The Legal Regulation of Sustainable International Investments
1 Nitish Monebhurrun
Public Law Dept. - Faculty of Law - University Center of Brasilia
Abstract
International investment law is a law field known for granting a wide array of legal protection to private investors. Traditionally, the latter had no obligations vis-à-vis their host States. The abundant case law, which originates from arbitral tribunals, has thus mostly focused on construing and developing the legal standards and principles of investment protection. Such cases arose in a specific arbitral configuration inherent to international investment law whereby the claimant is normally the investor and the defendant is its host State. This trend is however changing concomitantly with the very landscape of international investment law which has freshly started to include standards of corporate social responsibility and investors’ duties within its ambit, thus aiming at more sustainable investments. A new generation of international investment agreements is indeed in its first bloom and is characterized by the incorporation of sustainability standards, namely in terms of social and environmental duties imposed on or recommended to private investors. These agreements tentatively offer a regulatory framework for more sustainable international investments. In the same vein, the arbitral case law has also shown more permeability in considering the investors’ environmental and social corporate duties. This has been done in a twofold manner. Firstly, the investors’ corporate behavior has been used as a yardstick to measure their level of protection as provided for by international investment agreements. As such, the investors’ duties can be used to assess their diligence and their clean hands, the latter being a benchmark to construe the provisions on their legal protection. An investor having unclean hands would thus not qualify for protection by the applicable investment agreement. Secondly, these investors’ duties have been discussed in counterclaims procedures, whereby an investor has already been held liable and condemned by the arbitral tribunal for the violation of its environmental duties. Set against the background of an evolving international investment law scene, this paper will discuss how the corporate social and environmental duties operate in articulation with the investors’ legal protection. It will argue that if such duties exist the legal regime for sustainable investments is still under technical construction and is in need for doctrinal research to offer guidance to both States and international investors. The paper will ultimately present international investment law as a fertile field to discuss how corporate social responsibility can be transformed into a binding obligation for international investors.
Keywords
"Regulation", "sustainable investments", "corporate environmental and social duties", "international investment agreements", "arbitration"
