Tempest in a Teapot? The International Investment Regime and State Backlash
In this article, Postdoctoral Fellows Malcolm Langford and Daniel Behn and coordinator Ole Kristian Fauchald discuss state strategies and tactics related to international investment treaties. Read the full article (SSRN).
The development of the modern investment treaty regime represents one of the most remarkable extensions of international law in the post-war period. However, the development of this regime has precipitated a backlash from some states, various civil society actors, and scholars over the past decade. For all intents and purposes, it appears that the central (underlying) reason for the backlash is one particular right: the remedial right granted to foreign investors allowing them to bring claims directly against the state hosting their investment. Many of these investment treaty arbitrations have resulted in sizable compensation awards for actions that many states believe are both legitimate and within their exclusive purview as sovereigns.
This tension between the rights afforded to private foreign investors under international treaties and the legitimate rights of sovereign states to regulate in the public interest of their domestic citizenry has culminated in efforts by states to weaken the regime. This chapter will examine the strategies and tactics that states are employing to scale back the unintended consequences of the international investment regime while simultaneously claiming adherence to its international legal obligations.