The Impact Of Corporate Social Responsibility Clauses On International Investment Arbitration

Traditional international investment agreements aim to protect the interests of investors and do not pay attention to the social responsibility of investors towards the host country.However,with the call of the international community for regulation of multinational enterprises,the deepening of the global sustainable development movement,and the trend of international investment law reform,many international investment agreements have introduced corporate social responsibility clauses in recent years.This new clause promotes corporate social responsibility for contracting parties and even sets legal obligations for investors,changing the existing rights and obligations relationship between investors and the host country.It has great potential for reform in the investment arbitration mechanism for investors suing the host country.This article starts with investment arbitration and analyzes the impact of corporate social responsibility clauses in investment agreements on investment arbitration.Firstly,there are different forms of corporate social responsibility clauses included in international investment agreements,including different content of clauses and ways of stipulating investor obligations.From the perspective of the generation of corporate social responsibility clauses,the value transformation of international investment law,the need for balance of interests in international investment agreements,and the reform of international investment dispute resolution mechanisms have jointly contributed to the development of corporate social responsibility clauses.Secondly,corporate social responsibility clauses have an impact on investment arbitration procedures and substantive matters.In the jurisdiction section of corporate social responsibility matters,a corporate social responsibility clause that clearly stipulates investor obligations can help arbitration tribunals establish jurisdiction over non economic matters,and at the same time,refuse jurisdiction over claims from investors who violate corporate social responsibility on the grounds that investors violate their obligations,excluding investments that violate social responsibility from investment protection.Introducing corporate social responsibility into the preamble,objectives,and purpose of investment agreements in the interpretation of corporate social responsibility clauses can help arbitral tribunals consider corporate social responsibility when interpreting purposes;At the same time,the corporate social responsibility clause introduces external legal sources and uses relevant international soft law rules to explain and reason,making it produce specific legal binding force,enhancing the enforcement of corporate social responsibility,and also generating the risk of contracting parties abusing and expanding the interpretation.Thirdly,corporate social responsibility clauses have an impact on the investment dispute resolution mechanism.The corporate social responsibility clause in the investment agreement text changes the original relationship between investors and the state’s rights and obligations in investment arbitration,and promotes the return of inter state relations and state obligations to the investment agreement.On the one hand,the corporate social responsibility clause has opened up a two-way channel for the host country to counterclaim investors,reflected in providing the legal basis for counterclaims for the host country,as well as establishing investor behavior standards and responsibilities.At the same time,the corporate social responsibility clause has also led to a shift in investment dispute resolution towards a national dispute resolution mechanism.Due to the obligation of contracting parties to promote corporate social responsibility,different corporate social responsibility standards will trigger a risk of protectionism or bottom-up competition,leading to disputes between contracting parties regarding the interpretation of this treaty obligation.Finally,China should construct corporate social responsibility clauses that represent China’s advocacy based on its current national conditions.As the largest developing country,China supports the legitimate regulatory rights of developing countries on issues related to investors and home country regulation.At the same time,the legislation on corporate social responsibility in China is also flourishing,moving from quantity growth to quality improvement.In response to this,China should actively respond to the concept of corporate social responsibility in international investment agreements,by incorporating China’s overseas investment management standards,flexibly adopting regulatory methods based on the situation of contracting partners,innovating diversified dispute resolution mechanisms characterized by mediation,and refining supervision and enforcement mechanisms,providing a Chinese solution for corporate social responsibility clauses.