Tag Archives: Investment agreements

More environmental languages in IIAs

green leaves background in sunny dayInternational investment agreements (“IIAs”) have increasingly addressed environmental concerns related to investment activity.

Based on a survey conducted by the OECD, inclusion of environmental languages in IIAs is becoming more common. The sample in this survey consists of 1,623 international investment agreements, thus covering roughly half of the global investment treaty population.

The first treaty to include environmental language in the sample is the 1985 China – Singapore BIT. In 2008, 89% of newly concluded treaties includes such language. Further, as we have written before, sustainable development is at the heart of the newly-adopted IIAs in 2014 where most of these treaties include a sustainable development-oriented features.

The most common environmental language is a provision which preserves policy space for environmental regulation. For example, Hungary – Russia BIT provides that the agreement does not preclude the application of measures to protect the environment and public health. Another type is a provision which discourages state parties to lower their environmental standards to attract investments.

Some IIAs have referred to international environmental treaties. The Energy Charter Treaty in its preamble specifically recalls the United Nations Framework Convention on Climate Change. The preamble of the new Norwegian BIT draft also recognizes that international environmental treaties are to be interpreted in mutually supportive manner.

Overall, 30 of the 49 countries covered by the survey have included environmental language in at least one of their IIAs. Canada is the country with relatively highest tendencies to include such language (83% of its sample treaties), followed by New Zealand, Japan, the United States and Finland.