Author
Mr Swargodeep Sarkar
Organisation/Institution
IIT Kharagpur
Country
INDIA
Panel
International Investment Law
Title
Safeguarding Environment and Public Health vis-a-vis International Investment Agreements: An Evaluation of BITs of South Asian Nations
Abstract
Since the first modern Bilateral Investment Treaty (BIT) was signed between Germany and Pakistan in 1959, the regime of BITs has experienced considerable changes with respect to both substance and procedure. Till the 2000s, generally, BITs have been concluded between the European capital-exporting States with newly independent former colonies known as developing economies exerting influence under the so-called ‘European model’. Following the neoliberal approach, these first-generation BITs were exclusively tailored and contained broad substantive and procedural (ISDS claims) treaty commitments for the protection of foreign investments with no or insufficient provisions recognising a State’s sovereign right to regulate in the public interest. Thus, without sufficient policy space in the public interest, if the host state adopts any regulatory measures in respect of protecting human rights, environment, public health etc., the investor would challenge those measures as a breach of substantive BIT obligations. The fear of ISDS claims and thereby not acting in the public interest in a timely and effective way brings a ‘regulatory chill’ in the host state. Over the years, foreign investors have brought numerous ISDS claims challenging sovereign regulatory measures related to protecting the environment, public health, tax policy, human rights, etc. Therefore, significant concern remains regarding the host states’ adequate policy space to regulate non-investment issues (public purposes) without frustrating BIT protection rules under the existing scheme of the BIT regime. Moreover, the approach of the BIT tribunals in dealing with such cases differs significantly depending on the language of the treaties under which the investors’ claims are pursued. Further, the contest is fueled when ISDS tribunals would reach different conclusions by examining a similar set of facts or interpreting the same provision. Mostly, South Asian countries are the capital-importing economies or recipients of the cash flow from the global north. Due to the shortage of public budgets, these economies depend on FDI to finance their developmental projects. Hence, South Asian countries adopt numerous investor-friendly policies to attract FDI, including entering into international investment agreements (IIAs) in the form of BITs and other investment treaties. On the other hand, it is equally important to ensure that the South Asian nations have sufficient sovereign regulatory space to protect their public interest. Having said that, in the absence of any comprehensive study of South Asian BITs, the present study aims to examine around 200 BITs entered by the South Asian countries to identify the occurrence to which the BITs of South Asian countries address public policy issues, precisely the issues related to the protection of the environment and public health. In particular, the study would identify the frequency of treaty provisions dealing with environment and public health issues, the nature of such provisions, i.e., the commonalities and differences among them, and their possible implications before the ISDS tribunals. In conclusion, the authors would suggest a few ways to secure sovereign policy space for the South Asian Nations. Keywords: BITs, ISDS, environment, public health, south asian countries, regulatory measures, treaty obligations,
Biography
Swargodeep Sarkar studied Law at the University of Calcutta and obtained his LL.M. in International Law from the Tamil Nadu Dr Ambedkar Law University, Chennai. He is currently pursuing a PhD in international arbitration from the Indian Institute of Technology Kharagpur. His doctoral studies are fully funded by the Ministry of Education, Government of India. His research areas are public international law, international investment law, international commercial arbitration, and working of international courts and tribunals. He has been selected to attend the prestigious the Hague Academy of International Law, The Hague, Netherlands, and Arbitration Academy, Paris, France, Xiamen Academy of International Law. Recently his works have been published in leading Journals in International Law such as Cornell International Law Journal Online, International Arbitration Law Review, Liverpool Law Review, and Foreign Trade Review.
