The Security of International Investments: a Synthesis of Impacts on Public Policies and Domestic Law of Host States

Abstract

The subject of this dissertation is the relationship between the protection of foreign investors' investments under international investment law and the domestic law of host states. Two questions arise in this connection. First, is the promotion and protection of investments comprised in investment agreements compatible with states' domestic law? Second, public policies of host states may appear to be in contradiction with an increased international security of investments. When such a conflict is challenged by foreign investors, what are the consequences for both parties? In general, investments are transactions that are private in nature, whose aim is to generate a positive rate of return. Investments can have pervasive consequences on countries' welfare, including, for example, the consequences on sustainable development; the use and protection of natural resources; and employment, to name a few. It is the role of the governments to balance these sometimes conflicting public and private interests. As of today, it seems that the regime established according to investment treaties does not strike an appropriate balance between the various interests concerned. After a brief look at the legal framework protecting foreign investments, the conflict areas between investment treaty provisions and domestic public policies of host states are explored through an empirical analysis of some case studies and recent arbitrations. Finally, this dissertation holds that, at a substantive level, investment law is a part of international law. Thus it must be consistent with its norms and it has to be interpreted in accordance with customary rules of treaty interpretation. The dissertation concludes by suggesting the creation of a state-investor relationship and advocates, in part, the establishment of development objectives in investment treaties as well as the inclusion of rights and obligations for all parties involved.