Effectively Bridging Human Rights and Investment Law

Moving from a contract theory approach, the current thesis argues that bilateral investment treaties (BITs) could be more effective and efficient if they effectively incorporate human rights standards.The work is structured as follows. Chapter II provides an analysis of: (i) the normative content of certain social, economic and cultural human rights; (ii) the State’s corresponding obligations with respect to these rights; and (iii) the human rights responsibilities and standards imposed on multinational corporations, arising from several international soft law instruments. The aim of this analysis is to: (i) clarify “what to be expected, and from whom”, when it comes to human right violations; and (ii) set the stage for the following chapters, by showing that human rights standards constitute part of the framework within which host States and multinational corporations should frame their conduct. Chapter III provides: (i) an overview of the definition and types of foreign direct investment (“FDIs”) as well as FDI-related trends; (ii) some considerations on the impact that FDIs can have on socio-economic rights; and (iii) the determinants of FDIs (i.e., what moves FDIs), including investment incentives and bilateral investment treaties. This last point is particularly relevant insofar as the determinants of FDIs are, or should be, considered by: (a) host States when framing instruments aimed at attracting FDIs to their markets, including investment BITs; and (b) arbitral tribunals when deciding whether a host State has breached an investor’s protection standard under the relevant BITs. A particular relevance will be given to the FET standard. Each section will also provide human rights considerations so as to allow “connecting the dots”. The aim is to show, among others, that multinational corporations’ activities, which are one of the major forms through which FDIs occur, are crucial to the progressive full realization of human rights, and the progressive full realization of human rights is crucial to MNCs’ activities. Chapter IV analyzes the interplay between host States’ obligations under human rights treaties and their investment obligations under BITs. To this end, the Chapter will: (i) provide an overview of the main obligations undertaken by host States under BITs and potential limitations thereon, so as to give “legal substance” to the above-mentioned mechanism described by economists as political risk mitigation tool; (ii) analyze in details the host States’ obligation to treat investors in a fair and equitable manner (“FET”) (with a specific focus on the investor’s legitimate expectations standard); (iii) discuss shortly the Argentine arbitration “saga” generated by the 2001-2001 Argentinian crisis. Chapter V analyzes: (i) the contract theory approach and its applicability to BITs; (ii) certain risks and costs associated with BITs that may, in certain cases, have negative impact on the regulatory powers of host States (and, in turn, on the fulfilment of human rights); and (iii) the provisions that might be used to effectively insert human rights considerations into BITs (also in light of the consideration and case law analyzed in the previous sections). The final aim is to show, among others, that the effective integration of human rights in BITs might render these treaties more efficient and effective in their double aim of attracting and protecting FDIs.