Reconciling Investment Liberalization with Ecological Stewardship and Human Rights Protection

There has long been an inherent tension between the protection of foreign investment and the safeguarding of human rights and the environment, arising from a traditionally narrow conception of international investment law. Commentators have often argued that the discipline developed primarily to secure investment protection, leaving little room for non-economic considerations to take precedence over state commitments to investors.1 While this view is partially persuasive, particularly in the light of the largely non-binding nature of sustainability-related provisions in International Investment Agreements (IIAs), arbitral decisions over the last two decades reveal an incremental evolution of non-economic interests, increasingly drawing upon the norms of international economic law and international human rights law.2 Such counter-development of non-economic norms in international investment law demands a balancing approach to achieve sustainable development.3 While acknowledging the potential of Foreign Direct Investment (FDI) to advance sustainable development in host states, particularly in developing countries, Alam and Faruque, the authors of the book Foreign Investment, Human Rights and Environmental Protection: Striking a Balance for Sustainable Development, contend that integrating robust human rights and environmental protection provisions would more effectively promote the achievement of the Sustainable Development Goals (SDGs). They observed a notable increase in the inclusion of environmental and human rights provisions in IIAs concluded after 1992 and especially following the adoption of the SDGs in 2015. However, the authors criticize these provisions for their largely non-binding nature, which has limited their practical impact.