Recent Trends In Investment Arbitration On The Right To Regulate, Environment, Health And Corporate Social Responsibility: Too Much Or Too Little?

Abstract

The article addresses the recent trends in investment arbitration, focusing on the evolution of international investment agreements from the perspective of the right of the States to regulate in public interest, as well as of the provisions concerning environment, health, and corporate social responsibility. These issues have been chosen because they highlight areas where the tension between sovereign and private interests is evident, as well as where States often face resistance in implementing public policy. Furthermore, the discussion is opportune as the mandate entrusted to the UNCITRAL Working Group III concerned with investor-State dispute settlement reform is limited to procedural aspects of such reform, leaving to the discretion of the States, as treaty-makers, the regulation of the substantive issues concerning foreign investments. The analysis of the international investment agreements concluded between January 2018 and December 2020 demonstrates that treaty language is constantly evolving to protect and expand the scope of States' regulatory autonomy. The article concludes that investor-State dispute settlement remains the framework in which environmental, human rights and corporate social responsibility obligations can be smoothly integrated within the international investment law, allowing both States and investors to take advantage of and be held accountable for their respective obligations.

I. INTRODUCTION

The evolution of international investment law in silos has contributed to frequent clashes between investor protections offered in international investment agreements (IIAs), on the one hand, and concerns around sustainable development and human rights, on the other. ⁴ It is understandable that during negotiations of IIAs, States face the dilemma of guaranteeing predictability and security to the foreign investor, while also retaining a degree of policy autonomy for themselves. ⁵

This tussle has played out in numerous investor-State dispute settlement (ISDS) cases where tribunals have held the host State liable for violations of the obligations, despite the State attempting to raise arguments that the measure falls within its regulatory space and exists in pursuance of legitimate public interest concerns. In SAUR International v Argentina, for example, the Tribunal stated:

At the same time, some tribunals such as those in Feldman v Mexico and Methanex v USA paved the way for tribunals to respect the margin of appreciation granted to States in pursuing public policy objectives. ⁷

The respect for States' regulatory space is gaining momentum in the ongoing ISDS reform process. For instance, reform options pertaining to 'Dispute Prevention and Mitigation' currently being discussed at the UNCITRAL Working Group III identify procedural mechanisms through which States can restore their predominant position in ISDS. ⁸ Likewise, as 'masters of treaties', States are attempting to include language in IIAs that safeguards and furthers the policy autonomy that they enjoy in regulating foreign investments in accordance with public policy objectives. ⁹

The purpose of this article is to identify trends in the treaty formulations adopted by States in three areas: the right to regulate, environment and health regulation and corporate social responsibility (CSR). We have chosen these three issues because they highlight areas where the tension between sovereign and private interests is evident, as well as where States often face the most resistance in implementing public policy.

1. The broad 'right to regulate' can be enshrined in IIAs in several forms, some contentious, others not. The regulatory language used in IIAs is the basis for States to retain policy autonomy in their treatment of investors and investments.
2. Environment and health regulation, a subset of the right to regulate, has been the subject of intense scrutiny because it impacts citizens' rights and their quality of life. Global concerns such as climate change and sustainable development bring into focus States' efforts at addressing these concerns in their IIAs.
3. The inclusion of CSR in IIAs is a unique proposition because it expressly imposes obligations on investors in the text of the IIA itself; historically IIAs have been restricted to State obligations.

Our analysis looks at IIAs concluded between January 2018 and December 2020, in comparison with trends identified prior to 2018. The selection of this period is not arbitrary. One may recall that in 2015, UNCITRAL, at its 48th session, noted the debate surrounding investor-State arbitration and the challenges and proposals for reform formulated by several organisations. Based on the Notes prepared by the UNCITRAL Secretariat, ¹⁰ at its 50th session, UNCITRAL decided to entrust Working Group III with a broad mandate to work on the possible reform of ISDS. The Working Group proceeded to: (i) identify and consider concerns regarding ISDS; (ii) consider whether reform was desirable in light of any identified concerns; (iii) if the Working Group were to conclude that reform was desirable, develop any relevant solutions to be recommended to UNCITRAL.

The first phase of the mandate of Working Group III covered the 34th session (27 November-1 December 2017) and the 35th session (23-27 April 2018). The 36th session held in Vienna (29 October-2 November 2018) focused on the second phase of the mandate of Working Group III, with the member States discussing whether reform was desirable in light of any identified concerns. The debate was structured on three main concerns, as identified in the previous sessions: (i) concerns pertaining to consistency, coherence, predictability and correctness of arbitral awards; (ii) concerns pertaining to arbitrators and decision makers; and (iii) concerns pertaining to the cost and duration of ISDS cases (with a focus on arbitration proceedings). The work of UNCITRAL on the third phase of the mandate commenced with the 38th session of Working Group III in October 2019 and is ongoing. ¹¹ As such, it is sensible to assume that the concerns identified for Working Group III-even those raised but not retained for the purpose of the Working Group, as being outside of its mandate-could or should have been commenced to be addressed by States in their newly concluded IIAs as early as 2018.

This analysis also places this review of the 2018-20 IIAs in the broader context of the evolution of the IIAs in the above-identified areas. We have noted that during this period some States have updated their model bilateral investment treaties (BITs). Although not the specific focus of this article, such model BITs have been taken into consideration where relevant and to the extent necessary to highlight an evolution in the IIAs.

On the methodology, we have considered 38 IIAs signed between January 2018 and December 2020, which include provisions concerning investment protection and promotion. ¹² These IIAs include BITs as well as chapters in trade agreements. Twenty-two IIAs were signed in 2018, 11 in 2019 and five in 2020. ¹³ For each aspect described above, we have reviewed the provisions contained in the IIAs to understand the language used to further these interests. We have then made a frequency distribution to analyse how often certain treaty formulations have been relied on. Comparing the language in IIAs across the three years may indicate the evolution of treaty provisions in furthering the right to regulate, environmental and health considerations and CSR. On a broader aspect of this analysis, an overview of these IIAs may indicate States' approach to a more comprehensive international investment law and ISDS reform, outside the UNCITRAL Working Group III forum.

The next three sections of this article analyse the language of the 2018-20 concluded IIAs with respect to the right to regulate, environment and health regulation and CSR. Section V summarises the findings of this analysis, while Section VI considers the IIAs, experiences and the trajectories of some States in the context of the analysed topics. It should be noted here that environment and health regulation cannot be seen in isolation from the broader context of the right to regulate. Thus, this article will first provide a trend analysis on the inclusion of general regulatory powers in IIAs in Section II, before delving into the trend analysis specific to environment and health regulation.

II. THE RIGHT TO REGULATE: UNDERSTANDING THE PREVALENT TREATY FORMULATIONS

The right to regulate forms the basis of any and all regulatory activity that a host State may undertake. This principle is the foundation that permits States to exercise their sovereign powers and impose measures on investments in the interest of public welfare. ¹⁴ The right to regulate is the overarching source that guides the imposition of all regulatory measures, from CSR provisions to regulation of investments through prudential, taxation and anti-corruption measures.

The earlier IIAs, in particular first- and second-generation IIAs, espoused the interests of capital-exporting countries and included safeguards that would ensure the protection of foreign investments. ¹⁵ Gradually, there arose a need for the high investor protection standards to be counterbalanced by sufficient powers to regulate investments, a change which has been reflected in third-generation IIAs. ¹⁶ Third-generation IIAs have also benefited from prior ISDS awards which shed light on the necessity of the host State's ability to be able to regulate foreign investments in a non-discriminatory manner to pursue legitimate objectives. ¹⁷

The analysis in this section focusses on the common provisions across recent BITs that give expression to a State's right to regulate investments across various categories.

A. Pre-2018 Trends

Before looking at recent trends, we wanted to explore existing research for prior periods to see how the right to regulate was addressed. We begin by looking at the Yearbook on International Investment Law and Policy (Columbia Centre on Sustainable Investment, 2015-16, ch 2), which researched the prevalent treaty formulations on the right to regulate. ¹⁸ The research attributed its increased frequency to the necessity to overcome the 'regulatory chill' States faced in apprehension of negative outcomes of investor claims, coupled with the need to preserve their regulatory space to address global challenges such as climate change. 19 During this period, the right to regulate was protected through preambular clauses, non-precluded measures clauses, general provisions and non-lowering of standards clauses. ²⁰

For example, the 2016 Slovakia-Iran BIT utilised this language in the preamble:

Similarly, article 8.9 of the 2016 CETA provides as follows:

1. For the purpose of this Chapter, the Parties reaffirm their right to regulate within their territories to achieve legitimate policy objectives, such as the protection of public health, safety, the environment or public morals, social or consumer protection or the promotion and protection of cultural diversity.
2. For greater certainty, the mere fact that a Party regulates, including through a modification to its laws, in a manner which negatively affects an investment or interferes with an investor's expectations, including its expectations of profits, does not amount to a breach of an obligation under this Section. ²²

This provision expressly asserts the States' right to regulate and also outlines that regulatory activity would not be in breach of obligations. This is important for investors to align their expectations of the investment environment.

B. A Wide Array of Forms that Regulatory Takings May Take: Looking at Developments in 2018-2020

Regulatory language in IIAs in the relevant period (January 2018-December 2020), saw clauses that took on the following shape and form:

• Preamble-States might sometimes include reference to the right to regulate in the preambulatory clause. By reserving policy space within the preamble itself, the furthering of the right to regulate becomes an overarching theme in the interpretation of the IIA itself. For instance, an example of regulatory language can be seen in the 2019 Australia-Hong Kong IPA: RECOGNISING their right to regulate and resolving to preserve their flexibility to set legislative and regulatory priorities, safeguard public welfare and protect legitimate public welfare objectives. ²³

• General provisions-Some IIAs include a broad reference to States' regulatory powers within a 'general provisions' clause. The purpose of such a clause is to clarify that the mere exercise of a State's regulatory powers does not amount to a breach of investor rights, provided it was done to achieve legitimate public policy objectives. The 2018 EU-Singapore Investment Protection Agreement (IPA) uses the following language: 1. The Parties reaffirm their right to regulate within their territories to achieve legitimate policy objectives, such as the protection of public health, social services, public education, safety, environment or public morals, social or consumer protection privacy and data protection and the promotion and protection of cultural diversity. ²⁴

• National treatment (NT)-While recognising obligations such as NT, certain IIAs also qualify an obligation by allowing States to exercise their right to regulate, provided the substance of investor rights is not diluted. The inclusion of such a clause is an attempt at balancing State obligations and investor rights. The 2020 Japan-Morocco BIT includes the following clause in its NT provision: Paragraph 1 shall not be construed to prevent a Contracting Party from adopting or maintaining a measure that prescribes special formalities in connection with investment activities of investors of the other Contracting Party in its Territory, provided that such special formalities do not impair the substance of the rights of such investors under this Agreement. ²⁵

• Transfers-This is one of the most common regulatory provisions seen in IIAs that we looked at . Transfers relating to any investment within a State's territory would be generally permitted. Such transfers would be restricted only in the exercise of regulatory powers and the domestic rule of law. The 2018 Canada-Moldova BIT qualifies the transfers provision with this clause: Notwithstanding paragraphs 1 and 2, a Party may prevent a transfer through the equitable, non-discriminatory and good faith application of its domestic law relating to: (a) bankruptcy, insolvency, or the protection of the rights of a creditor; (b) issuing, trading, or dealing in securities; (c) a criminal or penal offence; (d) financial reporting or record keeping of transfers when necessary to assist law enforcement or financial regulatory authorities; or (e) ensuring compliance with an order or judgment in judicial or administrative proceedings. ²⁶

• Taxation measures-The purpose of this clause is to harmoniously construe States' obligations under IIAs with those under other tax agreements. To that end, this clause reserves powers of States to regulate issues of tax. The 2019 EU-Vietnam IPA includes the following language:

Nothing in this Agreement shall be construed as preventing the adoption or enforcement of any measure aimed at preventing the avoidance or evasion of taxes pursuant to the tax provisions of agreements to avoid double taxation or other tax arrangements or domestic fiscal legislation. ²⁷

• Prudential measures-Similar to the previous clause, this provision too safeguards the right to regulate in the interest of a State's economic health. For example, the 2019 EU-Vietnam IPA includes a useful provision:
  1. Nothing in this Agreement shall be construed as preventing a Party from adopting or maintaining measures for prudential reasons, such as:
  2. the protection of investors, depositors, policy-holders or persons to whom a fiduciary duty is owed by a financial service supplier; or
  3. ensuring the integrity and stability of a Party's financial system.
  4. The measures referred to in paragraph 1 shall not be more burdensome than necessary to achieve their aim. ²⁸

• Anti-corruption-This clause usually takes the form of enjoining States to impose measures tackling corruption, even if such corruption originates from foreign investments. The 2018 Brazil-Guyana Cooperation and Facilitation Investment Agreement (CFIA) uses the following language:
  1. Each Party shall maintain measures to prevent and fight corruption, money laundering and terrorism financing with regard to matters covered by this Agreement, in accordance with its laws and regulations.
  2. Nothing in this Agreement shall require any Party to protect investments made with capital or assets of illicit origin or investments in the establishment or operation of which illegal acts have been demonstrated to occur and for which national legislation provides asset forfeiture. ²⁹

• Performance requirements-This provision is most commonly seen in regional trade agreements (RTAs) and free trade agreements (FTAs), and ensures that States may impose performance requirements in very limited circumstances, generally pertaining to the TRIPS Agreement, or when imposed by the State's judicial system. For instance, the USMCA uses the following provision: Paragraphs 1(f), 1(h), 1(i), and 2(e) do not apply:
  1. if a Party authorizes use of an intellectual property right in accordance with Article 3115 of the TRIPS Agreement, or to a measure requiring the disclosure of proprietary information that falls within the scope of, and is consistent with, Article 39 of the TRIPS Agreement, or
  2. if the requirement is imposed or the commitment or undertaking is enforced by a court, administrative tribunal, or competition authority, after judicial or administrative process, to remedy an alleged violation of competition laws. ³⁰

• Consistency with IIA obligations-This clause recognises States' powers to regulate investments by imposing measures consistent with obligations in the IIA. Generally, this clause enables States to regulate to achieve environmental and health objectives. For example, the 2018 CPTPP includes the following clause: Nothing in this Chapter shall be construed to prevent a Party from adopting, maintaining or enforcing any measure otherwise consistent with this Chapter that it considers appropriate to ensure that investment activity in its territory is undertaken in a manner sensitive to environmental, health or other regulatory objectives. ³¹

• Non-precluded measures-These clauses recognise exceptional situations in which it would be permitted for States to impose measures that may impair investor rights. This is one of the most common forms of regulatory language seen in IIAs of 2018-20. The 2018 Argentina-UAE BIT, for example, states: Nothing in this Agreement shall prevent the implementation by either Party of measures it deems necessary in order to:
  1. maintain public order;
  2. protect its own national interests, including its essential security interests;
  3. fulfil its obligations with respect to the maintenance or restoration of international peace and security;
  4. protect human, animal and plant life or health;
  5. protect and preserve the environment, including living and non-living natural resources;
  6. protect national treasures or monuments having artistic, cultural, historical and archaeological value. ³²

• Exemptions-Usually in the context of indirect expropriation, this treaty formulation exempts States from liability for breach of obligations when regulating to achieve environment and health objectives. For example, the 2018 Belarus-Turkey BIT includes the following text: Non-discriminatory legal measures designed and applied to protect legitimate public welfare objectives, such as health, safety and environment, do not constitute indirect expropriation. ³³

The last three treaty formulations, ie, consistency with IIA obligations, non-precluded measures and exemptions, are also discussed in the substantive analysis on environment and health regulation as their language is specific to these concerns.

4. Silvia Steininger, 'What's Human Rights Got to Do with It? An Empirical Analysis of Human Rights References in Investment Arbitration' (2018) 31 LJIL 34 ('Human rights scholars and civil society, on the other hand, argue that foreign investors and governments do not prioritize the obligation to respect and protect fundamental human rights, thereby systematically undermining human rights standards').

5. Karsten Nowrot, 'How to Include Environmental Protection, Human Rights and Sustainability in International Investment Law' (2014) 15 JWIT 622 ('It hardly needs to be emphasized that stipulating restrictions on the 'policy space' of host states on the basis of international legal obligations and thus providing conditions of legal certainty for foreign investors are among the central—and in principle indispensable—purposes of IIAs. However, it also has to be recalled in this connection, that the regulatory autonomy enjoyed by host states is very far from being merely an end in itself. Rather, it is first and foremost a means to pursue—and indeed even finds its justification and legitimation exclusively in the pursuit of—the promotion and protection of public interest concerns, among them human rights, development needs, environmental issues as well as social and labor standards').

6. SAUR International SA v Republic of Argentina, ICSID Case No ARB/04/4, Decision on Jurisdiction and Liability (6 June 2012) para 331.

7. Marvin Roy Feldman Karpa v United Mexican States, ICSID Case No ARB(AF)/99/1, Award (16 December 2002) para 103 ('The Tribunal notes that the ways in which governmental authorities may force a company out of business, or significantly reduce the economic benefits of its business, are many. In the past, confiscatory taxation, denial of access to infrastructure or necessary raw materials, imposition of unreasonable regulatory regimes, among others, have been considered to be expropriatory actions. At the same time, governments must be free to act in the broader public interest through protection of the environment, new or modified tax regimes, the granting or withdrawal of government subsidies, reductions or increases in tariff levels, imposition of zoning restrictions and the like. Reasonable governmental regulation of this type cannot be achieved if any business that is adversely affected may seek compensation, and it is safe to say that customary international law recognizes this'); Methanex Corporation v United States of America, UNCITRAL, Final Award of the Tribunal on Jurisdiction and Merits (3 August 2005) pt IV, ch D, paras 9, 15 ('Methanex entered a political economy in which it was widely known, if not notorious, that governmental environmental and health protection institutions at the federal and state level, operating under the vigilant eyes of the media, interested corporations, non-governmental organizations and a politically active electorate, continuously monitored the use and impact of chemical compounds and commonly prohibited or restricted the use of some of those compounds for environmental and/or health reasons [...] For reasons elaborated here and earlier in this Award, the Tribunal concludes that the California ban was made for a public purpose, was non-discriminatory and was accomplished with due process').

8. UNCITRAL, 'Working Group III: Investor-State Dispute Settlement Reform' https://uncitral.un.org/en/working_groups/3/investor-state accessed 3 March 2023.

9. Mary E Footer, 'BITs and Pieces: Social and Environmental Protection in the Regulation of Foreign Investment' (2009) 18 MichSJIL 33, 37–42 ('Many existing BITs are of the first generation, concluding somewhere between 1959 and the early 1990s. By and large they reflect the demands of the major capital-exporting states in the developed, industrialized world, which were previously situated in the Northern hemisphere. An almost exclusive emphasis on the protection of the foreign investment was served by the conclusion of BITs that provided for the substantive protection and promotion of investment [...] It is becoming increasingly common for states to expand on their legitimate right to regulate for social or environmental purposes by imposing restrictions in one of two ways. One is for governments to provide exceptions to the general prohibition on the imposition of performance requirements in many IIAs [...] The other means of restriction, which is common to some third generation BITs, is a so-called "non-lowering of standards" clause').

10. See UNCITRAL, 'Possible Future Work in the Field of Dispute Settlement: Concurrent Proceedings in International Arbitration' (3–21 July 2017) UN Doc A/CN.9/915; UNCITRAL, 'Possible Future Work in the Field of Dispute Settlement: Ethics in International Arbitration' (3–21 July 2017) UN Doc A/CN.9/916; UNCITRAL, 'Possible Future Work in the Field of Dispute Settlement: Reforms of Investor-State Dispute Settlement (ISDS)' (3–21 July 2017) UN Doc A/CN.9/917. See also the Compilation of Comments by States and international organisations on UNCITRAL 'Investor-State Dispute Settlement Framework' (3–21 July 2017) UN Doc A/CN.9/918 and addenda.

11. See UNCITRAL, 'Report of Working Group III (Investor-State Dispute Settlement Reform) on the Work of Its Thirty-Eighth Session' (Vienna, 14–18 October 2019) UN Doc A/CN.9/1004.

12. Agreement between the Argentine Republic and Japan for the Promotion and Protection of Investment (signed 1 December 2018, not yet entered into force); Agreement for the Reciprocal Promotion and Protection of Investments between the Argentine Republic and the United Arab Emirates (signed 16 April 2018, not yet entered into force); Agreement between the Government of the Republic of Korea and the Government of the Republic of Armenia for the Promotion and Reciprocal Protection of Investments (signed 19 October 2018, entered into force 3 October 2019); Peru–Australia Free Trade Agreement (signed 12 February 2018, entered into force 11 February 2020) ch 8; Treaty between the Republic of Belarus and the Republic of India on Investments (signed 24 September 2018, not yet in force); Agreement between the Government of the Republic of Belarus and the Government of the Republic of Turkey Concerning the Reciprocal Promotion and Protection of Investments (signed 14 February 2018, not yet in force); Agreement between the Federative Republic of Brazil and the Federal Democratic Republic of Ethiopia on Investment Cooperation and Facilitation (signed 11 April 2018, not yet entered into force); Cooperation and Investment Facilitation Agreement between the Federative Republic of Brazil and the Co-operative Republic of Guyana (signed 13 December 2018, not yet entered into force); Cooperation and Investment Facilitation Agreement between the Federative Republic of Brazil and the Republic of Suriname (signed 2 May 2018, not yet entered into force); Agreement between the Government of the Republic of Turkey and the Government of the Kingdom of Cambodia on the Reciprocal Promotion and Protection of Investments (signed 21 October 2018, not yet entered into force); Agreement between the Government of Canada and the Government of the Republic of Moldova for the Promotion and Protection of Investments (signed 12 June 2018, entered into force 23 August 2019); Comprehensive and Progressive Agreement for Trans-Pacific Partnership (signed 8 March 2018, entered into force 30 December 2018), ch 9; Investment Protection Agreement between the European Union and Its Member States, of the One Part, and the Republic of Singapore, of the Other Part (signed 15 October 2018, not yet entered into force); Comprehensive Economic Partnership Agreement between the Republic of Indonesia and the EFTA States (signed 16 December 2018, entered into force 1 November 2021); Agreement between Japan and the Republic of Armenia for the Liberalisation, Promotion and Protection of Investment (signed 14 February 2018, entered into force 15 May 2019); Agreement between Japan and the Hashemite Kingdom of Jordan for the Promotion and Protection of Investment (signed 27 November 2018, entered into force 1 August 2020); Agreement between Japan and the United Arab Emirates for the Promotion and Protection of Investment (signed 30 April 2018, entered into force 26 August 2020); Agreement between the Government of the Republic of Kazakhstan and the Government of the Republic of Singapore on the Promotion and Mutual Protection of Investments (signed 21 November 2018, not yet entered into force); Agreement between the Government of the Republic of Kazakhstan and the Government of the United Arab Emirates on Promotion and Reciprocal Protection of Investments (signed 24 March 2018, not yet entered into force); Republic of Korea and Central America Free Trade Agreement (signed 21 February 2018, entered into force 1 March 2021) ch 9; Singapore–Sri Lanka Free Trade Agreement (signed 23 January 2018, entered into force 1 May 2018) ch 10; United States–Mexico–Canada Agreement (signed 30 November 2018, entered into force 1 July 2020), ch 10; Armenia-Singapore Agreement on Trade in Services and Investment (signed 1 October 2019, not yet entered into force) ch 13; Investment Agreement between the Government of Australia and the Government of the Hong Kong Special Administrative Region of the People's Republic of China (signed 26 March 2019, entered into force 17 January 2020); Agreement between Australia and the Oriental Republic of Uruguay on the Promotion and Protection of Investments (signed 5 April 2019, entered into force 23 January 2022); Agreement between the Government of the Republic of Belarus and the Government of Hungary for the Promotion and Reciprocal Protection of Investments (signed 14 January 2019, entered into force 28 September 2019); Cooperation and Facilitation Investment Agreement between the Federative Republic of Brazil and the United Arab Emirates (signed 15 March 2019, not yet entered into force); Agreement between the Government of Hungary and the Government of the Republic of Cabo Verde for the Promotion and Reciprocal Protection of Investments (signed 28 March2019, entered into force 2 May 2020); Investment Protection Agreement between the European Union and Its Member States, of the One Part, and the Socialist Republic of Vietnam, of the Other Part (signed 30 June 2019, not yet entered into force); Agreement between the Government of the Hong Kong Special Administrative Region of the People's Republic of China and the Government of the United Arab Emirates for the Promotion and Reciprocal Protection of Investments (signed 16 June 2019, entered into force 6 March 2020); Bilateral Investment Treaty between the Government of the Kyrgyz Republic and the Government of the Republic of India (signed 14 June 2019, not yet entered into force); Agreement between the Government of the Republic of Singapore and the Government of the Republic of the Union of Myanmar on the Promotion and Protection of Investments (signed 24 September 2019, not yet entered into force); Agreement between the Government of the Republic of Uzbekistan and the Government of the Republic of Korea for the Reciprocal Promotion and Protection of Investment (signed 19 April 2019, not yet entered into force); Indonesia-Australia Comprehensive Economic Partnership Agreement (signed 4 March 2020, entered into force 5 July 2020) ch 14; Investment Cooperation and Facilitation Treaty between the Federative Republic of Brazil and the Republic of India (signed 25 January 2020); Agreement between the Kingdom of Morocco and Japan for the Promotion and Protection of Investment (signed 8 January 2020, entered into force 23 April 2022); Regional Comprehensive and Economic Trade Agreement (signed 15 November 2020, entered into force 1 January 2022) ch 10; Trade and Cooperation Agreement between the European Union and the European Atomic Energy Community, of the One Part, and the United Kingdom of Great Britain and Northern Ireland, of the Other Part (signed 30 December 2020, entered into force 1 May 2021).

13. The data is taken from the UNCTAD website https://investmentpolicy.unctad.org/international-investment-agreements accessed 3 March 2023.

14. Dr Crina Baltag, 'Investment Arbitration and Police Powers: Emerging Issues' (2020) EILA Rev ('The doctrine of police powers has established itself as a State defence which provides that an act of the State, amounting to non-discriminatory taking of property, without compensation, and for public interest, could be lawful under public international law. The doctrine of police powers represents an attempt by investment tribunals to reconcile the sovereign right of the State, as the guardian of the general public interest, to regulate economic activities on its territory with its treaty or contractual obligations').

15. See Footer (n 8); Nowrot (n 4) at 620 ('The previous transition period from what might be labeled "first generation" BITs concluded since the end of the 1950s to the "second generation" investment agreements entered into mostly in the previous two decades was overall characterized by an enhancement of the legal protection of foreign investors and their activities based on a broad political consensus recognizing this protective aims as the sole—or at least primary—purpose pursued by respective agreements. This treaty practice, aimed at establishing and fostering an "'international investment protection law" in the true sense of the meaning, saw the introduction of improved levels of substantive guarantees for investors as well as—and particularly noteworthy—also the stipulation of investor-state dispute settlement provisions that were far from common in older BITS').

16. Nowrot (n 4) 624 ('the currently visible transition phase from the "second generation" of investment agreements to the rise of a new "third generation" of investment policies that increasingly also finds its manifestation in treaty practice is overall characterized by various efforts of states to regain some of their policy space vis-à-vis foreign investors; intended to establish a new balance between host states and investors by stipulating additional limits to the international legal benefits enjoyed by the later').

17. See eg Biwater Gauff v Tanzania, ICSID Case No ARB/05/22, Award (24 July 2008) para 434 ('Further, in deciding how best to address the crisis, including how to carry out the repossession of the leased assets at DAWASA's request, the Republic was entitled to a measure of appreciation. Water and sanitation services are vitally important, and the Republic has more than a right to protect such services in case of a crisis: it has a moral and perhaps even a legal obligation to do so').

18. Jesse Coleman, Lise Johnson and others, 'International Investment Agreements, 2015–16: A Review of Trends and New Approaches' (2015–2016) YB Intl Investment L & Pol 42

19. ibid 72 ('In recent years, references to the "right to regulate" have appeared more frequently in the policy positions and public statements of negotiating states, in the texts of IIAs and new models, and more generally in the debate on reform of the international investment regime').

20. ibid 74 ('This development goes beyond inclusion of provisions that indirectly concern the right to regulate. As discussed below, several agreements include more explicit references to the right to regulate in addition to, or aside from, the inclusion of general exception clauses, non-lowering of standards provisions, or clarifications of specific treaty standards that strongly impact regulatory space').

21. Agreement between the Slovak Republic and the Islamic Republic of Iran for the Promotion and Reciprocal Protection of Investments (signed 19 January 2016, entered into force 30 August 2017) preamble.

22. Comprehensive Economic and Trade Agreement between Canada and the European Union (signed 30 October 2016, provisionally entered into force 21 September 2017) (CETA).

23. Investment Agreement between the Government of Australia and the Government of the Hong Kong Special Administrative Region of the People's Republic of China (signed 26 March 2019, entered into force 17 January 2020) Preamble.

24. Investment Protection Agreement between the European Union and Its Member States, of the One Part, and the Republic of Singapore, of the Other Part (signed 15 October 2018, not yet entered into force) art 2.2.

25. Agreement between the Kingdom of Morocco and Japan for the Promotion and Protection of Investment (signed 8 January 2020, entered into force 23 April 2022) art 3.4.

26. Agreement between the Government of Canada and the Government of the Republic of Moldova for the Promotion and Protection of Investments (signed 12 June 2018, entered into force 23 August 2019) art 11.

27. Investment Protection Agreement between the European Union and Its Member States, of the One Part, and the Socialist Republic of Vietnam of the Other Part (signed 30 June 2019, not yet entered into force) art 4.4.

28. ibid art 4.5.

29. Cooperation and Investment Facilitation Agreement between the Federative Republic of Brazil and the Cooperative Republic of Guyana (signed 13 December 2018, not yet entered into force) art 16.

30. Cooperation and Investment Facilitation Agreement between the Federative Republic of Brazil and the Cooperative Republic of Guyana (signed 13 December 2018, not yet entered into force) art 16.

31. Comprehensive and Progressive Agreement for Trans-Pacific Partnership (signed 8 March 2018, entered into force 30 December 2018) ch 9, art 9.16.

32. Agreement for the Reciprocal Promotion and Protection of Investments between the Argentine Republic and the United Arab Emirates (signed 16 April 2018, not yet entered into force) art 18.

33. Agreement between the Government of the Republic of Belarus and the Government of the Republic of Turkey Concerning the Reciprocal Promotion and Protection of Investment (signed 14 February 2018, not yet entered into force) art 6(2).