Sustainable Development in EU (Trade and) Investment Agreements: An Overview of Recent Treaty Practice

Modern investment treaty-making has begun to combine investment liberalization and protection with international cooperation for the advancement of the UN Sustainable Development Goals: several international organizations and States have indeed promoted a reform of the IIAs system towards a more “sustainable” models of investment treaties. Most agreements therefore now contain references to sustainable development of various kinds, such as: perambulatory clauses; clauses of not lowering levels of protection of social and environmental policies; obligations for the progressive improvement of sustainable development policies. Specifically, in the European framework, since the conclusion of the Agreement with South Korea in 2009, such provisions are generally included in an ad hoc chapter of the agreement, often named «Trade and Sustainable Development» (TSD chapters), where the Parties specify their commitments in this matter and enter into mutual cooperation obligations. To date, TSD chapters have become a typical component of the new generation agreements of the European Union with both industrialized and developing countries: they also have the merit of being practically among the few examples of agreements which include provisions in the field of combating climate change. This study will focus on the substantive provisions and the preamble in EU agreements aimed at affirming the objective of sustainable development, in order to evaluate their ability to solve the problems of fragmentation and asymmetry of the investment law system that have given rise to the modernization processes of investment agreements. The answer seems negative, at least if we consider these clauses per se: in fact, the references to sustainable development have a programmatic content and, in some cases, they cannot even be invoked before the arbitral tribunals because they are subject to dispute resolution procedures having conciliatory type. This severely limits the possibility of implementing these provisions and, consequently, due to the type of clauses developed, the arbitrators could be influenced in a limited way. However, the EU is developing other provisions (i.e. right to regulate; corporate social responsibility clauses) that seem to ensure greater effectiveness and can better contribute to achieving the goal of sustainable development.