Sustainable development in new generation FTAs: Could arbitrators further the principle through ISDS?

• Author: Maria Chochorelou,Carlos Espaliu Berdud
• Published date: 01 July 2018
• DOI: http://doi.org/10.1111/reel.12231
• Date: 01 July 2018

ORIGINAL ARTICLE

Sustainable development in new generation FTAs: Could

arbitrators further the principle through ISDS?

Maria Chochorelou

|

Carlos Espaliu Berdud

Correspondence

Email: mchochorelou@uic.es Despite the strong linkage between sustainable development and investment, older

international investment agreements (IIAs) have been criticized as threatening the

sustainable development of the host State. In recent IIAs, a slight shift towards tak-

ing the principle into account can be observed. However, the adoption of a sustain-

able-development-oriented approach in investment law depends largely on the

tribunals that are tasked with the interpretation of IIAs. This article examines the

role of arbitrators in promoting sustainable development. Despite their current

reluctance to engage in a sustainable development discussion, the situation may

alter with the conclusion of so-called new generation free trade agreements. These

agreements make more references to the principle and place at the arbitrators’dis-

posal interpretative tools for the integration of sustainable development into their

argumentation. Finally, the article reflects on changes that would render the invest-

ment regime more compatible with sustainable development.

1

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INTRODUCTION

Sustainable development has been defined in various ways, but no

definition is yet universally accepted. The content of the principle

was initially shaped by the 1987 Brundtland Report

1

and the 1992

Rio Declaration, which placed human beings at the centre of sustain-

able development and put weight on environmental protection.

2

Since then its meaning has evolved; the Rio+10 and Rio+20 summits

described sustainable development in terms of three pillars: eco-

nomic, social and environmental.

3

The recent adoption of the 2030

Agenda

4

adds further elements to the concept. While still based on

the three pillars, Agenda 2030 also directly mirrors the human rights

framework; it is grounded in international human rights treaties, and

its Sustainable Development Goals (SDGs) and targets encompass

issues related not only to economic and social rights but also cul-

tural, civil and political rights.

5

Agenda 2030 also creates a strong linkage between sustainable

development and investment, explicitly linking its promotion with

substantive SDGs and targets.

6

The adoption of investment promo-

tion regimes is also mentioned as a means of implementation of the

Agenda.

7

However, the current regulatory framework for interna-

tional investment law has been criticized as threatening sustainable

development. These concerns reinforce the need for the establish-

ment of effective rules and processes to facilitate the realization of

the SDGs.

8

On a positive note, governments have embarked on a

path of reforming international investment agreements (IIAs), shifting

shyly towards sustainable development;

9

however, the steps taken

thus far do not seem to be sufficient.

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1

World Commission on Environment and Development, Our Common Future (Oxford

University Press 1987).

2

Rio Declaration on Environment and Development in ‘Report of the United Nations Con-

ference on Environment and Development’UN Doc A/CONF.151/26 (vol I) (12 August

1992) Annex (Rio Declaration).

3

‘Report of the World Summit on Sustainable Development, Plan of Implementation of the

World Summit on Sustainable Development’UN Doc A/CONF.199/20 (4 September 2002)

I, para 2; UNGA ‘The Future We Want’UN Doc A/RES/66/288 (27 July 2012) I, para 3.

4

UNGA ‘Transforming Our World: The 2030 Agenda for Sustainable Development’(2030

Agenda) UN Doc A/RES/70/1 (21 October 2015).

5

ibid para 10; see also Goals 5, 10, 16 and 17.

6

ibid Goals 1b, 2a, 7a and 10b.

7

ibid Goal 17.15.

8

L Cotula, ‘Foreign Investment, Law and Sustainable Development: A Handbook on Agricul-

ture and Extractive Industries’(International Institute for Environment and Development

2016) 6.

9

United Nations Conference on Trade and Development (UNCTAD), World Investment

Report 2015: Reforming International Investment Governance (UNCTAD 2015) 124.

DOI: 10.1111/reel.12231

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wileyonlinelibrary.com/journal/reel RECIEL. 2018;27:176–186.