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Expropriation clauses and environmental regulation: diffusion of law in the era of investment treaties

Lorenzo Cotula

Journal article

This article discusses diffusion of law in relation to investment treaty annexes on indirect expropriation. These annexes clarify the circumstances under which environmental regulation may constitute an expropriation requiring States to compensate investors.

The article briefly reviews theoretical perspectives in diffusion of law debates and links them to investment treaty making. It then explores three diffusion moments in the development and spread of expropriation annexes: the transition of indirect expropriation concepts and rules from the jurisprudence of the United States (US) Supreme Court to the indirect expropriation annex included in the US model investment treaties of 2004 and 2012; the inclusion of a comparable annex in the 2009 Comprehensive Investment Agreement of the Association of South-East Asian Nations; and the inclusion of an indirect expropriation annex in the Comprehensive Economic and Trade Agreement between Canada and the European Union.

The findings interrogate traditional concepts of diffusion of law and highlight the complexities of law formation in a globalized world. They also compound the case for comparative environmental lawyers to study the interface between national and international law and between environmental law and other branches of law that can affect options for environmental regulation.

Publication information

  • External: X00152
  • Published: Nov 2015 - RECIEL
  • Themes: Land acquisitions and rights, Law
  • Source pub: Review of European, Comparative & International Environmental Law
  • Journal ref: Volume 24, Issue 3, pp 278–288
  • Language: English

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Lorenzo Cotula (2015) Expropriation Clauses and Environmental Regulation: Diffusion of Law in the Era of Investment Treaties. Review of European, Comparative & International Environmental Law 24(3)278–288

Project information

International treaties, national laws and transnational contracts define the terms of an investment and the distribution of its costs and benefits. To promote inclusive sustainable development, IIED works with partners to rethink these legal documents and the process through which they are formulated.

More at www.iied.org:
Rethinking investment treaties, laws and contracts