Abstract

The limit of host states’ right to regulate foreign investment within their jurisdiction has been the main, yet unresolved issues in international investment law. This makes it more difficult, given the global structure of investment law that consists of networks of Bilateral Investment Treaties (BITs). This article will not deal with the question of optimal structure of regulatory discretion under BITs which is still debatable among scholars. The central agenda of this article is to address the precondition for an efficient outcome to materialize within the complex web of BITs already signed among states. It is even more complex to be concluded. This issue is due to the absence of international coordinating institution, letting alone that of global supranational authority. This is different from the case of domestic regulatory takings which “simply” requires the correct information and measure from the benevolent government, that means, the existence of an efficient provision, if any, will not necessarily result in an efficient outcome. The main research question addressed in the article is: under what condition a capital exporting state could introduce higher flexibility for regulating public interest in an investment treaty negotiation? The article offer the answer on issue linkage between the level of protection under BIT, the degree of openness of access to domestic legal and regulatory making of the host state, and the foreign investor’s capabilities to deal with the trade-off. Ceteris paribus, the linkage enables a set of feasible Pareto improving deals out of BIT negotiation

Highlights

  • The limit of host states’ right to regulate foreign investment within their jurisdiction has been the main, yet unresolved issues in international investment law

  • Under a standard investment treaty, regulatory measures to protect or promote social and environmental objectives, that diminish the value of foreign investments, could be deemed as regulatory expropriation; pursuant to which the host state is required to pay for compensation to the foreign investor under the shadow of direct investor-state arbitration

  • As a response to the question of which condition that would allow a capital exporting state to introduce higher flexibility for regulating social and environmental affairs in a BIT negotiation, the article offer the answer on issue linkage between the following issues: 1). the level of protection under BIT; 2)

Read more

Summary

Introduction

The limit of host states’ right to regulate foreign investment within their jurisdiction has been the main, yet unresolved issues in international investment law. Protection under BITs and influences over domestic legal system The analysis of this trade-off will answer the article’s main question of explaining normative conditions that promote higher flexibility for regulating social and environmental issues in BITs. The main research question addressed in the article is: under what condition a capital exporting state could introduce higher flexibility for regulating public interest in an investment treaty negotiation?. This includes the emerging jurisprudence in investor-state arbitrations in the subject matter, analyses theoretical economic foundations of the issues, develops an informal model that attempts to explain a possible Pareto improving exchange between capital exporting states and potential host states in a BIT negotiation, and concludes the findings and summarizes the answers of the article question

BITs and Social and Environmental Provisions in a Nutshell
Benefit of BITs
The Route to Foreign Investors’ Choices
Issue Linkage
Determinants for Changes in Foreign Investors’ Preferences
Organization of Legal System and Foreign Investors’ Choices
Conclusion
Full Text
Paper version not known

Talk to us

Join us for a 30 min session where you can share your feedback and ask us any queries you have

Schedule a call

Disclaimer: All third-party content on this website/platform is and will remain the property of their respective owners and is provided on "as is" basis without any warranties, express or implied. Use of third-party content does not indicate any affiliation, sponsorship with or endorsement by them. Any references to third-party content is to identify the corresponding services and shall be considered fair use under The CopyrightLaw.