Non-state actors and the fight for a sustainable future in a ‘neo-colonial’ investment system? Photo: Kelly Lacy

Non-state actors and the fight for a sustainable future in a ‘neo-colonial’ investment system?

There is a need for a wholesale change to tackle the inherent imbalance, which harmfully impacts the environment and human rights.


With disproportionate protection of investors in International Investment Agreements (IIAs) at the ‘cost’ of host states, particularly in relation to the human rights of the population and their environment, international investment law has been criticised as a new form of colonialism. While the system of foreign direct investment can seem very attractive to developing countries in order to strengthen the growth of their economies, these expectations are often not fulfilled. Indeed, it is regularly the environment and human rights in the host states that suffer most, an impact that clearly runs contrary to the notion of sustainable development.

‘Neo’ Colonialism and Sustainable Development

Early foreign investment protection was rooted in the idea of western superiority and the premise that the local law was “inferior”. Although colonialist features are not as explicit in contemporary international investment law, new narratives like development continue the inherent imbalance in the international investment regime.

It has been argued that this imbalance could be demonstrated in IIAs in three ways: 1) IIAs usually place emphasis on investors’ rights as opposed to those of host states; 2) the rights and obligations of investors are not balanced in IIAs; 3) IIAs focus more on the protection of investment instead of the protection of public interests. Despite all the benefits international investment could bring to countries’ development, concerns have been raised as to whether the inherent imbalance could jeopardise the idea of sustainable development.

To be more specific, the inherent imbalance could be observed in environmental and human rights issues caused by international investment, which are germane to sustainable development. Neglecting to protect the environment and human rights in international investment instruments and the failure to protect them in practice echoes the modus operandi of “traditional” colonialism in plundering natural resources and in the exploitation of labour to satisfy the needs of “metropole citizens”.

It is undeniable that there have been some positive developments concerning the environment and human rights issues in international investment law in recent years. However, we contend that these developments have not been enough, merely adding window-dressing to an inherently imbalanced international investment law system. Given the scale of imbalance in international investment law, wholesale change is needed. Without such drastic reform, the inherent imbalance could continue to have a harmful impact on environmental or human rights, as well as perpetuating the path of unsustainable development and new forms of colonialism.

Enhancing Non-State Actor Participation

There are different ways in which international investment law may be reformed in order to better serve development while protecting public interests, the environment, and human rights. One possibility would be to enhance the participation of non-state stakeholders. They could be involved in different stages, including the negotiation of treaties as well as in dispute settlement processes. This engagement could help tackle the above-described inherent imbalance.

Negotiation process

In recent history, there has been a growing amenability towards non-state actors in the treaty-making process in international law in order to ‘democratise’ the process. The WTO, for example, organised public hearings and accepted testimonies in the making of the Framework Convention on Tobacco Control. This trend should be followed in international investment law. However, in the underlying bargain of IIA-making (investors support host states’ economic development in return for investment protection guarantees in IIAs) public interests and the rights of e.g. indigenous people are not sufficiently considered. Several UN bodies, including the OHCHR, UNHRC and Special Rapporteurs, have called upon states to consider their human rights obligations (especially those under the ICESCR) and conduct human rights assessments when negotiating investment treaties. States should provide adequate participation opportunities for non-state stakeholders during the negotiation and drafting process and prior to the ratification of agreements.

In this regard, the Treaty of the EU (TEU) can be seen as a rather progressive treaty, establishing a right to directly participate with regards to investment decisions. This ensures that public interests are being considered during/before the negotiations of new agreements. Participatory rights could also be included in other regional treaties or instruments, such as the ECOWAS Supplementary Act. The necessary fora where negotiations and discussions can take place may be provided by the UN. More generally, recommendations put forward by initiatives that promote more inclusive approaches like the International Trade and Investment Law Working Group, established by the IEL Collective in 2020 (which aims to influence policy by providing expert evidence), should be considered by negotiators.

Dispute settlement

Another possibility of including non-state actors in international investment law is by enhancing their engagement when disputes under IIAs arise. In this context, dispute settlement usually takes the form of investment arbitration. To date, much investment arbitration has failed to adequately take account of the rights of non-state stakeholders. While there have been some cases where international tribunals allowed for the submission of amicus curiae briefs in order to hear non-economic interests (e.g. Methanex v. USA, Suez v. Argentina and Biwater Gauff v. Tanzania), these interventions should be used more often. To guarantee non-state participation, participation rights could be included in IIAs or more effectively promoted through instruments like the UNCITRAL Framework Convention on Investment and Sustainable Development.


To conclude, we have highlighted that there exists an inherent and continuing imbalance within international investment law, especially regarding environmental and human rights issues, which could be perceived as a new form of colonialism and compromise the goal of sustainable development. We argue that the enhanced participation of non-state actors could serve as a remedy to fight this inherent imbalance. This will help realise participatory democracy and better protect public interests. Given that non-state actors may also bring to light interests beyond those related to the environment or human rights, their participation will ensure that non-economic interests are considered in international investment law. This will strengthen the position of non-state stakeholders, assist with re-balancing the system and tackle neo-colonial tendencies.


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