If You Are Not Part of the Solution, You Are the Problem: Article 37 of the EU Charter as a Defence for Climate Change and Environmental Measures in Investor-State Arbitrations – Joint 2nd Prize Winner Essay competition 2020

Abstract

Climate change is severely impacting the survival of humankind on earth. In the European Union (EU), the Charter of Fundamental Rights (EU Charter) codifies environmental protection as part of the EU’s corpus of fundamental rights protection and states that “a high level of environmental protection and the improvement of the quality of the environment must be integrated into the policies of the EU and ensured in accordance with the principle of sustainable development”. By virtue of this article, the EU has elevated environmental protection to the level of constitutionality. Environmental concerns have played a critical role in investor-state arbitration. This article submits that Article 37 of the EU Charter might be a viable defence for Member States of the EU (Member States) that adopt climate change and environmental measures. Such defence would not consist of a jurisdictional challenge based on the Achmea decision but of a defence based on the applicable law which protects the notion of sustainable investment enshrined in the applicable international investment agreement. Article 37 of the EU Charter could, therefore, operate a powerful tool to foster environmental protection in investor-state disputes and, therefore, address one of the most widespread complaints in the backlash against investor-state arbitration.