INTERNATIONAL INVESTMENT LAW AND ITS OTHERS, Hofmann, Tams, eds., Nomos, 2012
37 Pages Posted: 24 Mar 2012 Last revised: 1 Apr 2012
Date Written: March 24, 2012
This paper reviews the interaction between environmental and investment law obligations in investment treaty arbitrations. Given the hybrid character of investment disputes, where state measures are alleged to breach investment treaty standards, it is inevitable that environmental measures might be caught in the web of obligations contained in the applicable investment instruments. The normative conflicts that might ensue have attracted attention both within and outwith the investment community. Within the investment community, there have been rising concerns about the implications of this normative dissonance for legal certainty and standards of protection available to investors; on the other hand, the need has been expressed for reaffirming the necessity of an adequate regulatory space for states in the pursuit of environmental policies.
The debates have often assumed confrontational tones and raised arguably unjustified fears. Accusations of statism and disguised protectionism have been met with counter-claims of pro-investment bias and ‘legitimacy deficit’. This paper will avoid to engage with these debates and concentrate instead on the practical, system-specific tools available to arbitrators for the harmonisation of potentially conflicting obligations.
This can be accomplished principally through the application of express provisions contained in the relevant investment treaty, by interpretation of the investment instrument in light of general international law, including environmental law, and, procedurally, by inclusion of third parties in the proceedings. Express provisions (carve-out clauses, exceptions clauses or balancing clauses) allow for environmental obligations to be raised as legitimate defences by the host state. Additionally, either conflict clauses expressly included in the investment instrument, or general conflict rules applicable to the resolution of the dispute, can be employed by the tribunals in order to avoid or solve potential conflicts of obligations. Submissions by environmental interveners can provide the tribunal with information not available from the parties, and guarantee, if not that public interest concerns are taken into account in the proceedings, at least that they are voiced.
The analysis reveals that the avenues for fruitful interaction between these distinct legal regimes are available to the investment arbitrators. However, the story of ‘investment and its others’ is mostly a story of miscommunication and disconnect. In its second part, we will attempt to come to grips with these structural failures of communication and provide a plausible explanation for them. As already stated, this paper argues that endogenous, system-internal solutions for the co-ordination of environmental and investment obligations are already available within the investment system: as a successful example of how this can be accomplished, the paper will conclude by examining the recent Chemtura award, where, it is submitted, the arbitrators stroke a reasonable balance between the judicious application of the investment instrument and the careful consideration of the defences raised by the state in relation to their international and domestic obligations to implement environmental measures.
Keywords: investment law, environmental law, sustainable development
Suggested Citation: Suggested Citation
Asteriti, Alessandra, Waiting for the Environmentalists: Environmental Language in Investment Treaties (March 24, 2012). INTERNATIONAL INVESTMENT LAW AND ITS OTHERS, Hofmann, Tams, eds., Nomos, 2012. Available at SSRN: https://ssrn.com/abstract=2028405