Reconciling International Investment Law and Sustainable Development : Necessity or Luxury?

The paper aims at studying the potential accommodation of the concept of sustainable development within the regime of international law regulating foreign direct investment (FDI). Reconciliation of international investment law and sustainable development is part of the current awareness of necessity to broaden interests involved in the international investment regime responding to such tensions as possible “regulatory chill”, negative effect of FDI on development of host States and global commitment to promote sustainable development in every level of decision-making. The paper consists of two main parts and focuses on: (1) the notion of sustainable development and its legal character, and (2) proposed methods of accommodation of sustainable development in the international investment law regime through normative integration of sustainable development or its elements in the IIAs texts and judicial reasoning methods available to adjudicators. Detailed analysis of such recent IIAs as CARIFORUM EPA and various Model BITs will be provided to resemble the current successful incorporation of sustainable development concerns in investment regime which will possibly influence the drafting of future IIAs. The paper is designed to offer solutions for rebalancing FDI and to contribute to the formulation of international investment law in a more integrated, principled manner in the context of fragmentation versus unity of international law. Presented at the SIEL 2010 Conference in Barcelona