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This report by the International Institute for Sustainable Development (IISD) examines the legal complexities of 'indirect expropriation' in international investment law. It analyzes how the lack of a clear definition in most investment treaties creates tension between the protection of foreign private investments and the sovereign right of host states to regulate in the public interest, particularly regarding health, environment, and human rights.

This report reviews the 2002 Belgian Model Bilateral Investment Treaty (BIT), arguing that it follows a traditional European model that provides extensive protections for foreign investors while imposing broad obligations on host states. The authors contend that the model lacks necessary refinements to preserve policy space for sustainable development, environmental protection, and labour rights, and fails to address governance issues in investor-state dispute settlement.