On the Environmental Responsibility of Chinese Enterprises for Their FDIs in Countries within the One Belt and One Road Initiative

Abstract

Environmental protection is an essential aspect of the One Belt and One Road Initiative. Chinese enterprises need to pay close attention to their environmental responsibilities arising from their foreign direct investments (FDIs) in other Belt and Road countries. The determination of environmental responsibility is required to consider the sources of environmental obligations and operational logic of different dispute settlement mechanisms. Chinese enterprises face environmental obligations from four dimensions—that is, the Chinese government, host countries, international law, and other informal environmental obligations. The choice of a specific dispute settlement approach depends upon a series of considerations. When pre-judging and evaluating their environmental obligations, Chinese enterprises should, on the basis of the just and reasonable settlement of environmental disputes, clarify the environmental standards, identify the legitimacy and rationality of governmental regulations, review the objective environmental consequence(s), and determine the doctrine of liability fixation to be applied. Chinese enterprises should adjust their development principles of FDI, perform due diligence and prudence, and utilize multiple dispute resolution mechanisms.