In This Article Expand or collapse the "in this article" section Public Interest, Human Rights, and Foreign Investment

  • Introduction
  • General Overviews
  • Historical Links between Human Rights and Foreign Investment
  • Fragmentation of Human Rights and International Investment Law
  • International Investment Agreements and Human Rights
  • Investment Arbitration and Human Rights
  • Violations of a Foreign Investor’s Human Rights
  • Democracy and International Investment Law

International Law Public Interest, Human Rights, and Foreign Investment
Edward Guntrip
  • LAST REVIEWED: 23 August 2022
  • LAST MODIFIED: 23 August 2022
  • DOI: 10.1093/obo/9780199796953-0160


Foreign direct investment (FDI) involves a private investor from one state (the home state) investing in another state (the host state). The time frame for the investment is usually medium to long-term. The investment is often governed by a contract, and protections are offered to the investor in an international investment agreement. The international investment agreement frequently contains provisions requiring disputes to be settled by way of investment arbitration. The medium to long-term presence of a foreign-owned private party in a state, that has been granted investment protection standards, has given rise to concerns regarding whether the host state’s ability to act in the public interest is compromised. Often, foreign direct investment results in public services being operated by private companies. Should these public services fail, the host state can intervene, but it risks breaching the terms of the international investment agreement. If the host state does not intervene, its population can suffer. Foreign investors may also undertake private activities that have negative consequences for local populations. For example, mining projects may have long-term environmental impacts. Investment protection standards may preclude the host state from introducing new forms of regulation to protect the public interest in a variety of fields. Human rights have been raised as a particular concern, given widely publicized human rights violations resulting from the actions of some foreign investors. Human rights such as indigenous rights, the prohibition on racial discrimination, the right to health, and the emerging “right to water” have all been raised in investment arbitrations. Conversely, host states can also act in a manner that violates the human rights of the foreign investor; for example, by arbitrarily detaining those associated with the investment project. Given the potential for the public interest to be detrimentally affected by FDI, it has been suggested that human rights and public interest claims be introduced into investment arbitration. However, given investment arbitration’s jurisdictional limits, there remains considerable debate regarding how this can be achieved. Further, investment arbitration has traditionally been confidential, preventing public access to hearings and public scrutiny of investment awards. In response, measures have been taken to improve public awareness of investment disputes and to permit interested groups to make submissions to arbitral tribunals. Nonetheless, investment awards may undermine host state regulatory power exercised in accordance with democratic processes. Consequently, research in the field of public interest, human rights, and foreign direct investment is increasing at a rapid rate.

General Overviews

Given the breadth of the topic, no single resource provides a comprehensive overview of all of the issues related to how the public interest, human rights, and foreign investment interact. However, both Schill and Djanic 2018 and Arcuri and Montanaro 2018 provide clear outlines of the competing approaches to understanding the intersection of international investment law and the public interest. Kim 2016 provides a general overview of the relationship between international investment law and human rights. For more detailed consideration of key aspects of this intersection, there are several edited collections. Dupuy, et al. 2009 provides an excellent starting point, as does Kriebaum 2013. For more focused attention on specific interrelationships, Treves, et al. 2014 and Chaisse, et al. 2021 offer in-depth coverage. Titi 2014 and Mouyal 2016 present extensive studies on how international investment law potentially affects a host state’s right to regulate. Levashova 2019 and Luque Macías 2021 contextualize the right to regulate in relation to the fair and equitable treatment standard and Latin America, respectively. Kulick 2012 proposes a theoretical perspective on how these elements interconnect. Van Harten 2007 explains how investment arbitration operates in a similar manner to domestic public law.

  • Arcuri, Alessandra, and Francesco Montanaro. “Justice for All? Protecting the Public Interest in Investment Treaties.” Boston College Law Review 59.8 (2018): 2791–2824.

    This article proceeds on the basis that international investment law and investment arbitration are flawed and cannot protect the public interest. As such, it seeks to place those negatively affected by investments on the same standing as foreign investors by challenging investment arbitration’s private law foundations. The article presents three alternative models that would enable the public interest to be taken into account in international investment law. Each proposal requires a radical overhaul of the existing legal structures.

  • Chaisse, Julien, Leïla Choukroune, and Sufian Jusoh, eds. Handbook of International Investment Law and Policy. Singapore: Springer, 2021.

    This handbook provides an overview of all areas of international investment law and policy. The handbook includes a section dedicated to “Human Rights, Sustainable Development, and International Investment Law,” with chapters addressing how international investment law intersects with topics such as human rights, the environment, counterclaims, public health, cultural heritage, and sustainable development. See Human Rights and Public Interest Claims in Foreign Investment Disputes. See also Host State Counterclaims.

  • Dupuy, Pierre-Marie, Francesco Francioni, and Ernst-Ulrich Petersmann, eds. Human Rights in International Investment Law and Arbitration. International Economic Law. Oxford: Oxford University Press, 2009.

    This edited collection examines the interaction of international investment law and international human rights law from several perspectives. The framework of the book relates to the constitution and structures of investment arbitration and human rights adjudicative bodies, but also refers to case studies of specific interactions between international investment law and international human rights law. The collection argues that there is a need for a constitutional theory in economic adjudication.

  • Kim, Heejin. Regime Accommodation in International Law: Human Rights in International Economic Law and Policy. Leiden, The Netherlands, and Boston: Brill Nijhoff, 2016.

    DOI: 10.1163/9789004325517

    Kim analyzes the interaction of international human rights law and international economic law (which encompasses international trade law and international investment law). Kim argues that international law has the means to resolve the conflicts that arise between these fields of international law and examines how decision makers can better integrate international human rights law into investment arbitration.

  • Kriebaum, Ursula, ed. Special Issue: Aligning Human Rights and Investment Protection. Transnational Dispute Management 2013.1 (2013).

    This special edition addresses human rights within international investment law from a wide variety of perspectives, including treaty conflicts, balancing obligations, the role of dialogues between institutions, and amicus curiae submissions. This is a subscription only service available online. See also Procedures to Introduce Human Rights and Public Interest Claims into Foreign Investment Disputes.

  • Kulick, Andreas. Global Public Interest in International Investment Law. Cambridge Studies in International and Comparative Law. Cambridge, UK: Cambridge University Press, 2012.

    DOI: 10.1017/CBO9781139128971

    Kulick addresses the potential for international investment law to delimit public interests. By reference to the structure and operation of international investment law, the author proposes the Global Public Interest theory, which permits host states to protect public interests based on general principles of law and customary international law. Kulick suggests proportionality as a means of reconciling the competing objectives of each regime. See Proportionality Analysis and Balancing.

  • Levashova, Julia. The Right of States to Regulate in International Investment Law: The Search for Balance between Public Interest and Fair and Equitable Treatment. Alphen aan den Rijn, The Netherlands: Wolters Kluwer, 2019.

    This book relies on the host state’s right to regulate as a reflection of the public interest. The book focuses on both international investment agreements and arbitral practice to determine whether an appropriate balance has been struck between the right to regulate and the fair and equitable treatment standard. Levashova also provides suggestions as to how international investment agreements can be drafted to provide a better balance between the right to regulate and the fair and equitable treatment standard.

  • Luque Macías, María José. Re-politicizing International Investment Law in Latin America through the Duty to Regulate Paradigm. Cham, Switzerland: Springer, 2021.

    DOI: 10.1007/978-3-030-73272-1

    This monograph argues that the right to regulate is insufficient to accommodate international human rights law within international investment law. Luque Macías posits that international investment law in Latin America needs to be re-politicized by using international human rights law to create an international duty to regulate. The monograph proposes reforms to investment treaties and provides suggestions as to how investment tribunals can be induced to engage with human rights claims.

  • Mouyal, Lone Wandahl. International Investment Law and the Right to Regulate: A Human Rights Perspective. Routledge Research in International Economic Law. Abingdon, UK, and New York: Routledge, 2016.

    DOI: 10.4324/9781315684055

    Mouyal considers international investment law and international human rights law from the perspective of the host state’s right to regulate. She examines international investment agreements and International Centre for Settlement of Investment Disputes (ICSID) arbitration to identify what regulatory measures may not amount to a compensable expropriation. She further addresses what methods could be employed by negotiators of international investment agreements, and investment tribunals, to permit host states to regulate, while maintaining legal certainty for foreign investors.

  • Schill, Stephan, and Vladislav Djanic. “Wherefore Art Thou? Towards a Public Interest–Based Justification of International Investment Law.” ICSID Review 33.1 (2018): 29–55.

    DOI: 10.1093/icsidreview/six025

    This article challenges the view that international investment law and investment arbitration threaten the public interest. The article initially shows how global economic growth can support global public interests. It then proceeds to examine the mechanisms that exist to enable economic and noneconomic interests to be promoted simultaneously. The authors acknowledge that some of these mechanisms are not perfect but take the viewpoint that the necessary tools exist to reconcile international investment law and investment arbitration with the public interest.

  • Titi, Aikaterini. The Right to Regulate in International Investment Law. Studies in International Investment Law/Studien zum Internationalen Investitionsrecht 10. Baden-Baden, Germany: Nomos, 2014.

    DOI: 10.5771/9783845251783

    Titi provides a comprehensive overview of the right to regulate in international investment law. She determines the limits of the right in relation to investment arbitration, investment protection standards, and defenses. She also considers the right to regulate as an express term in international investment agreements. While focusing generally on the right to regulate, this text also highlights how international investment law addresses the public interest.

  • Treves, Tullio, Francesco Seatzu, and Seline Trevisanut, eds. Foreign Investment, International Law and Common Concerns. Routledge Research in International Economic Law. Abingdon, UK: Routledge, 2014.

    This edited collection considers the role of common concerns, such as human rights, environmental law, and labor standards, within the international investment law regime. It examines these intersections from the perspectives of general international law and institutional concerns. It then addresses more specific issues relating to the common concerns identified and analyzes how particular sectors affect these common concerns.

  • van Harten, Gus. Investment Treaty Arbitration and Public Law. Oxford Monographs in Private International Law. Oxford: Oxford University Press, 2007.

    This monograph conceptualizes investment treaty arbitration as a form of public law. It is critical of the power conferred upon investment arbitrators and their ability to make regulatory decisions without further review. In light of the public function performed by arbitrators, and the enforceability of their awards in most states, the book suggests that an international investment court should be established, composed of tenured judges.

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