South Asian Bilateral Investment Treaties and Regulatory Autonomy to Protect Environment: Is There a Threat?

Abstract

This paper provides a first ever detailed study of the environment related provisions in the BITs of South Asian states. This study is necessitated by the fact that South Asia is increasingly becoming a favourite destination for FDI. It studies a total of 173 BITs of India, Pakistan, Bangladesh, Sri Lanka, Nepal and Afghanistan. It analyzes the different purposes that the environment related provisions serve in the BITs, and also the different forms of provisions in the BITs which address environmental concerns. It further delves into the implications of the presence or absence of such environment related provisions on the regulatory autonomy of the states to regulate foreign investment in order to achieve certain environmental objectives. Based on the analysis, the paper suggests future course of action for the South Asian states in terms their BIT program. As this study concludes that the environment related provisions are sparse in the South Asian BITs, it suggests that these states should incorporate environment related provisions in order achieve a perfect balance between the investor protection and environmental regulation.

Keywords: International Investment Law, Bilateral Investment Treaties, Environment, Regulatory Autonomy, South Asia