BRIDGING THE GAP BETWEEN INTERNATIONAL INVESTMENT LAW AND THE ENVIRONMENT

CHAPTER ONE

1.0     GENERAL INTRODUCTION

The main issue arising from the relationship between foreign investment and environmental protection have been raised by academics and practitioners of international investment law.^[1] The centre of the problem lies in the fact that protecting the rights of investors and environmental protection are often clashing objectives. Trying to synchronize these two fields of international law may present significant challenges to many scholars, especially considering the enormously conflicting interests at stake any time an investor carries out economic activities abroad.

The definition of investor and investment are among the key elements determining the scope of application of rights and obligations under international investment Law. An investment Law applies only to investors and investments made by those investors who qualify for coverage under the relevant provisions. Only such investments and investors may benefit from the protection and be eligible to take a claim to dispute settlement.

Why is the definition of investor and investment so important? From the perspective of a capital exporting country, the definition identifies the group of investors whose foreign investment the country is seeking to protect through the agreement, including, in particular, its system for neutral and depoliticised dispute settlement. From the capital importing country perspective, it identifies the investors and the investments the country wishes to attract; from the investor’s perspective, it identifies the way in which the investment might be structured in order to benefit from the agreements’ protection.

This definition may also be central to the jurisdiction of the arbitral tribunals established pursuant to investment agreements since the scope of application rationae personae may depend directly on what “investor” means, i.e. being an investor of a state party to the treaty is a necessary condition of eligibility to bring a claim. In addition, the scope of application rationaemateriaedepends on the definition of investment and in particular with respect to the jurisdiction of the International Centre for the Settlement of Investment Disputes (ICSID), as it extends to “any dispute arising out of an investment”.

[1] The literature on the international law of foreign investment is quite extensive, but a few works stand out for their scope and effectiveness in providing a broad coverage of the whole field. See generally Rudolph Dolzer& Christoph Schreuer, Principles of International Investment Law, 2nd ed (Oxford: Oxford University Press, 2012); MuthucumaraswamySornarajah, The International Law on Foreign Investment, 3rd ed (Cambridge: Cambridge University Press, 2010); Surya P Subedi, International Investment Law: Reconciling Policy and Principle, 2nd ed (Portland: Hart, 2012); Andrew Newcombe&LluísParadell, Law and Practice of Investment Treaties: Standards of Treatment (Alpen on the Rhine: Kluwer Law International, 2009).

BRIDGING THE GAP BETWEEN INTERNATIONAL INVESTMENT LAW AND THE ENVIRONMENT