The public interest in international investment arbitration on natural resources

Abstract

Although the concept of sustainable development remains controversial, the 2012 outcome document of the Rio+20 Conference on Sustainable Development confirmed that the promotion of sustainable development requires the integration of economic, social and environmental aspects. Promoting sustainable development in all three of these areas is especially challenging in the context of foreign direct investment (FDI). Although foreign investments may stimulate the economic growth that is a necessary tool for achieving sustainable development, they can, at the same time, have a negative impact on the social and environmental sustainability goals of the host state (Orellana, 2012: 3). To prevent the possible negative effects of (both domestic and) foreign investments, host states subject investors to regulatory measures that aim to enhance the general well-being of the population, in other words, the public interest. However, these domestic public interest measures often conflict with the standards of protection offered to foreign investors in international investment agreements (IIAs).