by Meredith Wilensky. Wilensky was the 2013-2014 associate director and fellow at Columbia Law School's Sabin Center for Climate Change Law. She currently clerks for Judge Claudia Wilken of the Northern District of California.
The Trans-Pacific Partnership Trade and Globalization Agreement (TPP) is currently being negotiated by 12 Pacific Rim countries: Australia, Brunei, Canada, Chile, Japan, Malaysia, Mexico, New Zealand, Peru, Singapore, the United States and Vietnam. The Obama Administration maintains that it will promote strong environmental protection in the TPP and “insist on a robust, fully enforceable environment chapter.” To that effect, the United States is advocating that the agreement include commitments to effectively enforce domestic environmental laws and provisions to address wildlife trafficking, illegal logging and illegal fishing practices.
A strong environment chapter is an admirable goal, but it does not discount the potential threats to the environment posed by other chapters of the agreement, especially the investment chapter. Modern international investment agreements (IIAs) impose standards of conduct on host countries in their dealings with foreign investors. For example, expropriation provisions require governments to compensate for all takings and “Fair and Equitable Treatment” obligations set a minimum standard of treatment for all foreign investors. While these provisions are intended to ensure fair and ethical dealings with foreign investors, they can have sweeping repercussions for host states’ environmental policy.
Investor protection provisions are particularly powerful because they are usually accompanied by an investor-state dispute settlement (ISDS) mechanism, which permits aggrieved investors to initiate arbitration in ad hoc international tribunals for compensation of losses that the tribunals find have arisen from the host country’s violation of the investor protection provisions. Under preexisting IIAs, investor protection provisions have been interpreted broadly to require compensation for a number of actions taken by governments to protect the environment and public health.