whether international investment law is an effective means of balancing contrasting interests, and whether investment arbitration currently constitutes a mechanism of global governance. In collecting the outlooks of various experts in human rights, environmental and international economic law, this book breaks new ground in exploring how attention to its legal aspects may help in navigating the relationship between foreign investment and common concerns. In doing so, the book provides valuable insights into the substantive issues and institutional aspects of international investment law. Cover Half Title Title Page Copyright Page Table of Contents Foreword by the Editors Notes on Contributors Table of Cases Table of Statutes 1. Introduction: Foreign Investment, International Law and Common Concerns Part I: General International Law Issues 2. The Jurisprudence of Investment Treaty Tribunals: Between Public Good and Common Concern 2.1 The Quest for Multilateral Order: From Custom to Arbitral Jurisprudence 2.2 Multilateralizing Investment Law through Jurisprudence 2.2.1 Analogizing with Earlier Decisions 2.2.2 Precedent as a Means of Clarification of Investment Treaty Provisions 2.2.3 Abbreviation of Reasoning 2.2.4 Precedent and Standardization of Interpretation: Towards a Jurisprudence Constante 2.2.5 Delegation of Law-Making Functions from States to Tribunals 2.2.6 Multilateralization and Conflicting Decisions 2.2.7 Precedent and the Generation of Normative Expectations 2.3 Arbitral Jurisprudence as a Common Concern: Addressing the Legitimacy of Multilateralizing Investment Law 3. Regulatory Measures, Standards of Treatment and the Law Applicable to Investment Disputes 3.1 Introduction 3.2 The Law Applicable for, and the Law Applicable to, Treaty Claims 3.3 The Legal Basis for, and the Law Applicable to, Contract Claims 3.4 Regulatory Measures, International Law and Domestic Law in Investment Claims 3.4.1 Treaty Claims 3.4.2 Contract Claims 3.5 The Assessment of the Legitimacy of Regulatory Measures in Light of the Treaty Standards of Treatment 3.5.1 Regulatory Measures and Expropriation 3.5.2 Regulatory Measures and Fair and Equitable Treatment 3.6 The Impact of the Presence of a Stabilization Clause on the Arbitrators’ Evaluation 3.6.1 Stabilization Clauses and Expropriation 3.6.2 Stabilization Clauses and Fair and Equitable Treatment 3.7 Concluding Remarks 4. Investor Rights and Well-Being: Remarks on the Interpretation of Investment Treaties in Light of Other Rights 4.1 Preliminary Clarifications of the Issue at Stake 4.1.1 The Treaties … 4.1.2 … and Common Concerns: That Is? 4.1.2.1 Other rules, common concerns, or planetary welfare? 4.1.2.2 Other concerns are often not codified in rules, or their concrete content is not determined 4.1.2.3 Concerns common to whom? The interpretation does not entail a conflict between rules, but between jurisdictions 4.1.2.4 To sum up, by way of introduction 4.2 Application of the Treaty, its Broad Clauses, and Their Exceptions 4.3 Integration of Treaties with Domestic Regulations 4.4 Integration of Investor Rights with Other International Rights 4.4.1 Interpretation of Investment Agreements in Light of Other International Rules 4.4.1.1 Article 31.3(c) 4.4.1.2 Interpretive role of customs and other treaties outside Art. 31.3(c) 4.4.2 Application of Investor Rights and Other International Rules and Regulations 4.4.2.1 Investor rights and other treaties 4.4.2.2 Investor rights and other customs 4.5 Non-Application of Investment Treaties Conflicting with Ius Cogens 4.6 Interpretation of Clauses and Exceptions – Revised 4.7 Conclusions 5. Necessity Exceptions, the Argentine Crisis and Legitimacy Concerns: Or the Benefits of a Public International Law Approach to Investment Arbitration 5.1 Introduction 5.2 The Necessity Defence in the Investment Cases against Argentina 5.2.1 Facts 5.2.2 Argentina’s Reliance on the Necessity Defence 5.2.3 Elements of the Necessity Defence in the Investment Tribunals’ Decisions 5.2.4 Relationship Between the Treaty-Based Emergency Exceptions and the Customary Law Necessity Defence 5.2.5 Consequences of Reliance on Necessity 5.2.6 Résumé 5.3 Problems of a Reliance on the Necessity Defence in Economic Crisis Situations as Evidenced in the Argentine Cases 5.3.1 Problematic Elements of Art. 25 of the ILC Articles 5.3.2 Problems Relating to Treaty-Based Emergency Exceptions/BIT Standards 5.3.3 Lack of Consolidation of Proceedings 5.3.4 Contradictory Decisions and Ensuing Legal Insecurity 5.3.5 Problems Arising from the ICSID System for the Settlement of Investment Disputes 5.3.6 Do the Investment Decisions Impose ‘Excessive’ Restrictions on Argentina’s Regulatory Authority? 5.4 Possible Solutions: The Benefits of a Public International Law Approach to Investment Arbitration 5.4.1 Appraisal of Possible Solutions 5.4.2 The Benefits of a Public International Law Approach to Investment Arbitration 6. The Role of Amicus Curiae in Investment Disputes: Striking a Balance Between Confi dentiality and Broader Policy Considerations 6.1 Towards the Admission of Amicus Curiae in Investment Arbitration 6.2 The Practice of Arbitral Tribunals on Amicus Curiae Interventions in the Absence of Written Rules 6.3 The Adoption and Application of Rules on the Participation of Amici Curiae in Arbitral Investment Proceedings 6.4 The Impact of Amicus Curiae Participation on Investment Arbitrations Disputes 6.4.1 The Very Limited Infl uence on the Decision Reached by Arbitral Tribunals 6.4.2 The Potential Benefits Stemming from Amicus Participation in Investment Proceedings: The Contribution to the Transparency and to the Legitimacy of the Procedure 6.5 Concluding Remarks: An Assessment of the Role of Amici Curiae in Integrating Common Concerns in Investment Proceedings 7. Standards and Guidelines: Some Interfaces with Private Investments 7.1 Standards, Guidelines, Soft Law and Beyond 7.2 Standards and Guidelines as Vehicles of Socialization 7.3 Standards and Guidelines as Vehicles of Accountability 7.3.1 The Operational Guidelines of the World Bank and of the International Finance Corporation 7.3.2 The Fight Against Corruption and the Procedure for the Administration of Sanctions 7.4 The Evolution of Normative Techniques and Investment Regulation Part II: Institutional Aspects 8. The World Bank Guidelines on the Treatment of Foreign Direct Investment 20 Years On: Reflecting on the Past, Considering the Present and Developing a New Foreign Investment Strategy of the World Bank Group for the Future 8.1 Introduction 8.2 Minding the Gap: The World Bank Guidelines on the Treatment of Foreign Direct Investments 8.2.1 An Overview of the Purposes, General Structure and Contents of the World Bank Guidelines 8.2.2 Strengths and Weaknesses of the World Bank Guidelines 8.2.3 The Underlying Continuity of the Principles for Responsible Agricultural Investment with the World Bank Guidelines 8.3 Filling the Gap: Reforming the World Bank’s Investment Policy and Its Related Action Plans 8.3.1 Reasons for a Comprehensive Reform of the World Bank Guidelines 8.3.2 Some Tentative Suggestions for a Review of the World Bank Guidelines 8.3.3 Flying High Above the World Bank Guidelines Reform Battlefield: A Tentative Proposal for Reforming the World Bank’s Investment Policy and Its Related Action Plans in the Light of Good Governance Criteria, Environmental and Human Rights Principles 8.3.3.1 The need to remove the obstacles to a ‘reconciliation’ between foreign investors’ interests and common concerns 8.3.3.2 The structure and main tools of the World Bank’s policy forthe promotion of foreign investments 8.3.3.3 Some tentative suggestions for reforming the World Bank’s investmentpolicy and its related action plans in the light of good governance criteria, environmental and human rights principles 9. Non Trade Values Protection and Investment Protection in EU Investment Policy 9.1 Introduction 9.2 The Position of the Commission 9.3 The Position of the Council 9.4 The Position of the EP 9.5 Balancing Investment Protection and Non-Trade Values in the Investment Chapters in the EU FTAs with Canada, Singapore and India 9.6 The Protection of Non-Trade Values and Their Integration in the Investment Policy of the EU and Its Member States: What OptiOptions for the EU as a Rule Maker? 9.7 Conclusions 10. Going Green at the European Investment Bank: An Environmental Policy for Non EU Lending 10.1 Introduction 10.2 The Legal Framework of EIB Investments Outside the EU and Its Environmental Policy: The Connection with the EU Principles and Legal Framework 10.3 The Development of the EIB’s Own Legal Framework 10.4 Where Does the Development of an EIB Environmental Policy Come From and Why Has It Become So Strong in the Last Decade? 10.5 Structure of EIB Action Outside Europe: Guarantees and EU Mandates 10.6 The EIB’s Peculiar Structure and Characteristics as a Public Bank: The Importance of the Project and the Eligibility Criteria 10.7 The Internal Organization and the Procedure Before and During the Financing: Central Role of the Environmental Assessment and Cooperation with the EU Commission 10.8 Conclusions 11. Promoting Investments in Sustainable Development Through Multilateral Environmental Agreements 11.1 Introduction 11.2 The Participation of the Private Sector in MEAs’ Implementation 11.2.1 The Creation of Investment Opportunities 11.2.1.1 Lessons learned from the Clean Development Mechanism 11.2.1.2 Investments in forestry programmes 11.2.2 MEAs’ Financial Mechanisms Opening ‘Windows’ to the Private Sector 11.2.2.1 The strategies of the GEF to enhance the engagement with private actors 11.2.2.2 The GCF under the climate regime and private actors 11.3 MEAs’ Contribution to Create Favourable Conditions for Sustainable Investments 11.3.1 Strengthening Procedural and Substantive Sustainable Development Principles 11.3.2 Building Capacities at the National Level 11.4 Conclusions: Reconciling Interests and Meeting Common Objectives Part III: Common Concerns: Selected Issues 12. Mapping Environmental Concerns in International Investment Agreements: How Far Have We Gone? 12.1 Achieving a New Balance Between Investor Rights and State Interests – What Role for Environmental Language in Investment Treaties? 12.2 Environmental Provisions in Investment Treaties – What Are the Patterns? 12.2.1 Preambles 12.2.2 Reference to and Coordination with Environmental Treaties 12.2.3 Not-Lowering Standards 12.2.4 General Exceptions 12.3 Concluding Remarks 13. Environmental Expropriation in International Investment Law 13.1 Introduction 13.2 Direct Expropriation in International Investment Law 13.3 Other Forms of Expropriation 13.4 Environmental Concerns as a Basis for Expropriation 13.5 Environmental Protection in the New Generation of BITs: A Shift in Focus? 13.6 Concluding Remarks 14. Applying Corporate Social Responsibility to Foreign Investments: Failures and Prospects 14.1 Introduction 14.2 Defining CSR 14.3 The Failed Attempts to Integrate CSR into Investment Regulation 14.4 CSR Standards of Conduct and Their Scope of Application 14.5 Integrating CSR in Investment Regulation: The Soft Law Approach 14.6 The Hard Law Approach: BITs and FTAs 14.7 Prospects on CSR: From an Inspirational Benchmark to a Good Faith Requirement? 15. Foreign Investments in the Offshore Energy Industry: Investment Protection v. Energy Security v. Protection of the Marine Environment 15.1 Introduction 15.2 Regulating the Offshore Energy Industry 15.2.1 Law of the Sea and International Environmental Law 15.2.2 International Investment and Energy Law 15.3 The Challenges Posed by the Offshore Energy Industry 15.3.1 Offshore Energy Investments Located in Disputed Maritime Areas or Concerning Disputed Resources 15.3.2 New Challenges Posed by the Marine Renewable Energy Sector 15.4 Concluding Remarks: Towards ‘An Integrated, Interdisciplinary and Intersectoral Approach’ 16. Right to Property, Investments and Environmental Protection: The Perspectives of the European and Inter-American Courts of Human Rights 16.1 Introductory Remarks 16.2 Two Perspectives on the Relationship Between the Right to Property, Investments and Environmental Protection 16.3 Hierarchy of Underlying Values 16.4 Flexibility in Considering the Role of Compensation for Interferences with Property Rights 16.5 Assessing the Conduct of the Owner/Investor: The Relevance of Good Faith 16.6 Concluding Remarks 17. The Protection of Cultural Rights and Cultural Heritage in International Investment Law and Arbitration 17.1 Introductory Remarks 17.2 The Protection of Cultural Rights and Cultural Heritage in International Law 17.3 The Protection of Cultural Rights and Cultural Heritage in International Investment Law 17.4 Harmonization of Foreign Investment Protection with Cultural Rights and Cultural Heritage in Investor–State Arbitration 17.4.1 The Direct Application of the 1972 World Heritage Convention 17.4.2 The Interpretative Function of the International Law Instruments on the Protection of Cultural Rights and Cultural Heritage 17.5 The Exclusion of the Interpretative Function of Other International Law Instruments in the Harmonization of Investment Protection with Non-Investment-Related Concerns 17.6 Concluding Remarks 18. International Investment Law and International Protection of Workers’ Rights 18.1 Introductory Remarks 18.2 Internationally Protected Workers’ Rights 18.3 Potential Conflict Between Foreign Investments and Workers’ Rights’ Protection 18.4 Coordination and Harmonization of Investment Protection with Workers’ Rights 18.4.1 General Considerations 18.4.2 Workers’ Rights Issues 18.4.2.1 Preambular clauses 18.4.2.2 ‘Non Lowering Standards’ clauses 18.4.2.3 ‘Minimum Standard’ clauses 18.4.2.4 ‘Right to Regulate’ clauses 18.4.2.5 Corporate social responsibility 18.4.2.6 IISD Model BIT 18.5 Concluding Remarks 19. Public Interest Concerns in International Investment Arbitration in the Water Services Sector: Problems and Prospects for an Integrated Approach 19.1 Introductory Remarks 19.2 On the Relevance of the Difficult Formation of a Basic Human Right to Access to Water and Sanitation 19.3 The Impact of the Due Diligence Nature of the International Obligations Concerning the Right to Water 19.4 On the Relationship of Separation and Compatibility Between International Investment and Human Rights Obligations 19.4.1 On the Suez and Sauer Awards 19.4.2 Preliminary Conclusions 19.5 Prospects for an Integrated Interpretation of Investment Treaties Beyond Compatibility Between Investment and Human Rights Obligations 19.5.1 On Art. 31.3(c) VCLT 19.5.2 An Integrated Treaty Interpretation Enhanced by Proportionality and Reciprocity 19.6 On the Guidance to the Assessment of the Contents of Due Diligence in a Reciprocity Perspective on a Case-by-Case Basis 20. Sovereign Debt Restructuring and Investment Protection 20.1 Introduction 20.2 Whether Sovereign Bonds Qualify as ‘Investment’ 20.3 Investment Agreements Excluding ‘Public Debt Operations’ from the Scope of Their Application 20.4 The Greek Debt Restructuring 20.5 The Safeguard of Common Concerns and States’ Policy Space Index