Balancing The State’s Right To Regulate with Foreign Investment Protection: A Perspective Considering Investment Disputes in the South American Region
Some of the challenges in reforming the international investment framework have derived from investor-state disputes, where host states have been sued for environmental or health regulations. Clauses regarding investor-state dispute settlement mechanisms have been therefore improved in modern investment treaties. However, most developing countries, which tend to be most of the host countries to investments, still have Bilateral Investment Treaties from the 1990s where investor-state dispute settlement clauses remain unchanged. This paper analyses different strategies that host countries are taking in light of these challenges. These are particularly noteworthy in the South American region, where one can identify three different approaches concerning the international investment framework. Reflecting on these approaches, the paper addresses the relevance of the multilateral efforts to reform the framework as a way forward, and a more promising strategy, towards the aim of balancing the states and foreign investors’ interests.