Bilateral investment treaties are designed to protect foreign investments, but a key concern lies with the Investor-State Dispute Settlement (ISDS) mechanism. This system allows foreign investors to sue governments for measures that allegedly harm their investments, even if those measures are intended to protect public health, the environment, or human rights.
The research points out that international investment law, through ISDS, has been criticised for potentially undermining human rights policies and hindering the global transition away from fossil fuels. Both Australian companies and the renegotiating partner states - Argentina, Pakistan, and Türkiye - have been involved in investment arbitration cases challenging human rights and environmental regulations.
Silencing voices
While the renegotiated bilateral investment treaties with these nations may not directly threaten Australia's domestic decarbonisation or human rights policies, the broader impact of ISDS is significant. Critics argue that the mechanism often disregards the rights of local communities and silences their voices in crucial development and environmental decisions.
Authors Stephanie Triefus and Dmytro Cherneha advocate for Australia to adopt a holistic strategy in its investment cooperation. This means ensuring that human and environmental rights are protected, and crucially, that local communities are empowered and included in discussions from the outset.
Their submission outlines actionable policy options for Australia to address the challenges posed by ISDS and champion a just transition from fossil fuels globally. This research underscores a growing international recognition that economic agreements should align with broader societal goals, particularly in an era defined by climate change and an urgent need to uphold fundamental human rights.
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