Flexibility in International Investment Law: Legal Efficacy of Public Health Escape Clauses

Abstract

In article, I assess whether core terms in recent investment treaties can serve their designed objective by analysing the efficacy of public health exceptions or “escape clauses”. Do they preserve public health regulatory autonomy such that states will not get sued or be held liable? I argue that the provisos and conditions in most such clauses render them otiose and of little utility for public health regulatory autonomy. Their language on exceptions purports to preserve public health regulatory autonomy but remains, in spirit and letter, heavily oriented towards absolute investment protection, which is the original objective of the investment treaty regime. The prerequisites to these clauses limit their scope and erode their legal and operative effect. In turn, they seriously undermine the escape clauses’ underlying objectives. Consequently, the public health limitations of the investment treaty regime are immediate and ongoing, even for so-called “new generation” treaties. States are therefore justified to consider alternatives to the regime. If alternatives are not attainable, states should not agree to, or be expected to observe, standards of investment treaty protection that are incompatible with irrefutable public interest duties of states such as public health regulation.