Human Rights, Risks, and New Strategies for Global Investment

Abstract

It is often argued that the rules and practices of foreign direct investment can threaten the protection of human rights. That danger used to arise from the fact that the investors simply dismissed concern for these rights as their responsibility. This is no longer so. Major lenders and project sponsors now regularly make commitments to human rights and to allied principles governing environmental protection and health and safety. The danger instead arises from the way in which the two domains are being brought together. The collision that threatens is not over whether, but over how commercial imperatives are to be integrated with this branch of social justice. The article aims at diagnosis of the problem and considers some possible solutions to it. It frames the issues in terms of several competing fundamental principles, and draws on concrete examples from the investment contracts regulating the Baku -- Tibilisi - Ceyhan (BTC) and Chad/Cameroon pipeline projects. Once the areas of potential collision between these contracts and human rights requirements are explored, the essay considers a significant alteration to the BTC agreement, designed to open it up more effectively to human rights concerns. The analysis ends with a consideration of some model clauses for investment contracts in the future. Copyright 2006, Oxford University Press.