International Construction Law Review
INVESTMENT TREATIES LIMIT THE CRITICAL RIGHT OF STATES TO PRESERVE THE ENVIRONMENT AND PROTECT COMMUNITY RIGHTS IN A MINING CONTEXT: IN FAVOUR OF THE RESOLUTION
Kenneth Juan Figueroa
Partner, Foley Hoag LLP
George Orwell famously wrote: “Truisms are true, hold on to that!”1 As Orwell further explained “[t]he solid world exists, its laws do not change. Stones are hard, water is wet, objects unsupported fall towards the earth’s centre.”2 Had Orwell been alive today he may as well have added another truism to his list, and that is the resolution: “Investment Treaties Limit the Critical Right of States to Preserve the Environment and Protect Community Rights in a Mining Context.”
Investment treaties and the dispute settlement system they have created have been a singular and, I would argue positive, innovation for international law. By providing for systematic treatment of investment disputes, the Investor-State Dispute System (ISDS) has generally de-politicised controversies that have historically sparked wars. It has been successful in providing independent fora for such controversies and created the possibility for a de facto jurisprudence that provides, to a limited extent, a semblance of order for international investments.
A fundamental aspect of ISDS is that, through the consent of states, as set forth in investment treaties, matters that were once within the immune province of sovereign power were voluntarily submitted to dispute resolution, providing foreign investors with a direct right of action against the state that they otherwise would not have under international or domestic law.
The price for this limited dispensation of sovereign power is still much debated. The original promise that investment treaties and ISDS will promote greater foreign direct investment is empirically debatable.3 Moreover, it is
1 Orwell, G, 1984, p 54.
2 Ibid.
3 See Ginsburg, T, “International Substitutes for Domestic Institutions: Bilateral Investment Treaties and Governance”, 25 INT’LREV L & EcON 107, 114 (2005) (“The most sophisticated analyses to date have found that BITs have had little effect on increasing [Foreign Direct Investment”); See also Ryan, C M, “Discerning the Compliance Calculus: Why States Comply with International Investment Law”, 38 GA J Int’l & Comp Law 63, (2009) (“[T]here is limited evidence showing a direct correlation between signing a BIT and increased foreign investment … Factors such as a country’s rate of economic growth, population, inflation levels, and market size, and adherence to the rule of law each had statistically more significant effects on FDI inflows.”). But see Bhasin, N and Manocha, R, “Do Bilateral Investment Treaties Promote FDI Flows: Evidence from India”, 41 Viklapa: The Journal for Decision Makers, 275, 285 (October–December 2016) (concluding that at least for India BITs have had an empirically demonstrable positive affect on FDI).
Pt 3] In Favour of the Resolution
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