Environmental Engineering Reference
In-Depth Information
several environmental-protection-based claims are pending against both countries, includ-
ing a suit against Canada for banning the pesticide Lindane, and another against the USA
targeting environmental measures imposed by the state of California on an open-pit gold-
mining operation licensed to a Canadian mining company (Newcombe, 2007).
Environmental and social justice NGOs and scholars critical of the emerging IIA
regime have voiced a variety of concerns with respect both to the substantive rules embed-
ded in the regime and the process by which these rules are enforced. They contend that
the IIA regime represents a neoliberal-inspired Economic Bill of Rights for TNCs that
undermines the sovereignty of host countries (often LDCs desperate to attract FDI) to
determine and implement key environmental and sustainable development priorities. It is
also contended that IIAs are asymmetrical: conferring rights but imposing no correlative
responsibilities on investors. Moreover, critics claim that the legal uncertainty surround-
ing the scope and ambit of investor rights, combined with the economic risks and costs
associated with defending potential claims, has a chilling e
ect on governments' willing-
ness to regulate in the public interest. Finally, it is argued that the arbitral processes and
fora currently in place to adjudicate these cases (ICSID - International Centre for
Settlement of Investment Disputes; UNCITRAL - UN Commission on International
Trade Law; and other bodies originally constituted to deal with private international com-
mercial disputes) are ill suited to deal with what are fundamentally public policy matters
(Van Harten, 2007).
Defenders of the current IIA regime typically reject the 'sovereignty critique' described
above out of hand. While it is generally conceded that such agreements signi
ff
cantly
strengthen the hand of TNCs when dealing with host states, most would strongly contend
that entry into the regime is itself an exercise of sovereign will, re
fi
ecting a reasoned polit-
ical judgment that the supposed costs of entry are outweighed by the bene
fl
ts in terms of
increased FDI. They also point out that accession into the IIA regime is not an all-or-
nothing proposition since governments are allowed to reserve (exempt) from such agree-
ments certain economic sectors or non-conforming measures. Further, although some
regime defenders will concede that the IIA jurisprudence is inconsistent and unpre-
dictable, and that many early investment treaties failed adequately to recognize the right
of host states to regulate in the public interest, most strongly assert that it is premature to
draw conclusions about what remains an embryonic regime (Newcombe, 2007). Indeed,
it is claimed that tribunals 'get it right' most of the time, even in cases frequently cited by
opponents as illustrations of where they have erred (Soloway, 2003). Likewise, arguments
about 'regulatory chill' are characteristically dismissed as unproven and premature
(Soloway, 2003; Franck, 2005). And while there is some acceptance in these quarters of
the need for procedural reform, most argue that the necessary changes can be incremen-
tally accommodated within existing arbitral institutions (Franck, 2005).
fi
Investor protection architecture and procedures
IIA regime overview
Given the limitations of early treaties of 'Friendship, Commerce and Navigation' and
the di
culties of securing multilateral investment treaty agreements (Franck, 2005,
pp. 1525-7), countries in recent decades have turned to IIAs to promote and protect
foreign direct investment. It is estimated that by 2006 over 2500 IIAs have been negotiated,
