Framework for Achieving Sustainability in Investment Decisions: Refl ections on Rio+20

Abstract

The quest for environmental protection alongside economic development has been one of the prominent themes of political and legal discourse for several decades. This article examines the extent to which the principle of sustainable development (introduced under the Rio Declaration 1992) as a conceptual framework for balancing these competing goals has been integrated within the international investment law regime. It does this by examining decisions of investment tribunals on disputes relating to the legitimacy of government measures on environmental grounds. The analysis evidenced a lack of clear principles and mechanisms for balanced consideration of all competing interests; with the outcome being generally the subordination of environmental concerns to the protection of investors’ economic interests under international investment law. This supports criticism that although sustainable development has become one of society’s most sought-after goals, progress towards achieving this has been frustratingly slow. Against this background, the article goes on to determine whether the outcomes from the hugely anticipated Rio+20 Conference provided a framework or mechanisms that could promote sustainability integration in investment arbitrations. The article fi nds that while the outcome document from the main Rio+20 Conference did not provide such a framework, the Declaration from the Judge’s Conference, which was organised by UNEP and held simultaneously in Rio, provided some principles and mechanisms that, if fl eshed out, could contribute towards better integration of sustainability in the investment regime.