In Chapter 10, we analysed the relationship between human rights and environmental protection, as an expression of the interactions between the social and environmental pillars of sustainable development. This chapter follows a similar approach with respect to the connection between environmental protection and economic development. The latter finds expression in an increasingly important body of norms regulating investment, trade and technology at the international level.
Unlike the link between human rights and the environment, which has been approached mostly from a synergistic perspective, the connection between environmental protection and international economic law has been largely understood as conflicting. Environmental protection measures have been considered as covert protectionism or, alternatively, as a luxury of industrialised countries that no longer have serious development concerns. Conversely, the international protection of foreign investment, trade transactions and intellectual property rights (IPRs) has come under criticism because of the constraints it places on States’ regulatory powers, including for environmental protection.
In reality, environmental protection and international economic law may entertain both synergistic and conflicting relations, depending on the specific issue at stake and the context where it arises. This chapter discusses these two dimensions focusing tour-à-tour on investment, trade and intellectual property regulation. This presentation order is suggested by the production cycle, which begins with investment to develop certain products (12.2), then involves (in addition to domestic sales) the export of the intermediary/final goods to foreign markets (12.3) and, for technologyintensive goods, it seeks to ensure a certain level of protection of IPRs abroad, through the regulation of trade-related aspects of IPRs (12.4). A different presentation order could, of course, be followed, taking into account the fact that a significant proportion of production processes use goods imported from abroad, including from other companies within the same multinational group (intra-firm trade) or that, as drivers of innovation, IPRs intervene at the earlier stage of research and development, which entails investment. These are important issues, and they will be integrated in the presentation order of investment, trade and IPRs regulation followed in this chapter.
Foreign Investment and the Environment in International Law
Foreign investment is much needed for the ‘development’ (economic and social) component of ‘sustainable development’, but it entertains an ambiguous relationship with the other component of this concept, i.e. ‘environmental protection’.