International Legal Framework on Foreign Investment

The document examines the proliferation of bilateral and regional investment treaties, highlighting how they limit the ability of host states to regulate for public health and the environment. It critiques the investor-to-state dispute settlement mechanism for its lack of transparency and the use of 'indirect expropriation' claims to challenge environmental laws. The author recommends that new governance principles for foreign direct investment in hazardous activities ensure public transparency in arbitration, public consultation on host government agreements, and a commitment by companies to abide by evolving environmental and health legislation.

• The current international legal framework for foreign investment promotes liberalization and investor privileges but fails to address environmental and social issues or strengthen corporate governance and accountability.
• Bilateral and regional investment treaties can undermine national sovereignty and the ability of states to regulate public health and environmental protection.
• Specific treaty obligations, such as 'National Treatment' and 'Minimum Standard of Treatment', are often interpreted by tribunals in ways that favor business considerations over sustainable development and environmental circumstances.
• The expansion of the concept of 'indirect expropriation' allows investors to challenge regulations intended to protect public health and the environment, potentially creating a 'chilling effect' on government regulation.
• Investor-to-state dispute settlement (ISDS) has shifted from a last-resort protection mechanism to an aggressive tool used by investors to push agendas, often characterized by secrecy and a lack of public access to documents and hearings.
• Host government agreements, such as those for the Baku-Tbilisi-Ceyhan (BTC) pipeline, often include stabilization clauses that may discourage governments from adopting new environmental or health laws to avoid restoring the investor's 'economic equilibrium'.

APA

Bernasconi-Osterwalder, N. (2003). International Legal Framework on Foreign Investment. Center for International Environmental Law. https://www.ciel.org/wp-content/uploads/2015/03/Presentation_Kiev_Final-21May03.pdf

Chicago

Bernasconi-Osterwalder, Nathalie. International Legal Framework on Foreign Investment. Center for International Environmental Law, 2003. https://www.ciel.org/wp-content/uploads/2015/03/Presentation_Kiev_Final-21May03.pdf.

Wikipedia

{{cite report |last1=Bernasconi-Osterwalder |first1=Nathalie |title=International Legal Framework on Foreign Investment |publisher=Center for International Environmental Law |date=23 May 2003 |url=https://www.ciel.org/wp-content/uploads/2015/03/Presentation_Kiev_Final-21May03.pdf |access-date=17 August 2026 |via=Climate Insights Directory}}

BibTeX

@techreport{bernasconiosterwalder2003international, author = {Bernasconi-Osterwalder, Nathalie}, title = {{International Legal Framework on Foreign Investment}}, institution = {Center for International Environmental Law}, year = {2003}, month = may, url = {https://www.ciel.org/wp-content/uploads/2015/03/Presentation_Kiev_Final-21May03.pdf}, urldate = {2026-08-17}, note = {Indexed by Climate Insights Directory} }