International Investment Law and Globalization

Foreign Investment, Responsibilities and Intergovernmental Organizations

Jean-Michel Marcoux

• Publisher: Routledge
• Year: 2018
• Topic: Law
• eBook ISBN:
  9780429946998
• Subtopic: International Law
• Index: Law

In a context of neoliberal globalization, have the processes of elaboration and implementation of foreign investors' responsibilities by intergovernmental organizations reached the realm of legality? Using an analytical framework and a methodology that combines international law with international relations, this book provides a twofold answer to this
question. First, it demonstrates that the normative integration of foreign investors' responsibilities in international investment law is fragmented and consistent with the interests of the most powerful actors. Second, while using the interactional theory of international law to assess the normative character of several international instruments elaborated and implemented by intergovernmental organizations, it highlights the sense of obligation that each instrument generates. The analysis demonstrates that such a codification process is marked by relations of power and has resulted in several social norms, with relatively few legal norms.

Part I

Foreign Investors’ Responsibilities and International Investment Law

A Macro-Level Analysis

Analyzing the processes of elaboration and implementation of foreign investors’ responsibilities by intergovernmental organizations calls upon a consideration of these responsibilities in international investment law. Efforts to codify standards of appropriate conduct for private actors operating abroad have emerged in a context where states ratify international agreements to provide protections to foreign investors. Part I of this book thus examines the normative integration of foreign investors’ responsibilities in international investment law. Instead of suggesting that this regime fails to impose any obligations on foreign investors, it is here demonstrated that the normative integration of foreign investors’ responsibilities is fragmented and consistent with the interests of the most powerful actors involved in the international investment lawmaking process. When considering various areas of responsibilities (i.e. human rights, environmental protection, labour rights and corruption), one can identify important distinctions regarding the extent to which they are taken into consideration in international investment agreements (Chapter 1) and decisions from arbitration tribunals (Chapter 2). This examination is supplemented with a critical discourse analysis of statements submitted by international actors to demonstrate that this fragmented normative integration is consistent with the interests of actors that can more directly influence the outcome of the normative process (Chapter 3).

1 Addressing the Lack of Accountability in International Investment Agreements

Introduction

Concerns regarding the lack of accountability of foreign investors remain of the utmost relevance when one looks at current discussions in international investment law. Among the several aspects that have been addressed with respect to this branch of international law, the asymmetry of obligations in international investment agreements (IIAs) is a recurring theme.¹ While these agreements subject host states to specific rules pertaining to the protection of foreign investors and investments, IIAs are often considered as being silent as far as the responsibilities of foreign investors and home states are concerned.

As a first step to analyze the normative integration of foreign investors’ responsibilities in international investment law, Chapter 1 focuses on the provisions of IIAs to examine whether these agreements adequately take into consideration the negative impact that foreign investors’ activities can have in local communities and the environment. In line with the assumptions of the legal pluralist approach,² this chapter considers functionally differentiated normative orders pertaining to areas of foreign investors’ responsibilities that have emerged in parallel to the elaboration of rules pertaining to the protection of international investment. In addition to the codification of standards regarding human rights, several intergovernmental organizations have adopted initiatives with respect to environmental protection and labour rights. What is more, informal international instruments and international treaties have been negotiated under the auspices of intergovernmental organizations regarding corruption. Having acknowledged the existence of these normative orders, it becomes possible to assess the extent to which these four areas of foreign investors’ responsibilities (i.e. human rights, environmental protection, labour rights and corruption) are normatively integrated in IIAs.

This chapter focuses on the current practice of states when drafting IIAs. Although a survey completed by the Organisation for Economic Co-operation and Development (OECD) in 2014 suggests that provisions generally relating to the advancement of sustainable development or to the promotion of responsible business conduct have become a dominant treaty practice in recent years, the same survey concludes that only 12% of IIAs include such provisions.³ An exhaustive presentation of formulations that are included in IIAs to account for any issues that transcend investment protection is beyond the scope of this research. Rather, the analysis focuses on provisions that can be used to address harms related to foreign investors’ activities. A consideration of functionally differentiated normative orders that relate to areas of foreign investors’ responsibilities and that evolve in parallel to international investment rules allows concluding that the normative integration of foreign investors’ responsibilities in IIAs is fragmented. In fact, most provisions found in these agreements emphasize the voluntary character of corporate social responsibility and rely on hortatory language when it comes to the areas of human rights, environmental protection and labour rights. These provisions generally point toward a relatively weak normative integration of these concerns in IIAs (1). By contrast, the provisions that are likely to bear the most concrete consequences for foreign investors are those in which states recall their obligations to prosecute corrupt practices or prevent an investor from submitting a claim to arbitration if the investment has been made through corruption (2).

Before developing the argument any further, it is important to emphasize that the analysis provided in Chapter 1 and Chapter 2 differs from studies that address the conflict of norms.⁴ While the theory of norm conflict presents incompatibility as a situation in which applying one legal norm necessarily implies the violation of another, such incompatibility is limited to instances in which a simultaneous observation of two legal norms by the same actor is impossible. The analysis of the normative integration of foreign investors’ responsibilities in international investment law requires a more flexible conception of compatibility. The present analysis thus focuses on the interaction between international obligations of states under international investment law and other norms that relate to the conduct of foreign investors. Instead of assessing whether emerging norms seeking to hold foreign investors accountable under international law conflict with international investment law, the aim of this chapter is to account for the extent to which these different responsibilities coexist under international investment law. Restated, the idea is to assess the extent to which states’ obligations under international investment law can be interpreted in light of foreign investors’ responsibilities in various areas that form functionally differentiated normative orders. Instead of scrutinizing potential conflicts of norms, one can thus consider various degrees of normative integration between these normative orders and international investment law.

1. Provisions on Foreign Investors’ Responsibilities

With a view to addressing harms related to foreign investors’ activities, states can choose among various possibilities to explicitly account for the responsibilities of these private actors within IIAs. More specifically, three different avenues are discernable from the practice of states: addressing the matter in the preamble of IIAs (1.1), including a general reference to foreign investors’ responsibilities in a separate provision of the agreement (1.2) and referring to specific instrume...

Table of contents

• Cover Page
• International Investment Law and Globalization
• Routledge Research in International Law
• Title
• Copright
• Dedication
• Contents
• Acknowledgments
• List of Abbreviations
• Introduction
• Part I Foreign Investors’ Responsibilities and International Investment Law: A Macro-Level Analysis
• Part II The Normative Character of International Initiatives: A Micro-Level Analysis
• Conclusion
• Bibliography
• Index