Towards Environmental Rule of Law? Environmental Standards for Investment in the Belt and Road Initiative, Asian Infrastructure Investment Bank and BRICS New Development Bank

The relationship between investment and the rule of law includes the question whether investment activities can contribute to strengthening the rule of law in locations of investment activity. This question can pursued from the perspective of either a ‘thin’ (or ‘formal’) or a ‘thick’ (or ‘substantive’) conception of the rule of law. This chapter investigates the capacity of investment programmes and institutions to contribute to realizing a substantive vision of rule of law, embodied in the concept of ‘environmental rule of law’ which has been elaborated in recent years by intergovernmental meetings and international organizations. In particular, the chapter examines the capacity of recently established projects of China and other emerging economies to develop investments which are consistent with high standards for environmental conservation, thus upholding ‘environmental rule of law’. These projects are the Belt and Road Initiative (BRI) and the two China-based multilateral developments banks: The Asian Infrastructure Investment Bank (AIIB) and the BRICS New Development Bank (NDB). The chapter analyses the regulatory frameworks of each of these three initiatives regarding environmental standards, and considers the environmental impacts of their early projects. The chapter concludes with a discussion of the BRI, AIIB and NDB as instances of competitive integration, which suggests that standards and norms for investment will be offered by multiple centers in an increasingly multipolar world. This multipolar reality will offer instances of both standard divergence and convergence on topics such as sustainable investment, requiring actors such as the European Union to pursue a nuanced strategy entailing both cooperation and competition