Sustainable International Investment Agreements: Challenges and Solutions for Developing Countries

Abstract

In this book chapter, Mayeda reviews how developing countries can use international investment agreements (IIAs) to promote their sustainable development policies. He first identifies some of the deficiencies of existing models, and then suggests new provisions that developing countries should consider including in future IIAs in order to provide them more policy flexibility to deal with political, social and economic emergencies. Suggestions include integrating principles of sustainable development into the preamble and objectives of these agreements, as well as modifying typical substantive provisions such as MFN, national treatment, the prohibition on expropriation and fair and equitable treatment in order to enable developing countries to protect the environment and promote human rights. The author also explores how environmental and social impact assessments can be integrated into the investment approval process. Finally, the author addresses effective enforcement mechanisms, including liability for investors in their home state, international liability under the treaty, and liability in the host state.

Keywords: international investment agreements, bilateral investment treaties, developing countries, human rights, sustainable development, expropriation, fair and equitable treatment, most-favoured nation, national treatment, enforcement mechanisms

JEL Classification: K33