Corporate Accountability to Local Communities for Investment-Related Harms: The Elusive Promise of Balanced Investment Treaties

Abstract

By establishing an investment project or undertaking abroad, a multinational corporation does not only create a relationship between itself and the host state, but also with its local communities, which are often adversely impacted by the conduct or business operations of the investor. Yet the international investment law system has been lopsided. It creates various substantive and procedural protections for investors that they may enforce against the host state in international arbitration. But generally neither the host state nor its local communities adversely impacted by the conduct or business operations of an investor have similar rights. This article examines balanced investment treaties, one of the measures states have recently begun to adopt to remedy the unequal investment law regime. It concludes that, while this new generation of treaties may level the playing field between investors and host states, they do not go far enough to effectively address the peculiar challenges of local communities that suffer investment-related harms.