Potent Threat? Investment Arbitration and Just Transition in the Global South

Organized by Taskforce on Climate Governance

Reconciling the imperatives of meeting global climate goals while ensuring justice and sustainable development is one of the most significant global challenges. As the ongoing reforms of international investment treaties and investment arbitration aimed at aligning the global economic system with the authority of states to regulate in furtherance of, among others, environmental protection and climate goals have revealed, addressing concerns of justice is key to the success of the initiatives, especially in the global South. While much scholarly and policy attention has focused on the trade and international finance regimes, the international investment regime as it relates to the global south has largely been overlooked. This oversight could be costly as emerging scholarship is revealing how the substantial costs of arbitral claims could undermine development, and even threaten the very existence of states, especially those with limited fiscal and budgetary resources. Yet it is such countries that are usually the most vulnerable to investment treaty arbitral claims. It is against this backdrop that this innovative panel will explore the implications of investment treaty arbitration on the just transition in the global South. It will critically examine the implications of net zero targets, which almost all states have signed, on the prospects and implications of investment arbitration. The panel will analyse how policies and legislation aimed at achieving net zero targets might become subjects of treaty claims by foreign investors under the investor-state dispute settlement regime. In breaking new ground, this roundtable will also focus on the concept of the right to development as a way to (re)think about the nexus of investment arbitration and just transition. Speakers will examine conceptual, legal, theoretical, and empirical and policy aspects.