By: Barnali Choudhury
Arbitral tribunals have misconstrued the purpose of international investment agreements (IIAs) by failing to factor in the development aspect of these agreements into their analysis. IIAs were constituted to protect foreign investment in order to promote economic development. However, arbitral tribunals have tended to focus mainly on the investor protection elements of IIAs, leading to impingements on human rights and the environment and leaving IIAs as a threat to sustainable development.
Drawing from all publicly available investment awards, a review of these awards found fifty-six awards in which human rights and environmental issues were implicated in investment disputes. The review further finds that in many instances arbitral tribunals downplay or dismiss noneconomic issues, leaving compromises to both human rights and environmental issues and constraints on state ability to regulate these areas. Based on the findings of this review, the Article makes suggestions for how states can best reform IIAs to help them better align with the development aspects of these agreements.