Energy intersects with the environment at every stage of its life cycle. The energy supply chain can have adverse effects on nature and public health, including GHG emissions, air, land and water pollution as well the generation of harmful waste, among others. In order to reduce our dependence on high-carbon energy, more needs to be done to increase renewable energy generation and improve energy efficiency. As energy is involved in trade and investment projects, it is covered by the trade and investment branches of international economic law and regulated in these fields mainly by the rules of the World Trade Organization (WTO), the Energy Charter Treaty (ECT), regional trade agreements (RTAs) and international investment agreements (IIAs). This book aims to contribute to the existing scholarship by providing a comprehensive analysis of the energy–environment nexus under trade law and investment law, showing, where relevant, their similarities, differences or even (potential) conflicts at the energy–environment interface. It examines the legal foundations of the energy–environment nexus and associated issues regarding trade control, subsidies, technical standards, investment protection and technology policies.

This introductory chapter situates the book within existing debates about the effects of investment treaties on national governance. The book’s methodology and conceptual framework in socio-legal and ethnographic approaches to law is described, and the typology of investment treaties’ impact on national governance used in the book explained: ideological-discursive effects and formal-institutional effects. Finally, the structure of the book is outlined.

This chapter centres on the economic and political climate of the period in which the selected countries concluded their first investment treaties. This period coincides with the end of the 1980s and early 1990s, when, as a result of the end of the Cold War, states across the globe adopted trade and investment liberalisation policies, increased property protections, and promoted liberal legal internationalism. It does so through four country snapshots. It then discusses the political debate regarding IIAs at the highest political level – in national parliaments – and in the media. When it comes to the debates in national parliaments, four themes emerged: (1) general lack of substantive parliamentary engagement; (2) belief that foreign investment was sufficiently protected under national laws; (3) substantive engagement on issues related to free transfers; and (4) more pronounced discussion when the investment connected with trade liberalisation, such was the case of Mexico. Regarding the media debate, the period of the conclusion of the first international investment agreements (IIAs) shows an almost total absence of reporting and media engagement.

The concluding chapter summarises the findings of the book and discusses their import. We highlight the constraining and empowering dynamics of IIAs in national governance and how they may influence the designing of more innovative and emancipatory economic policies, especially given the necessary transition to a green economy. We highlight some of the issues that developing countries, in particular, may want to consider.

This chapter does not provide an argument for or against the legitimacy of investment arbitration, but analyzes the discourse on legitimacy from a conceptual standpoint. Rather than offering an abstract analysis of different theoretical conceptions or concepts of legitimacy, it focuses on the concrete aspects addressed by different participants in the debate under the heading of legitimacy and the differences in underlying assumptions. It explains that because of similarities between investment arbitration and mechanisms of public law and governance, the legitimacy critique of investment arbitration in essence results from the observation of a mismatch between the private-law-inspired rationale of investment arbitration and the demands of principles of constitutional law that are generally used to assess the legitimacy of governance mechanisms. The chapter then turns to how states and policy-makers, arbitral tribunals, and scholarship can and in parts do react to the legitimacy critique of investment arbitration and how they aim at reestablishing legitimacy.

This chapter opens the “black box” of the Lion City and looks at the extent to which its government has internalised its investment obligations. With its highly efficient bureaucracy, manageable size and strong commitment to the respect of international law, the Singapore experience highlights the challenges that investment treaties can pose, even in the best of rule of law and governance conditions. Although Singapore offers a “most likely” case study for testing the plausibility of claims regarding the effects of investment treaties on the rule of law, aspects of the Singaporean experience cast doubt over the extent to which these measures are well-calibrated to the situations that commonly give rise to investment disputes. Moreover, analysis of the development of these measures casts doubt on the actual role that investment treaties – as opposed to other factors – have played in instituting them.

This chapter examines the impact of investment treaties on the rule of law in Indonesia. The chapter looks at the question over time, focusing first on the evolution of the domestic regulatory regime governing foreign investment and the progression of investment treaties signed by Indonesia. Even though Indonesia has been faced with a number of investment treaty claims, there has been minimal internalisation of investment treaties in Indonesia. Informational internalisation measures have been implemented from time-to-time, but only in an ad hoc manner. Preventative and remedial measures have been virtually non-existent. Thus, investment treaty commitments continue to appear not to be taken into account in governmental decision making in Indonesia. Further, the chapter explores the reasons for this weak internalization.

We conclude on the basis of the case studies contained in this volume that there is little evidence in most of the low- and middle-income countries surveyed that investment treaties and/or investor-state dispute settlement (ISDS) have brought about sustained or systemic internalisation of investment treaty disciplines. Rather, the evidence from the case studies suggests that the conclusion of investment treaties has led generally to little or no internalisation, while ISDS seems at most to have triggered some ad hoc, sporadically implemented “informational” measures of internalisation. Given the limited evidence of internalisation that we find in these case studies, we conclude that there is insufficient evidence to support the central predicate of the rule of law thesis’ spill-over claim. Further, out of the eight case studies contained in this volume, we identify seven factors which appear to have significantly impacted internalisation in these countries.

This chapter looks at the internalisation of investment treaties over time in India. Despite having a massive investment treaty programme, investment treaties have only recently come to occupy an important place in discussions of national governance in India. This chapter examines whether this increased attention to investment treaties has led to increased internalisation. This chapter finds a disconnect between an increase in the political salience of investment treaties and a general lack of internalisation in government decision making. While awareness about investment treaties and investment treaty arbitration in India has increased following its loss of a number of cases brought by foreign investors, India has still not been able to internalise the impact and ramifications of investment treaties. That said, there is evidence of some, limited spill-over effect within government, as a number of specialised government bodies, such as the Law Commission of India and several other expert committees, have identified the importance and need to internalise investment treaties in their various reports.

The chapter assesses the level of internalisation of investment treaty obligations in Sri Lanka as well as their impact on the rule of law. The findings of this paper reveal that though there is some awareness of Sri Lanka’s investment treaty obligations at the level of some of the higher level state organs considered, there are no processes in place to systematically consider those obligations, particularly at the lower levels of government in interactions with investors. The legislative process is a significant exception to this observation due to the unique protection given to investment treaty obligations under Article 157 of the Constitution. Furthermore, despite the awareness of at least the existence of investment treaty obligations at some levels of government, the impact of such obligations on domestic decision- making appears minimal, with political considerations playing a large part in such decisions, sometimes in spite of the state’s investment treaty obligations. Given that there is minimal internalisation of investment treaty obligations, the chapter concludes that there has been minimal spill-over effect of such obligations on the rule of law in general.

This chapter looks at the impact of investment treaties on the rule of law in Thailand. The contention of this chapter is that it is difficult to ascertain clear evidence to support the conclusion that investment treaties have had wider effects on governance in Thailand – whether in terms of positively improving domestic institutions or negatively chilling government decision-making and the exercise of regulatory power. However, the evidence shows some efforts by relevant agencies in the Thai government to internalise the state’s investment treaty obligations. The chapter proceeds in three main parts. First, an overview of investment treaty policy in Thailand and the process for the conclusion of investment treaties are presented. Second, it appraises the internalisation process of investment treaty obligations and potential challenges to internalisation with reference to concrete examples. Third, it analyses the rule of law impact of investment treaties by considering the extent to which investment treaty obligations as well as the first treaty claim have “improved” or “constrained” the conduct of the government.

This paper examines the impact of investment treaties on the rule of law through a detailed case study of Myanmar. The paper draws on a series of semi-structured interviews with government officials, investment lawyers and foreign advisors to the Myanmar government, as well as an analysis of primary and secondary documents. The findings cast doubt on claims that investment treaties promote good governance and the rule of law. The overall finding is that investment treaties’ effects on domestic governance are primarily mediated through processes within the executive branch of government and that these effects are limited and often ad hoc. Investment treaties have no discernible impact on the judicial system in Myanmar, and little impact on legislation or regulatory rule-making processes.

Investment treaties are said to improve the rule of law in host states. Fearing claims, governments will internalise international investment obligations into their decision-making processes, resulting in positive spill-over effects on the rule of law. Such arguments have never been backed by empirical research. We develop a framework for thinking about the internalisation of international treaty obligations in governmental decision making that attempts to take account of the complexities of governance. We lay out a typology of processes whereby international investment treaty obligations may be internalised, and identify factors which may affect whether and to what extent international investment law is internalised in governmental decision making. This framework serves as the background for the main body of the book in which the empirical case studies address whether and how a select group of governments in Asia internalise international investment treaty obligations in their decision-making processes.

Viet Nam has entered into more than 80 investment treaties, including bilateral investment treaties and free trade agreements. In recent years, the country has also faced an increasing number of investor-state disputes, focusing the attention of government action. This paper examines the extent to which Viet Nam has internalised its investment treaty obligations, both before and after its experience with investment treaty claims. The chapter analyses the current investment law and policy landscape of Vietnam, against the backdrop of three decades of government policy addressing foreign investment. The chapter concludes that Vietnam has made significant efforts to internalise the provisions of investment treaties into national governance. It has done so through formal regulation, i.e. mechanisms for legislative screening, and informal coordination and education processes. Still, the paper reveals that the awareness and understanding of investment treaties by local governments remains limited, suggesting the existence of further factors affecting the internalisation process.

This chapter examins the internalisation of investment treaty obligations in Korean governmental decision making. The chapter describes how Korea’s approach to internalisation has evolved over time, beginning with largely informational measures and moving towards the development of monitoring and remedial measures following its experience with invetsment claims. Among others, the chapter addresses the role of the Ombudsman. The chapter identifies two principal factors that have posed challenges to internalisation in Korea.

International investment treaties accord foreign investors and their investments protection from unlawful encroachments by state authorities as well as violence by third parties. From the perspective of investors, this protection becomes especially relevant in times of armed conflict. For states, however, such times make the provision of this protection especially difficult. Arbitral proceedings in the aftermath of the so-called Arab Spring have laid bare unresolved issues and posed new challenges arising from the factual and legal implications of armed conflict. At the same time, international investment law is deeply rooted in issues of war and peace. Not only the first arbitration based on a modern bilateral investment treaty but also the historical precursors of international arbitration have touched upon armed violence and the treatment of aliens. This Introduction presents the themes of the book and provides an initial overview of the relevant legal framework and employed methodology.

International investment treaties accord foreign investors and their investments protection from unlawful encroachments by state authorities as well as violence by third parties. From the perspective of investors, this protection becomes especially relevant in times of armed conflict. For states, however, such times make the provision of this protection especially difficult. Arbitral proceedings in the aftermath of the so-called Arab Spring have laid bare unresolved issues and posed new challenges arising from the factual and legal implications of armed conflict. At the same time, international investment law is deeply rooted in issues of war and peace. Not only the first arbitration based on a modern bilateral investment treaty but also the historical precursors of international arbitration have touched upon armed violence and the treatment of aliens. This Introduction presents the themes of the book and provides an initial overview of the relevant legal framework and employed methodology.