The Balance between Investor Protection and the Right to Regulate in Investment Treaties: A Scoping Paper

Abstract

This scoping paper examines the balance between investor protection and the right to regulate in investment treaties and investment treaty policy. It notes the growing trend to analyse the impact of particular treaty rules rather than treaties as a whole. It also points to the importance of comparative analysis of balancing under other regimes.

It then outlines issues in four areas:

(i) the types of regulation potentially at issue in investment treaty claims by covered investors;

(ii) the types and levels of investor protection;

(iii) the degree of impact of treaties on regulation; and

(iv) the processes and institutions that may be involved in balancing interests in investor protection and the right to regulate.

While the paper recognises that dispute resolution institutions have a significant impact on the balance and the right to regulate, it focuses primarily on substantive issues in light of other ongoing work on dispute settlement.

Keywords: investment treaties; investor protection; right to regulate; regulatory autonomy; policy space; regulatory chill; investor-state dispute settlement; arbitration; settlement; international economic law; balancing of interests; balancing of policy goals; foreign investment; investment law

JEL Classification: F02, F13, F23, F53, F60, H11, H40, K23, K29, K33, K4