The right of states to regulate in their public interest and the right of investors to receive fair and equitable treatment: The search for a balance in treaties and cases on international investment law
In: https://dspace.library.uu.nl/handle/1874/373962
At present, we see that a new generation of international investment agreements (IIAs) is being negotiated, e.g. CETA, TTIP and multiple European Union trade and investment treaties. In these processes, negotiators of contracting states articulate the issue of the host state's 'right to regulate' and discuss in which way, in IIAs, 'policy space' can be preserved for host states. The goal is to ensure that a host state, which wants to welcome foreign direct investment, retains the power to change its existing policies and introduce new ones in furtherance of public interests, and/or in order to comply with its obligations under international human rights, environmental and health treaties. Nonetheless, the host state also needs to provide the foreign investor with a certain level of 'investment protection' and comply with international investment law standards, such as the fair and equitable treatment standard (FET). The FET standard has become one of the most important pillars of foreign investment protection under international investment law. The number of investment decisions in which this standard has been evoked, has grown enormously in the last two decades. Many of these conflicts reveal that on the one hand a foreign investor has an expectation of a 'stable legal and business environment', which is essential for the planning of investments. On the other hand, host states have a duty to regulate in the public interest, particularly in the light of 'changing social, economic and political circumstances'. In this book, an overview of the various types of FET clauses in IIAs is presented as well as an analysis of pertinent case law. In the analysis of the cases, the question is addressed in which way a host state can lawfully exercise its right to regulate in the public interest, while remaining in compliance with its obligation to provide fair and equitable treatment to a foreign investor under applicable IIA(s). Reviewing the case law of the last decades, it has however become clear that the text of many ...