The study of investment provisions in regional trade agreements reveals a gradual shift from protecting foreign investments to providing states with ampler regulatory space in the pursuit of sustainable development objectives. Since the very emergence of investment treaties in the 1950-60s, these instruments have traditionally aimed at providing guarantees to foreign investors regarding the stability and predictability of a host state’s investment framework. Conceived as a vehicle for both protecting and attracting foreign direct investment (FDI), the conventional purpose of investment treaties has therefore been to prevent the abuse of state sovereignty, often without according due consideration to the development dimensions of state measures. Nonetheless, the emergence of what UNCTAD has characterized as a “new generation” of investment policies – aimed at liberalising and promoting investment, while also incorporating flexibilities for public policy objectives – is forcing the traditional model to evolve.[1] In this context, as sustainable development gains momentum in international fora, provisions aimed at encouraging sustainable or socially responsible investment are also becoming the norm in international treaties. The definition of sustainable investment largely mirrors the goals of sustainable development as defined in the 1987 Brundtland report as well as more recent international instruments[2]. Accordingly, sustainable investment may...
Written by Marianna Nerushay