Research On Sustainable Development-oriented International Investment Treaties

Foreign investment,especially foreign direct investment(FDI),plays an important role in economic development at national and international levels.While FDI helps promote the economic development of the recipient countries,transnational investment activities may also give rise to sustainable development challenges.Such challenges could be particularly profound in some developing countries that do not have a sound legal system,strong law enforcement and high level of investment governance.IIAs form the main component of international investment law,which serves the major legal basis for global investment governance.The world has witnessed a proliferation of IIAs,especially in recent decades.According to the United Nations Conference on Trade and Development(UNCTAD)statistics,states around the world have concluded nearly 3000 BITs and over 360 other types of IIAs.IIAs are composed of various types of international agreements or treaties,mainly including BITs,investment chapters of FTA and regional or international investment treaties,such as the Energy Charter Treaty(ECT),and the Convention on the Settlement of Investment Disputes between States and Nationals of Other States(ICSID Convention).It is widely agreed that IIAs are not primarily designed to facilitate and promote sustainable development.Yet,given the cornerstone role of IIAs in global investment governance and the profound sustainable development challenges faced by the international community,there emerges a growing call that sustainable development should be integrated in investment policy-making and IIA-making.Many states and the international community have gradually shifted the development paradigm from stressing economic growth to emphasizing the overall development in economic,environmental and social dimensions.There is a growing consensus that foreign investments should not only contribute to economic growth,but also should contribute to the promotion of the sustainable development of the host states.The international community now steps into the era of global governance.The international investment governance regime is experiencing a process of transformation towards greater transparency,participation of non-state actors and reliance on soft law norms.Some states have revised their model BITs for future BIT-making or renegotiation,some have denounced the ICSID Convention and decided to terminate their BITs,some are aggressively engaged in IIA-making,and some have demanded a profound reform of the existing ISDS mechanism.Such a background demonstrates the pressing need to reform the existing IIA system.The concept of “sustainable development” can make use of the reform wave of IIAs to influence the development direction of it.Indeed,making sustainable development-oriented IIAs has become a recent trend in global IIA-making.As observed by the United Nations Conference on Trade and Development(UNCTAD),IIAs concluded in 2017 have shown a clear sustainable development orientation,as these IIAs not only include a larger number of provisions explicitly referring to sustainable development issues,but many also incorporate general exceptions.The balance of the interests of host country,home country and investor has become the core pursuit of sustainable development-oriented IIAs instead of protection of investors' interests only.The “sustainable development” clause in the international investment agreements not only restricts the behavior of the host country,but also increases the empowering content of its regulation power.The expanded interpretation of“investment” by the Investor–state arbitration tribunal provides a basis for the host country to exercise its regulatory power.The host country can exercise regulatory powers including expropriation and performance requirements within a limited scope to ensure that foreign investment can promote its “sustainable development”.One of the most surprising changes in IIAs is the inclusion of "Corporate Social Responsibility",which creates responsibilities for foreign investors such as environmental protection and labor through investment treaties.Although the requirements for investor liability in most agreements remain at the stage of appeals in the preamble,it can be seen that it has become a trend to bring investor behavior into the jurisdiction of IIAs.As a global issue,“sustainable development” is difficult to achieve significant results relying solely on the regulation of host countries.In “sustainable development” oriented international investment agreements,the role of home country is magnified.A series of provisions related to the home country are included in the agreement,among which the obligations of the home country are particularly eye-catching.Cooperation between host and home countries in the regulation of FDI requires the establishment of good enforcement and safeguard mechanisms,in addition,the regulation cooperation between host country and home country has been widely discussed.The reform of dispute settlement mechanism and the emergence of dispute prevention mechanism are the centralized embodiment of the regulatory cooperation between host country and home country.As far as China is concerned,in the process of the global transition to the“sustainable development” of the IIAs,cultural confidence should be built and unique national wisdom of China on “sustainable development” should be incorporated into the text mechanism of the agreement.We should base ourselves on the national conditions of "identity confusion",grasp the text selection under the dual vision of host country and home country,and combine with the strategic analysis of other important economies to put forward Chinese proposal.It is a great opportunity for China to become the advocate in the rule-making,should be seized firmly to seek the leading position in the global investment governance,and change the “rule pressure” faced by the passive application.