Multinational corporations as a new subject of international investment law: Rights conferred to investors under the ISDS provisions of intergovernmental and bilateral treaties and ways to balance this new reality

Abstract

The international investment regime has faced several criticisms already since the mid-2000s. Scholars and civil society have called both for refinement of the content of the numerous bilateral investment treaties (BITs) and other international investment agreements (IIAs), as well as for reconsideration of the purpose of the investment regime. Over the past few years, we face a phase of ‘re-orientation’ of international investmen law. The 1990s rush of conclusion of BITs is slowing down and gives way to the negotiations at the regional level. This era of transition from investment bilateralism to regionalism presents us with a paradox, which has revived the question of the legal status of multinational corporations. On the one hand, the mega-regional Free Trade Agreements (FTAs) concluded and being negotiated advance the protection of investors and facilitate their access to Investor-State dispute settlement (ISDS). On the other hand, States attempt to react to investors’ growing power either by opting out from ISDS or by reforming investment standards to better reflect their interests. One of the primary objectives of States during this phase of re-orientation of international investment law is safeguarding their right to regulate for public purpose interests. In order to meet this goal, the past few years States slightly shift towards sustainable development, a concept that has been criticized as threatened by the old IIA regime. The adoption of a sustainable development-oriented approach in investment law also depends largely on the tribunals that are tasked with the interpretation of IIAs. Despite their current reluctance to engage in a sustainable development discussion, this situation may alter with the conclusion of the post-2015 FTAs. These treaties make more references to the principle, both in separate chapters and in their investment chapters. They also place at the arbitrators’ disposal interpretative tools for the integration of sustainable development into their argumentation. This thesis concludes that regionalism has not be suitable to resolve the ‘battle’ of predominance between investors and States. It argues that other options that may be more suitable to strike a delicate balance between the protection of foreign investment and the public interests of States, and reflects on changes that may render the investment regime more compatible with sustainable development. Special focus is given to the drafting of a multilateral investment treaty, which, although could serve as a ‘golden mean’ between States and investors, still raises concerns and seems as as farfetched idea.