Settling Environment-Related Investment Disputes: Current Approaches and A Way Forward
Several years have passed since the relationship between the laws governing foreign investment and environmental protection started to receive well-deserved attention. Despite a vast quantity of recommended methods and emphasis on the importance of environmental considerations, recent awards have proved that the outcomes can still be surprising. Within this context, and as a possible response to this fear of unsettled conflict, this study explores the possibility of application of one particular principle of international environmental law, namely the Precautionary Principle. The overarching aim of this thesis is to provide a comprehensive analysis of the content and the function of the precautionary principle. This will to provide an interpretative tool for investment tribunals. To this end, this thesis adopts a two-pronged approach. The first approach will analyse environment-related investment disputes to find the current state of play and understand the existing patterns. This analysis will demonstrate that when interpreting treaty provisions in disputes with environmental components, tribunals need to take into account the peculiarities of environmental regulation and the different mechanisms in the field. Having concluded the current state of play in environment-related investment dispute settlement. The second part of this thesis, which consists of two chapters, will explore the evolution of environmental policing, and will identify the different mechanisms that have been established to ensure effective protection. It will examine the precautionary principle as one of the crucial methods for responding to the limitations of previous mechanisms. It will also discuss the principle’s core elements and different functions (procedural and substantive) under the international law. Following a comprehensive analysis of different international environmental instruments, a precautionary test will be introduced, for application by investment tribunals. This study is first and foremost an attempt to contribute to the current dialogue by providing a conceptual framework for the precautionary principle. Despite some piecemeal studies on the role that the principle could play in investment treaty arbitration, no systemic research has yet been conducted to provide a conceptual framework for its application under an investment treaty. Moreover, while touching upon controversies regarding the status of the principle, this research will suggest different paths to apply the principle as a soft law instrument, capable of guiding the interpretation of treaty provisions. Most importantly, by providing a benchmark through the elements of the precautionary principle, this research will suggest that the principle could function as a double-edged sword by suggesting an objective test, which is a set of questions that could inform the tribunals’ decision.
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